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Court of Appeals of Texas, Houston (1st Dist.).

IN RE VC PALMSWESTHEIMER, LLC AND PARAWEST COMMUNITY DEVELOPMENT, LLC, Relators

NO. 01-20-00465-CV

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Opinion issued December 10, 2020

Original Proceeding on Petition for Writ of Mandamus

Panel consists of Justices Keyes, Hightower, and Countiss.

OPINION

Julie Countiss Justice

*1 Relators, VC PalmsWestheimer, LLC (“Palms”) and Parawest Community Development, LLC (“Parawest”), have filed a petition for writ of mandamus, seeking to compel respondent, the Honorable Daryl Moore, to vacate an order denying their motion for leave to designate a responsible third party and to compel him to enter an order granting the motion.1

We conditionally grant the petition.

Background

On March 6, 2019, real party in interest, Seyedali Parsafar, filed his original petition, alleging that he was assaulted on the grounds of his apartment complex, The Palms on Westheimer, on March 21, 2017. Although Parsafar did not know the perpetrator of the assault, the security guard at his apartment complex knew the perpetrator’s identity and showed Parsafar a photograph of the perpetrator immediately after the assault. Parsafar called law enforcement officers and reported the assault.

Parsafar, acting pro se, sued Palms, the owner of The Palms on Westheimer apartment complex, Parawest, the management company for the apartment complex, and State Alliance Protective Services, LLC, the security contractor for the apartment complex.2 Parsafar brought claims for negligence, gross negligence, premises liability, and violations of the Deceptive Trade Practices Act (“DTPA”).3 Parsafar did not serve any discovery requests on Palms and Parawest with his original petition.

On April 15, 2019, Palms and Parawest filed separate original answers, generally denying the allegations in Parsafar’s original petition. Included in each original answer was a request for disclosures.4

Parsafar then moved to stay the trial court’s proceedings because of an unspecified medical reason. On June 17, 2019, the trial court granted the requested stay and abated the case until August 2, 2019. On June 20, 2019, the trial court issued a docket control order that included a joinder deadline of August 5, 2019 and a trial date of April 27, 2020. Meanwhile, Parsafar retained counsel.

On August 27, 2019, Palms and Parawest each filed a first amended answer that designated Jaeylen Deshawn Turner or “an unknown individual” as a responsible third party. That same day, Palms and Parawest filed a joint motion for leave to designate Turner or John Doe as a responsible third party. The motion for leave stated in pertinent part:

Upon information and belief, ... Turner was the individual who allegedly assaulted [Parsafar]. To the extent that it is shown that ... Turner was not involved in the incident in question, the individual who committed the crime in question is unknown.... Turner or an unknown criminal, John Doe ..., is responsible for the criminal acts because he allegedly assaulted [Parsafar] causing bodily injury.

*2 In his response to the motion for leave, Parsafar objected and asserted that Palms and Parawest’s request for leave to designate Turner or John Doe as a responsible third party was untimely and it failed to conform with the requirements of Texas Civil Practice and Remedies Code section 33.004.5 Parsafar argued that Turner had not been timely designated as a responsible third party because he was not designated before the statute of limitations period ran or by the joinder deadline in the trial court’s docket control order. And Parsafar argued that John Doe had not been timely designated as a responsible third party because he was not designated within sixty days of the date Palms and Parawest filed their original answers. Parsafar also asserted that the factual allegations in the motion for leave about John Doe were insufficient.

In their reply to Parsafar’s response, Palms and Parawest asserted that the designation of Turner as a responsible third party could not have been made before the statute of limitations period ran because suit was not filed until approximately two weeks before the limitations period expired. Palms and Parawest further asserted that the sixty-day deadline for designating an unknown responsible third party should have been tolled while the case was abated at Parsafar’s request. According to Palms and Parawest, their motion for leave sufficiently explained the factual basis for designating John Doe as a responsible third party. Finally, Palms and Parawest stated that they would agree to extend the joinder deadline in the docket control order to the extent that their motion for leave violated it.6

On October 9, 2019, the trial court denied Palms and Parawest’s motion for leave to designate Turner or John Doe as a responsible third party.7

Palms and Parawest filed a motion for reconsideration of the trial court’s denial of their motion for leave,8 which was heard by the trial court on December 16, 2019. During the hearing on the motion for reconsideration, the trial court implied that its previous ruling was based on Palms and Parawest’s failure to identify a responsible third party in their answers. Specifically, during the hearing, the trial court asked Palms and Parawest why did they not “say in [their] answer that the injuries of which [Parsafar] complain[ed] [were] caused in whole or in part by third party, if [they] knew about [him]?” The trial court continued:

If you knew about the existence of [a responsible third party], and you knew that time is short, without getting into your work product, the safest thing to do is to designate them and then nonsuit them. Rather than wait – you waited until June – April, May, June, so you had 60 days, and then it’s abated for 45 days and then you file your [responsible-third-party] request when?

On April 1, 2020, the trial court denied the motion for reconsideration.

On June 23, 2020, Palms and Parawest filed a petition for writ of mandamus, seeking relief from this Court with regard to the trial court’s October 9, 2020 order denying their motion for leave to designate Turner as a responsible third party.9

Standard of Review

*3 Relators who seek mandamus relief “must establish that an underlying order is void or a clear abuse of discretion and that no adequate appellate remedy exists.” In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding); In re Prudential Ins. Co., 148 S.W.3d 124, 135 (Tex. 2004) (orig. proceeding); see also In re Coppola, 535 S.W.3d 506, 508 (Tex. 2017) (orig. proceeding). The trial court abuses its discretion if its ruling is “arbitrary and unreasonable, made without regard for guiding legal principles or supporting evidence.” In re Nationwide Ins., 494 S.W.3d at 712. A trial court also abuses its discretion if it “fails to analyze or apply the law correctly.” Id. This Court must “defer to the trial court’s factual determinations while reviewing its legal conclusions de novo.” In re Makris, 217 S.W.3d 521, 523 (Tex. App.—San Antonio 2006, orig. proceeding). The trial court’s “clear failure to analyze or apply the law correctly is an abuse of discretion.” In re CVR Energy, Inc., 500 S.W.3d 67, 72–73 (Tex. App.—Houston [1st Dist.] 2016, orig. proceeding).

Responsible Third Party

In their first and second issues, Palms and Parawest argue that the trial court abused its discretion in denying their motion for leave to designate Turner as a responsible third party because they had no obligation under the Texas Rules of Civil Procedure to identify Turner as a responsible third party before the statute of limitations ran, they were not obligated to identify Turner as a responsible third party given that Parsafar did not serve a request for disclosures on them, their motion for leave to designate Turner as a responsible third party was not untimely based on the joinder deadline in the trial court’s docket control order, and the motion for leave was not untimely even though it was filed some four months after they filed their original answers.

In response, Parsafar argues that the trial court properly denied the motion for leave to designate Turner as a responsible third party because, given that it was filed after the statute of limitations period ran, Palms and Parawest did not comply with their obligations to disclose Turner as a responsible third party. Parsafar also asserts that the motion for leave violated the docket control order issued by the trial court.

A. Responsible-Third-Party Statute

Texas Civil Practice and Remedies Code chapter 33 governs the designation of a responsible third party. “Responsible third party” is defined as

any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity that violates an applicable legal standard, or by any combination of these.

TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6). A motion for leave to designate a known person as a responsible third party “must be filed on or before the 60th day before the trial date unless the court finds good cause to allow the motion to be filed at a later date.” Id. § 33.004(a). That person may not be designated as a responsible third party

after the applicable [statute of] limitations period on the cause of action has expired with respect to the responsible third party if the defendant has failed to comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.

Id. § 33.004(d).10 Thus, under chapter 33, an identifiable responsible third party generally must be identified at least sixty days before trial and before the statute of limitations period runs on that person. And if a motion for leave to designate the known individual as a responsible third party is filed after the statute of limitations period ran for that person, the movant must have complied with any previously existing obligations to identify that person.

*4 Chapter 33 requires the trial court to grant leave to designate the known individual as a responsible third party unless another party files an objection to the motion for leave within fifteen days of service of the motion. Id. § 33.004(f). But a timely objection only prevents the court from granting leave if the objecting party establishes that the defendants “did not plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirements of the Texas Rules of Civil Procedure” after having been granted leave to replead.11 Id. § 33.004(g). The designation of a responsible third party is automatic when the trial court grants a motion for leave to designate. Id. § 33.004(h).

B. First Amended Answers and Motion for Leave to Designate Responsible Third Party

Palms and Parawest separately filed original answers on April 15, 2019. These answers did not refer to the assault or any alleged perpetrators. Palms and Parawest each filed first amended answers on August 27, 2020, which stated in pertinent part:

[Palms/Parawest] designates ... Turner or an unknown person as a responsible third party within the meaning of Texas Civil Practice & Remedies Code section 33.004(j). Upon information and belief, ... Turner is the individual who committed the assault in question. Should it be proved that ... Turner did not commit the assault in question, the [perpetrator], John Doe ..., is unknown.... Turner or John Doe ... committed the acts that caused the loss or injury that is the subject of this lawsuit. Pursuant to Texas Penal Code chapter 22, the alleged acts committed by ... Turner or John Doe ... are criminal.

Palms and Parawest’s motion for leave to designate Turner as a responsible third party, also filed on August 27, 2020, stated:

According to Plaintiff’s Original Petition, on March 21, 2017, an individual assaulted him at [T]he Palms on Westheimer apartment complex located at 6425 Westheimer Road, Houston, Texas 77057 .... Upon information and belief, ... Turner was the individual who allegedly assaulted [Parsafar]. To the extent that it is shown that ... Turner was not involved in the incident in question, the individual who committed the crime in question is unknown.... Turner or an unknown criminal, John Doe ..., is responsible for the criminal acts because he allegedly assaulted [Parsafar] causing bodily injury.

The first amended answers and the motion for leave were filed 134 days after Palms and Parawest filed their original answers.

C. Response to Motion for Leave to Designate Responsible Third Party

In his response to Palms and Parawest’s motion for leave to designate Turner as a responsible third party, Parsafar objected to the designation of Turner because (1) the designation was not timely as it was not done within the statute of limitations period, (2) the designation violated the joinder deadline established in the trial court’s docket control order, and (3) the designation’s factual allegations about John Doe were insufficient.

1. Designation and Disclosure Within Time Periods Contemplated by Chapter 33

Given that the alleged assault of Parsafar occurred on March 21, 2017, the statute limitations period ran in this case on March 21, 2019.12 Parsafar filed suit against Palms and Parawest on March 6, 2019. Citations for Palms and Parawest were issued on March 13, 2019, and they were filed with the trial court clerk on April 1, 2019. The affidavits of service state that Parsafar’s petition was delivered to Palms on March 19, 2019 and to Parawest on March 20, 2019. Based on these events, it would have been nearly impossible for Palms and Parawest to answer, much less file a motion for leave to designate Turner as a responsible third party, before the statute of limitations period ran on March 21, 2019. Palms and Parawest timely filed their original answers on April 15, 2019.

*5 The filing of a petition near or after the expiration of the statute of limitations does not prevent a defendant from moving for leave to designate a responsible third party. See, e.g., In re Bustamante, 510 S.W.3d 732 (Tex. App.—San Antonio 2016, orig. proceeding). In In re Bustamante, which stemmed from a car accident that pinned one of the plaintiffs against the building where he worked, the plaintiffs filed suit against the owner of the building one day before the statute of limitations period ran. 510 S.W.3d at 734. A request for disclosures was included with the petition. Id. at 736. The defendant did not respond to the request for disclosures but, some three years after filing a timely answer, he moved for leave to designate two responsible third parties. Id. The two responsible third parties were the driver of the car that struck the one plaintiff, with whom the plaintiffs had settled, and the one plaintiff’s employer, from whom he had received workers’ compensation benefits. Id. at 734.

The trial court denied the defendant’s motion for leave to designate two responsible third parties, which the plaintiffs argued was untimely because it was filed after the statute of limitations period ran and the defendant had not timely disclosed the potential responsible third parties. Id. at 734–35. The defendant asserted that he could not have timely disclosed the two potential responsible third parties before the statute of limitations period ran and, therefore, he had no duty to timely disclose them. Id. at 735.

The San Antonio Court of Appeals explained that the plaintiffs were

taking the position that a defendant loses the statutory right to designate responsible third parties if the defendant fails to respond to a request for disclosure[s] of potential responsible third parties within the deadline contained in [Texas] Rule [of Civil Procedure] 194.3. This [was] inconsistent with Texas Rule of Civil Procedure 193.6(a), which allow[ed] a party who fail[ed] to respond to discovery [requests] to introduce the undisclosed material or information into evidence if the party show[ed] either (1) good cause existed for the failure to respond to the discovery [requests] or (2) the other party [would] not be unfairly surprised or unfairly prejudiced by the failure to timely respond.

Id. at 736. The court continued:

To hold as the [plaintiffs] suggest would convert [Texas] Rule [of Civil Procedure] 194.2(l) into a technical trap. A party who fail[ed] to timely respond to a request for disclosure[s] of information regarding a person who may be designated as a responsible third party would lose the statutory right to designate responsible third parties, while a party that fail[ed] to respond to a request for disclosure[s] of the information required by rules 194.2 (a)–(k) would not face such a penalty. We do not read [Texas Civil Practice and Remedies Code] [s]ection 33.004(d) so narrowly. Instead, we read section 33.004(d) to require a defendant to disclose a potential responsible third party before the expiration of the statute of limitations, if that is possible.

Id. at 736–37 (emphasis added). The court further stated that even if the trial court indulged in the “legal fiction” that the plaintiffs did not know of the existence of the two potential responsible third parties, the defendant’s disclosure obligations were satisfied by his testimony in a deposition and by his responses to a co-defendant’s discovery request. Id.

Here, it is undisputed that Palms and Parawest were unable to file a motion for leave to designate Turner as a responsible third party before the statute of limitations period ran. It is also undisputed that Parsafar did not serve his request for disclosures or any other discovery requests on Palms and Parawest with his original petition and discovery had not yet begun when the motion for leave was filed. Even so, the trial court concluded that Palms and Parawest breached their duty to disclose Turner as a responsible third party by failing to identify him in their original answers, which only generally denied the allegations in Parsafar’s original petition.

*6 At the hearing on Palms and Parawest’s motion for reconsideration of the trial court’s denial of the motion for leave, the trial court indicated that its ruling was based on Texas Civil Practice and Remedies Code section 33.004, which requires a defendant to “comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.” (Emphasis added.) During the hearing, the trial court asked Palms and Parawest why did they not “say in [their] answer that the injuries of which [Parsafar] complain[ed] [were] caused in whole or in part by third party, if [they] knew about [him]?” The trial court continued:

If you knew about the existence of [a responsible third party], and you knew that time is short, without getting into your work product, the safest thing to do is to designate them and then nonsuit them. Rather than wait – you waited until June – April, May, June, so you had 60 days, and then it’s abated for 45 days and then you file your [responsible-third-person] request when?

Palms and Parawest responded that the Texas Rules of Civil Procedure do not require such disclosure when a defendant files its answer and Parsafar was not prejudiced in any event by the later designation.13 We agree, finding support in a recent Texas Supreme Court decision. See In re Mobile Mini, Inc., 596 S.W.3d 781, 784 (Tex. 2020) (orig. proceeding) (holding discovery responses that disclosed responsible third party provided timely notice of potential responsible third party even though responses were served after statute of limitations period ran; rejecting argument “as contrary to the statute’s plain language” that disclosure of responsible third party should have been made before discovery responses were due); see also In re Bustamante, 510 S.W.3d at 736–37.

In In re Mobile Mini, the plaintiff’s finger was injured at a construction site when a wind gust caused a trailer door to close on his hand. 596 S.W.3d at 783. Mobile Mini, Inc. (“Mobile Mini”) owned the trailer and leased it to Nolana Self Storage, LLC (“Nolana”), which owned the construction site. Id. The trailer was under the exclusive control of Nolana’s contractor, Anar Construction Specialists, LLC (“Anar”), when the plaintiff’s injury occurred. Id. The plaintiff sued Anar and Mobile Mini nineteen days before the statute of limitations period ran, serving his request for disclosures with his original petition. Id. He did not sue Nolana. Id. Mobile Mini timely answered and served its discovery responses, which were due after the statute of limitations period ran, on the plaintiff. Id. The discovery responses identified Nolana as a potential responsible third party. Id. The plaintiff amended his petition to add Nolana as a defendant within a week of receiving the discovery responses. Id. The next day, Mobile Mini filed a motion for leave to designate Nolana as a responsible third party. Id. No party filed an objection to the motion for leave to designate Nolana as a responsible third party, which was not ruled on by the trial court for nearly two years. Id.

*7 Meanwhile, the trial court found that the plaintiff’s tort claims against Nolana were time-barred and granted summary judgment in favor of Nolana on the those claims. Id. Subsequently, the plaintiff and Nolana filed written objections to Mobile Mini’s motion for leave to designate a responsible third party, asserting that Mobile Mini’s designation was improper “because Nolana could not be a responsible party once the limitations period had expired.” Id. After the trial court granted Nolana summary judgment on all claims against it, the trial court denied Mobile Mini’s request to designate Nolana as a responsible third party. Id.

Mobile Mini then filed a petition for writ of mandamus in the court of appeals, seeking to compel the trial court to grant its timely motion for leave to designate a responsible third party. The court of appeals denied Mobile Mini’s request for mandamus relief but the Texas Supreme Court held that the trial court abused its discretion in denying the motion for leave and Mobile Mini had no adequate remedy by appeal. Id. at 783. In doing so, the court explained: “The crux of the dispute here is whether Mobile Mini’s discovery response[s] disclosing Nolana as a potential[ ] responsible third party [were] ‘timely’ even though [they were] served after the statute of limitations ha[d] expired on [the plaintiff’s] tort claims.” Id. at 784. According to the supreme court, “Mobile Mini’s disclosure [of a potential responsible third party] was timely because under the Texas Rules of Civil Procedure, it was not obligated to disclose [a] potential[ ] responsible third part[y] until its discovery responses were due.Id. (emphasis added). The court stated that “placing the onus on a defendant to respond before the Rules of Civil Procedure obligate it to do so not only contravenes [Texas Civil Practice and Remedies Code] section 33.004(d)’s express language but would also be unfairly prejudicial to defendants.” Id. at 786. The supreme court’s analysis of the language in section 33.004(d) in In re Mobile Mini is controlling here.

We note that Parsafar, in his response to Palms and Parawest’s petition for writ of mandamus, relies on In re Melissa Dawson, 550 S.W.3d 625 (Tex. 2018). In In re Melissa Dawson, the Texas Supreme Court held that the trial court abused its discretion in allowing a defendant to designate a responsible third party that was not adequately identified in the defendant’s discovery responses. 550 S.W.3d at 629. But, in doing so, the supreme court disagreed that the defendant had put the plaintiff on notice that it might designate a responsible third party. Id. In re Melissa Dawson is inapposite here because the plaintiff in In re Melissa Dawson served her discovery requests on the defendant with her original petition and because In re Melissa Dawson does not address whether the identification of a responsible third party should or could be made in a defendant’s original, or amended, answer.

2. Relevance of Joinder Deadline

In his response to Palms and Parawest’s motion for leave to designate Turner as a responsible third party, Parsafar argued that Palms and Parawest’s motion was procedurally deficient because it was filed three weeks after the joinder deadline identified in the trial court’s docket control order. Palms and Parawest offered to agree to extend the joinder deadline, but Parsafar declined. None of the parties cited any authority in the trial court or in this Court that declares that a violation of a docket control order’s joinder deadline is a violation of the Texas Rules of Civil Procedure that prevents a defendant from filing a motion for leave to designate a responsible third party.

*8 Palms and Parawest assert in their petition for writ of mandamus that Texas Civil Practice and Remedies Code chapter 33 does not require a motion for leave to designate a responsible third party to be filed before a court-imposed joinder deadline. They cite two cases for the proposition that a trial court’s docket control order cannot accelerate a statutory deadline. See Spectrum Healthcare Res., Inc. v. McDaniel, 306 S.W.3d 249, 254 (Tex. 2010) (agreed docket control order generally ineffective to extend statutory deadline for expert reports); In re United Parcel Serv., Inc., No. 09-18-00002-CV, 2018 WL 753503, at *4 (Tex. App.—Beaumont Feb. 8, 2018, orig. proceeding) (trial court abused its discretion by issuing docket control order “requiring UPS and its driver to designate responsible third parties approximately six months before the initially scheduled trial, a period approximately three times the statutorily proscribed sixty-day period”). Parsafar does not provide opposing authority or address this argument in his mandamus response. Still yet, during the hearing on Palms and Parawest’s motion for reconsideration of the trial court’s ruling on their motion for leave, the trial court stated: “I don’t want to talk about joinder. That’s a red herring from both sides. You don’t need to address it.” Thus, Parsafar’s joinder-deadline argument was not the basis for the trial court’s decision to deny the motion for leave to designate Turner as a responsible third party.

3. Sufficiency of Factual Allegations in Motion for Leave

In addition to the temporal requirements for designating a responsible third party, pleading requirements can thwart a motion for leave. As set forth above, Palms’s and Parawest’s first amended answers both stated in pertinent part:

[Palms/Parawest] designates ... Turner or an unknown person as a responsible third party within the meaning of Texas Civil Practice & Remedies Code section 33.004(j). Upon information and belief, ... Turner is the individual who committed the assault in question. Should it be proved that ... Turner did not commit the assault in question, the [perpetrator], John Doe ..., is unknown.... Turner or John Doe ... committed the acts that caused the loss or injury that is the subject of this lawsuit. Pursuant to Texas Penal Code chapter 22, the alleged acts committed by ... Turner or John Doe ... are criminal.

Palms and Parawest’s motion for leave to designate a Turner as a responsible third party stated:

According to Plaintiff’s Original Petition, on March 21, 2017, an individual assaulted him at [T]he Palms on Westheimer apartment complex located at 6425 Westheimer Road, Houston, Texas 77057 .... Upon information and belief, ... Turner was the individual who allegedly assaulted [Parsafar]. To the extent that it is shown that ... Turner was not involved in the incident in question, the individual who committed the crime in question is unknown.... Turner or an unknown criminal, John Doe ..., is responsible for the criminal acts because he allegedly assaulted [Parsafar] causing bodily injury.

Parsafar asserted in the trial court that the first amended answers and the motion for leave that identified John Doe were not sufficient to satisfy the pleading requirements in the Texas Rules of Civil Procedure. But Parsafar did not urge this argument as to Turner.

Under Texas Civil Practice and Remedies Code section 33.004(g), an objection to a motion for leave to designate a responsible third party can only be effective if it is (1) timely filed and (2) the objection establishes that the defendant “did not plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirement of the Texas Rules of Civil Procedure.” TEX. CIV. PRAC. & REM. CODE ANN. § 33.004(g)(1). Parsafar’s objection was timely filed, but he did not argue that the motion for leave was insufficient as to Turner. Further, there is no indication in the record that the trial court found the motion for leave to designate Turner as a responsible third party insufficient to satisfy the Texas Rules of Civil Procedure’s pleading requirement. And Parsafar does not attempt to make that argument in response to Palms and Parawest’s petition for writ of mandamus.

We hold that the trial court abused his discretion in denying Palms and Parawest’s motion for leave to designate Turner as a responsible third party.

Adequate Remedy by Appeal

*9 The Texas Supreme Court has held that there is no adequate remedy by appeal for a trial court’s improper refusal to allow the designation of a responsible third party. “Allowing a case to proceed to trial despite [the] erroneous denial of a responsible-third-party designation ‘would skew the proceedings, potentially affect the outcome of the litigation, and compromise the presentation of [the relators’] defense in ways unlikely to be apparent in the appellate record.’ ” In re Coppola, 535 S.W.3d at 509 (quoting In re CVR Energy, 500 S.W.3d at 81–82).14 In re Coppola was the first time that the Texas Supreme Court addressed the adequacy of an appellate remedy in the context of a responsible-third-party designation, holding that, “ordinarily, ... relator[s] need only establish a trial court’s abuse of discretion to demonstrate entitlement to mandamus relief with regard to a trial court’s denial of a timely-filed section 33.004(a) motion” for leave to designate a responsible third party. Id. at 509–10.

We hold that Palms and Parawest have no adequate remedy by appeal.

We sustain Palms and Parawest’s first and second issues.

Conclusion

We conditionally grant Palms and Parawest’s petition for writ of mandamus and direct respondent to vacate the order denying Palms and Parawest’s motion for leave to designate Turner as a responsible third party. A writ of mandamus from this Court will issue only if respondent does not comply.

Footnotes

1

The underlying case is Seyedali Parsafar v. VC PalmsWestheimer, LLC, Parawest Community Development, LLC, and State Alliance Protective Services, LLC, Cause No. 2019-16627, pending in the 333rd District Court of Harris County, Texas, the Honorable Daryl Moore presiding.

2

State Alliance Protective Services, LLC is not a party to this mandamus proceeding.

3

See TEX. BUS. & COM. CODE ANN. §§ 17.41–.63.

4

See TEX. R. CIV. P. 194.

5

See TEX. CIV. PRAC. & REM. CODE ANN. § 33.004.

6

Parsafar filed a sur-reply to Palms and Parawest’s reply. Parsafar attached his declaration to his sur-reply.

7

The mandamus record does not contain any notice of a hearing on Palms and Parawest’s motion for leave or a transcript from a hearing. But the transcript from a hearing on Palms and Parawest’s motion for reconsideration of the trial court’s denial of their motion for leave indicates that a prior hearing was held on the motion for leave.

8

Parsafar filed a response to the motion for reconsideration.

9

Palms and Parawest do not seek relief related to the trial court’s denial of their motion for leave to designate John Doe as a responsible third party.

10

As a matter of statutory interpretation, Texas Civil Practice and Remedies Code section 33.004(d)’s statement that the defendant must “comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure” makes sense only when the disclosure refers to a response to a discovery request. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.004(d) (emphasis added). If the statement required disclosure of a potential responsible third party in an answer, the “if any” verbiage would be surplusage, because all defendants have an obligation to file an answer. But the obligation to respond to a discovery request only arises under the Texas Rules of Civil Procedure when a discovery request is served on a defendant. A court must “give effect to all the words of a statute and not treat any statutory language as surplusage if possible.” Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex. 1987). Thus, the Texas Supreme Court has said that the obligation to identify a responsible third party arises when “discovery responses [are] due.” In re Mobile Mini, Inc., 596 S.W.3d 781, 784 (Tex. 2020) (orig. proceeding).

11

“Fair notice” under the notice-pleading standard “is achieved if the opposing party can ascertain from the pleading the nature and basic issues of the controversy, and what type of evidence might be relevant. A trial court may not review the truth of the allegations or consider the strength of the defendant’s evidence.” In re CVR Energy, Inc., 500 S.W.3d 67, 80 (Tex. App.—Houston [1st Dist.] 2016, orig. proceeding) (internal quotations and citations omitted).

12

See, e.g., TEX. BUS. & COM. CODE ANN. § 17.565 (two-year statute of limitations period for DTPA claim); TEX. CIV. PRAC. & REM. CODE ANN. § 16.003 (two-year statute of limitations period for negligence claim).

13

Parsafar asserted at the hearing that allowing the designation of Turner as a responsible third party would cause prejudice because “[he] could have, maybe, done something different on [his] end internally, work product wise, strategy wise.” But Palms and Parawest confirmed that discovery had not yet commenced at the time they filed the motion for leave. Further, Parsafar never asserted in the trial court that Turner was not the perpetrator of the assault. Parsafar stated in his declaration attached to his sur-reply filed in the trial court that Palms and Parawest “ha[d] been aware of the alleged [perpetrator] they [were] ... attempting to untimely disclose since the [assault] occurred.... [Palms and Parawest and their counsel] were well-informed regarding ... Turner and his identity.”

14

This Court has previously held that a relator had an adequate remedy by appeal with respect to a trial court’s denial of a motion for leave to designate a responsible third party. See In re Unitec Elevator Servs. Co., 178 S.W.3d 53, 66 (Tex. App.—Houston [1st Dist.] 2005, orig. proceeding). The Texas Supreme Court’s decision in In re Coppola, 535 S.W.3d 506 (Tex. 2017) did not address In re Unitec Elevator Services, but in In re CVR Energy, a “complicated wrongful death case ... with multiple plaintiffs, multiple defendant parent and subsidiary companies, and multiple allegations of tortious conduct by the various companies,” this Court distinguished In re Unitec Elevator Services, a “relatively straightforward personal injury case.” In re CVR Energy, 500 S.W.3d at 82–83.

VICENTE A. MENCHACA, Appellant

v.

INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Appellee

NO. 01-18-01122-CV

|

November 3, 2020

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Case No. C-2017-04354

Panel consists of Chief Justice Radack and Justices Goodman and Hightower.

MEMORANDUM OPINION

Sherry Radack Chief Justice

*1 Opinion issued November 3, 2020

Appellant, Vicente A. Menchaca, was injured on the job in 1994. Although he received workers’ compensation benefits for the portion of his injuries related to his wrists, the Texas Department of Insurance Division of Workers’ Compensation determined that the compensable portion of his injuries did not extend to and include injuries to his neck. After exhausting his administrative remedies, Menchaca, proceeding pro se, brought the underlying lawsuit against his employer’s workers’ compensation carrier, the Insurance Company of the State of Pennsylvania (“ICSP”), seeking judicial review of the Texas Department of Insurance Division of Workers’ Compensation decision. The trial court granted summary judgment in favor of ICSP.

In five issues, Menchaca argues that the trial court: (1) lacked jurisdiction to determine whether the compensable injury included injuries to his neck; (2) erred in granting ICSP’s traditional and no-evidence motion for summary judgment; (3) erred in failing to issue findings of fact and conclusions of law; (4) erred in excluding his motion for sanctions; and (5) erred in refusing to consider Menchaca’s additional issues related to his neck injuries, depression, and request for lifetime income benefits.

We affirm.

Background

Menchaca was employed as a machinist for Baker Hughes, Inc. when he suffered a work-related injury on January 18, 1994. At the time of the injury, ICSP was the workers’ compensation carrier for Baker Hughes. On December 22, 1995, the Texas Workers’ Compensation Commission (the “Commission”) determined that Menchaca sustained a compensable injury and ordered ICSP to pay benefits in accordance with that decision.

In 2016, Menchaca sought benefits for injuries related to a cervical injury, contending that the 1994 compensable injury included C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy. ICSP disputed that the compensable injury extended to or included C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy.

A benefit review officer with the Division of Workers’ Compensation held a benefit review conference with the parties on May 16, 2016 to mediate resolution of the disputed issue. Because the parties were unable to reach an agreement, a contested case hearing was held on September 13, 2016 to decide the following disputed issue: “Does the compensable injury of January 18, 1994 extend to and include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy?”

After the hearing, the Hearing Officer determined that Menchaca had the burden to establish the compensability of the disputed cervicothoracic conditions and diagnoses by a preponderance of the evidence. The Hearing Officer determined that the disputed cervicothoracic conditions and diagnoses were so complex that a factfinder lacked the ability based on common knowledge to find a causal connection and thus expert medical evidence was necessary to establish a causal connection to the compensable injury. The Hearing Officer concluded that although Menchaca relied on his medical records, these medical records were insufficient to show how C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy were either caused or aggravated by Menchaca’s activities at work or the compensable injury. Thus, the Hearing Officer found that Menchaca failed to establish the compensability of C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy, found that the compensable injury did not extend to or include these conditions, and found that Menchaca was therefore not entitled to benefits for these conditions. On December 12, 2016, Texas Workers’ Compensation Commission Appeals Panel (“Appeals Panel”) upheld the decision.

*2 On January 23, 2017, Menchaca filed the underlying Request for Judicial Review of the administrative decision. Menchaca later filed an amended petition setting forth the specific determinations by which he claimed he was aggrieved, including:

1. [ICSP’s] argument there is no waiver;

2. Hearing Officer’s conclusion that “[t]he disputed issue required expert medical evidence to establish causation”;

3. Hearing Officer’s finding of fact #1(D) that ICSP has accepted a compensable injury on this claim to include bilateral hand/wrist tendinitis and depression;

4. Hearing Officer’s finding of fact #3 that Menchaca’s C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy were neither caused nor accelerated, enhanced or worsened by Menchaca’s activities at work or the compensable injury of January 18, 1994; and

5. Hearing Officer’s conclusion of law #3 that the compensable injury of January 1, 1994 does not extend to or include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy.

Menchaca also sought lifetime income benefits.

ICSP filed a no-evidence and traditional motion for summary judgment alleging that there was no evidence that: the compensable injury extended to or included Menchaca’s cervical conditions; Menchaca’s cervical conditions were caused by his compensable injuries; Menchaca was entitled to lifetime income benefits; and Menchaca exhausted his administrative remedies on the issues of waiver and lifetime income benefits. And, ICSP argued that it was entitled to judgment because it established as a matter of law that there was no genuine issue of material fact that the injury did not extend to or include the cervical conditions. Menchaca responded, attaching various medical records as summary-judgment evidence. The trial court granted summary judgment in favor of ICSP and subsequently entered a final judgment on September 21, 2018.

Jurisdiction

In his first issue, Menchaca argues that “ICSP[’s] right to contest the ... compensability of injury should be dismissed because the trial court did not have jurisdiction” because the Commission had previously adjudicated the matter in 1995. Specifically, Menchaca asserts that, in its 1995 decision, the Commission found that his “bilateral hand wrist tendinitis/coupled with cervical outlet syndrome” injury “was the principal and sole compensable injury” and that ICSP had “waived its right to contest extent of injury.”

To the extent that Menchaca’s first issue can be read as one challenging the trial court’s subject matter jurisdiction to hear this case, we conclude that the trial court had jurisdiction. Though phrased as if it was ICSP who was challenging the administrative ruling, it was Menchaca himself who invoked the trial court’s jurisdiction by filing his petition for judicial review of the Commission’s decision. See 410.251 TEX. LAB. CODE § 410.251 (“A party that has exhausted its administrative remedies under this subtitle and that is aggrieved by a final decision of the appeals panel may seek judicial review ....”).

We also reject Menchaca’s argument that the trial court lacked jurisdiction to allow ICSP to contest the compensability of Menchaca’s injury because that issue had been previously adjudicated by the Commission in 1995. Menchaca is correct that the issue of compensability was previously adjudicated by the Commission; however, as demonstrated below, the issue of the extent of the compensable injury, not whether there was a compensable injury at all, was what was before the Commission in 2016.

*3 In the 1995 decision, the Hearing Officer considered whether ICSP “contest[ed] compensability on or before the 60[th] day after being notified of the injury” and whether Menchaca “sustain[ed] a compensable injury on January 18, 1994.” Without including specific findings of fact or conclusions of law, the Hearing Officer determined that ICSP “did not contest compensability on or before the 60[th] day after January 18, 1994” and that Menchaca “sustained a compensable injury on January 18, 1994.”1 The Hearing Officer did not include any findings or conclusions related to the extent of the compensable injury.

Here, ICSP does not dispute that Menchaca suffered a compensable injury in 1994. In fact, in the Commission’s decision in 2016, the Hearing Officer noted that the “parties stipulated that [Menchaca] sustained a compensable injury on January 18, 1994.” ICSP did, however, dispute that this compensable injury extended to include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy and, therefore, the sole issue before the Commission in 2016 was whether “the compensable injury of January 18, 1994 extend[ed] to and include[d] C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy.”

In State Office of Risk Management v. Lawton, the Texas Supreme Court clarified the difference between a dispute regarding a compensable injury and a dispute regarding the extent of an injury:

When a carrier disputes the extent of an injury, it is not denying the compensability of the claim as a whole, it is disputing an aspect of the claim.... [A] dispute involving extent of injury is a dispute over the amount or type of benefits, specifically, medical benefits, to which the employee is entitled (i.e. what body areas/systems, injuries, conditions, or symptoms for which the employee is entitled to treatment); it is not a denial of the employee’s entitlement to benefits in general.

295 S.W.3d 646, 649 (Tex. 2009) (citing 25 Tex. Reg. 2096, 2097 (2000)). It is clear that while the issue of compensability had been previously determined by the Commission, the extent of the injury (i.e., specifically whether it included C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy) had not. The trial court therefore had jurisdiction to consider this extent-of-injury issue.

Relatedly, because the sole issue before the Commission in 2016 was whether the compensable injury of 1994 extended to and included C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy, we do not address Menchaca’s argument that ICSP “waived” its right to contest compensability or extent of injury.

“The Workers’ Compensation Act vests the Workers’ Compensation Division with exclusive jurisdiction to determine a claimant’s entitlement to medical benefits.” In re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig. proceeding); see also In re Metro. Transit Auth., 334 S.W.3d 806, 811 (Tex. App.—Houston [1st Dist.] 2011, orig. proceeding [mand. denied] ). When an agency has exclusive jurisdiction, a party must exhaust all administrative remedies before seeking judicial review of the agency’s action. See Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002). “The exhaustion requirement ensures that the administrative agency has the opportunity to resolve disputed fact issues within its exclusive jurisdiction before a court addresses those issues.” In re Metro. Transit Auth., 334 S.W.3d at 811.

*4 The Texas Workers’ Compensation Act provides a four-tier system for the disposition of claims. Subsequent Injury Fund v. Serv. Lloyds Ins. Co., 961 S.W.2d 673, 675 (Tex. App.—Houston [1st Dist.] 1998, pet. denied); see generally 410.002 TEX. LAB. CODE §§ 410.002–410.308. The first tier is a benefit review conference conducted by a benefit review officer. Subsequent Injury Fund, 961 S.W.2d at 675; see 410.021 TEX. LAB. CODE §§ 410.021–.034. From the benefit review conference, the parties may seek relief at a contested case hearing. Subsequent Injury Fund, 961 S.W.2d at 675; see 410.151 TEX. LAB. CODE §§ 410.151–.169. The hearing officer’s decision is final in the absence of an appeal. 410.169 TEX. LAB. CODE § 410.169. At the third tier, a party may seek review by an administrative appeals panel. Subsequent Injury Fund, 961 S.W.2d at 675; see 410.201 TEX. LAB. CODE ANN. §§ 410.201–.209. In the fourth tier, a party aggrieved by a final decision of the appeals panel has the right to seek judicial review of the appeals panel decision. TEX. LAB. CODE § 410.251; Cont’l Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 398 (Tex. 2000); see also In re Tex. Workers’ Comp. Ins. Fund, 995 S.W.2d 335, 337 (Tex. App.—Houston [1st Dist.] 1999, orig. proceeding [mand. denied] ).

A party may not raise an issue in the trial court that was not raised before an appeals panel. 410.302 TEX. LAB. CODE § 410.302(b); In re Metro. Transit Auth., 334 S.W.3d at 811. A trial is “limited to issues decided by the appeals panel and on which judicial review is sought,” and the “pleadings must specifically set forth the determinations of the appeals panel by which the party is aggrieved.” TEX. LAB. CODE § 410.302(b). A party waives judicial review of any issue not raised before the appeals panel and identified in a timely request for judicial review. Zurich Am. Ins. Co. v. Debose, No. 01-13-00344-CV, 2014 WL 3512769, at *6–7 (Tex. App.—Houston [1st Dist.] July 15, 2014, pet. denied) (mem. op.); Thompson v. Ace Am. Ins. Co., No. 01-10-00810-CV, 2011 WL 3820889, at *4 (Tex. App.—Houston [1st Dist.] Aug. 25, 2011, pet. denied) (mem. op.).

Here, the only issue before the Hearing Officer was the following: “Does the compensable injury of January 18, 1994 extend to and include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy?” The Hearing Officer’s decision does not include any findings or conclusions related to waiver. The record also does not include Menchaca’s request for review to the Appeals Panel, only the decision of the Appeals Panel determining that the Hearing Officer’s decision was the final decision, so we are unable to determine whether Menchaca presented the issue of waiver to the Appeals Panel.

Further, Menchaca’s First Amended Petition sets forth the following determinations by which Menchaca claimed he was aggrieved:

1. “[ICSP’s] argument there is no waiver;”

2. Hearing Officer’s conclusion that “[t]he disputed issue required expert medical evidence to establish causation;”

3. Hearing Officer’s finding of fact #1(D) that ICSP has accepted a compensable injury on this claim to include bilateral hand/wrist tendinitis and depression;

4. Hearing Officer’s finding of fact #3 that Menchaca’s C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy were neither caused nor accelerated, enhanced or worsened by Menchaca’s activities at work or the compensable injury of January 18, 1994; and

5. Hearing Officer’s conclusion of law #3 that the compensable injury of January 1, 1994 does not extend to or include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy.2

*5 Although Menchaca references the issue of waiver in his First Amended Petition, it is in reference to an “argument” by ICSP, not in the context of any decision or finding by the Hearing Officer or the Appeals Panel. Menchaca has pointed to nothing in the record to demonstrate that the issue of whether ICSP waived its right to contest compensability or extent of injury was ever presented for consideration or decision in the administrative review process. Because a trial court is “limited to issues decided by the appeals panel and on which judicial review is sought,” and we see no evidence that the issue of waiver was presented or raised before the Hearing Officer or the Appeals Panel, we hold that Menchaca has waived judicial review of this issue. See TEX. LAB. CODE § 410.302(b); Debose, 2014 WL 3512769, at *6–7; Thompson, 2011 WL 3820889, at *4.

We overrule Menchaca’s first issue.3

Summary Judgment

In his second issue, Menchaca argues that the trial court erred in granting ICSP’s no-evidence and traditional motion for summary judgment. In particular, Menchaca raises the following arguments, some of which are the same as those raised in connection with his first issue related to jurisdiction: (1) the no-evidence motion was premature because an adequate time for discovery had not passed; (2) the issue of compensability and extent of injury had already been adjudicated; (3) ICSP waived its right to contest compensability; (4) Menchaca was not required to designate or present expert testimony because the issue of extent of injury had already been adjudicated; (5) Menchaca’s summary judgment response presented more than a scintilla of evidence on all elements; and (6) ICSP failed to comply with 410.258 Labor Code section 410.258 and, therefore, the trial court had no plenary power to render a final judgment. Because we have already addressed arguments two and three in disposing of Menchaca’s first issue, we do not address them again here.

A. Standard of Review

When a party moves for summary judgment on both traditional and no-evidence grounds, as XTO did here, we first address the no-evidence grounds. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). If the non-movant fails to produce legally sufficient evidence to meet his burden as to the no-evidence motion, there is no need to analyze whether the movant satisfied his burden under the traditional motion. Id.

We review no-evidence summary judgments under the same legal sufficiency standard as directed verdicts. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750 (Tex. 2003). Under that standard, we consider evidence in the light most favorable to the nonmovant, crediting evidence a reasonable jury could credit and disregarding contrary evidence and inferences unless a reasonable jury could not. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). The nonmovant has the burden to produce summary judgment evidence raising a genuine issue of material fact as to each challenged element of its cause of action. TEX. R. CIV. P. 166a(i); Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 206 (Tex. 2002). A no-evidence challenge will be sustained when

(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.

*6 King Ranch, 118 S.W.3d at 751 (internal quotation omitted).

To prevail on a “traditional” summary-judgment motion asserted under Rule 166a(c), a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Little v. Tex. Dep’t of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). A matter is established as a matter of law if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller, 168 S.W.3d at 816.

To determine if there is a fact issue, we review the evidence in the light most favorable to the nonmovant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002).

B. No-Evidence Summary Judgment

In its no-evidence motion for summary judgment, ICSP argued that there was no evidence that the compensable injury extends to include C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy or that the compensable injury was the producing cause of Menchaca’s C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis or atrophy. ICSP also argued that there was no evidence to support Menchaca’s claim for lifetime income benefits or that Menchaca had exhausted his administrative remedies as to any claim for lifetime income benefits. As the nonmovant, it was Menchaca’s burden to produce summary judgment evidence raising a genuine issue of material fact as to each challenged element of his cause of action. TEX. R. CIV. P. 166a(i); Johnson, 73 S.W.3d at 206.

1. Adequate time for discovery

Menchaca first argues that the trial court erred in granting the no-evidence summary judgment because the motion was premature. A party may move for a no-evidence summary judgment only “[a]fter adequate time for discovery.” TEX. R. CIV. P. 166a(i). The rule does not require that discovery must have been completed, only that there was “adequate time.” Specialty Retailers, Inc. v. Fuqua, 29 S.W.3d 140, 145 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). In determining whether the trial court has permitted an adequate time for discovery, we generally consider the following non-exclusive factors: (1) the nature of the cause of action; (2) the nature of the evidence necessary to controvert the no-evidence motion; (3) the length of time the case has been active in the trial court; (4) the amount of time the no-evidence motion has been on file; (5) whether the movant has requested stricter time deadlines for discovery; (6) the amount of discovery that has already taken place; and (7) whether the discovery deadlines that are in place are specific or vague. Madison v. Williamson, 241 S.W.3d 145, 155 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).

*7 In support of his contention that an adequate time for discovery had not yet passed, Menchaca points to the fact that the no-evidence motion was filed on May 25, 2018, before the close of discovery on June 15, 2018. We first note that although Menchaca argues that ICSP filed its motion before the close of discovery, the record does not contain a docket control order setting out the specific deadlines for discovery. Second, while a comment to rule 166a states that “ordinarily a motion ... would be permitted after the [discovery] period but not before,” see TEX. R. CIV. P. 166a cmt., we have previously concluded that this comment does not prohibit the filing of a no-evidence motion before the discovery period has ended. See Singleterry v. Etter, No. 01-16-00700-CV, 2017 WL 2545107, at *3 (Tex. App.—Houston [1st Dist.] June 13, 2017, no pet.) (mem. op.); see also Elgohary v. Lakes on Eldridge N. Cmty. Ass’n, Inc., No. 01-14-00216-CV, 2016 WL 4374918, at *5 (Tex. App.—Houston [1st Dist.] Aug. 16, 2016, no pet.) (mem. op.) (affirming no-evidence summary judgment granted three months before discovery period expired); Thibodeaux v. Toys “R” Us–Delaware, Inc., No. 01-12-00954-CV, 2013 WL 5885099, at *3–5 (Tex. App.—Houston [1st Dist.] Oct. 31, 2013, no pet.) (mem. op.) (affirming no-evidence summary judgment granted three weeks before discovery period expired). Thus, even if the no-evidence motion was filed before the close of discovery, this does not automatically mean there has not been adequate time for discovery.

Further, Menchaca has made no effort to identify any specific evidence he needed to respond to ICSP’s motion, nor did he move for a continuance in the trial court to allow for additional time for discovery. See Madison, 241 S.W.3d at 155 (holding that trial court did not abuse its discretion in determining that adequate time for discovery had passed based, in part, on plaintiff’s failure to specify “the additional evidence she needed to respond to the motion, or the reason she could not obtain it during the discovery period”); Lindsey Constr., Inc. v. AutoNation Fin. Servs., LLC, 541 S.W.3d 355, 360 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (“When a party contends it has not had an adequate opportunity for discovery before a summary-judgment hearing or that there has not been adequate time for discovery under Texas Rule of Civil Procedure 166a(i), the party must file either an affidavit explaining the need for further discovery or a verified motion for continuance.”).

Here, Menchaca filed his petition for judicial review in January 2017. Sixteen months later, and less than two months before the trial date, ICSP filed its motion for no-evidence summary judgment. Menchaca did not specify below, or on appeal, any particular evidence that he was unable to obtain during the sixteen months the suit was on file before ICSP filed its no-evidence motion. On the contrary, Menchaca argued in his summary judgment response that he “use[d] due diligence in obtaining discovery despite physical, mental and economic complications,” and that he “meaningfully responded to discovery.” Further, Menchaca’s position below and on appeal is that he had no obligation to present expert or other testimony as to causation because the neck injuries had already been included as part of the compensable injury by the Commission in 1994. Under these circumstances, we conclude that Menchaca has failed to show that the trial court erred in granting the no evidence summary judgment because he did not have an adequate time for discovery.

2. Expert testimony necessary to show causation

Menchaca next argues that was not required to designate or present expert testimony because the issue of the extent of injury had already been adjudicated. Specifically, Menchaca argues that there was no need for expert testimony after these injuries were “diagnosed, treated, and diagnostic tests confirmed [the] extent of injury, followed by confirmation from [ICSP’s] own assigned Medical Expert[, which] conclusively established [that the] injury of 01/18/1994 exten[ded] to and include[d] ‘Cervical Thoracic Condition,’ and requested a Cervical Laminectomy.” Menchaca also argues that there was substantial medical evidence in the record that his 1994 compensable injury was the principal and producing cause of the “cervical thoracic condition.” Menchaca argues that, thus, he was not required to produce additional expert testimony as to causation.

*8 As an initial point, we have already determined that the Commission did not previously adjudicate the extent-of-injury issue. Thus, the only question is whether expert testimony was needed to establish that the C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy were causally related to the compensable injury Menchaca suffered in 1994. We conclude that it was necessary.

As a general rule, expert testimony is necessary to establish causation as to medical conditions outside the common knowledge and experience of jurors. Guevara v. Ferrer, 247 S.W.3d 662, 665 (Tex. 2007). In limited cases, however, lay testimony may support a causation finding that links an event with a person’s physical condition. Id. at 666. This exception applies only in those cases in which general experience and common sense enable a layperson to determine the causal relationship with reasonable probability. See id.; Morgan v. Compugraphic Corp., 675 S.W.2d 729, 733 (Tex. 1984). In such cases, “lay testimony establishing a sequence of events which provides a strong, logically traceable connection between the event and the condition is sufficient proof of causation.” Morgan, 675 S.W.2d at 733.

The types of injuries for which Menchaca sought compensation—C6-C7 foraminal encroachment, cervical radiculopathy, spondylolisthesis and atrophy—are neither common nor basic. See Kelley v. Aldine Indep. Sch. Dist., No. 14-15-00899-CV, 2017 WL 421980, at *3 (Tex. App.—Houston [14th Dist.] Jan. 31, 2017, pet. denied) (holding that claimant needed expert testimony to establish causal connection between work-related fall and additional claimed injuries, including multiple disc herniations, cervical radiculitis, and lumbar radiculopathy, because those injuries were not within jurors’ common knowledge and experience); Croysdill v. Old Republic Ins. Co., 490 S.W.3d 287, 294 (Tex. App.—El Paso 2016, no pet.) (concluding that expert testimony was necessary to determine whether several diagnoses—including lumbar disc displacement, chronic lumbar radiculitis, chronic sciatica, spondylolisthesis, bilateral nerve root irritation, anterior disc herniation, foraminal stenosis, facet arthropathy, and broad-based disc bulge contributing to moderate to severe bilateral neural foraminal stenosis—were causally related to claimant’s compensable back injury); City of Laredo v. Garza, 293 S.W.3d 625, 632–33 (Tex. App.—San Antonio 2009, no pet.) (determining that lay testimony alone was not sufficient to prove medical causation of disc herniations and radiculopathy).

Moreover, even assuming that lay testimony was sufficient to link Menchaca’s conditions to his on-the-job injury, Menchaca has not pointed to any lay testimony, from himself or other lay witnesses, that establishes a sequence of events providing a strong, logically traceable connection between his additional medical conditions and his compensable injury. See Morgan, 675 S.W.2d at 733. Thus, this case is not one in which general experience and common sense enable a layperson to determine the causal relationship with reasonable probability and Menchaca needed expert testimony to establish a causal connection between his work-related injury in 1994 and his additional claimed injuries. See Kelley, 2017 WL 421980, at *3; Croysdill, 490 S.W.3d at 294; Garza, 293 S.W.3d at 632–33.

Having concluded that expert testimony was required, we turn to whether Menchaca satisfied his burden to produce at least a scintilla of evidence of causation in response to ICSP’s no-evidence motion. It is here that Menchaca argues that he did not need to produce expert testimony as to causation because there was substantial medical evidence in the record establishing that the compensable injury was the producing cause of his cervical conditions.4 It is undisputed that Menchaca presented no expert testimony and instead relied on medical records in his summary judgment response. Even if medical records alone could constitute the necessary expert evidence, the medical records relied upon by Menchaca do not establish that the cervical conditions were caused by the compensable injury Menchaca suffered in January 1994.

*9 Here, Menchaca’s medical records show that he was seen initially by a Dr. Robert J. McAnis, who diagnosed Menchaca in 1994 with tendinitis, as well as “bilateral cervical outlet syndrome.” Dr. McAnis referred Menchaca to Dr. Brian A. Schulman, who performed an EMG and nerve conduction study on him due to complaints of pain, numbness and weakness in his right arm. Dr. Schulman noted that he believed that Menchaca had a C-7 radiculopathy. An MRI exam of Menchaca’s cervical spine was then performed in February 1994, which found cervical spondylosis, spinal stenosis, and right neural foraminal attenuation. Finally, on March 8, 1994, Dr. J. Martin Barrash examined Menchaca, who noted that it was his impression that Menchaca has a C6-C7 foraminal encroachment causing C-7 radiculopathy.

However, the records attached to his summary judgment response also show that the only injury reported was tendinitis in both wrists—there is no mention of any cervical injuries. Further, nowhere in these medical records do any of the medical providers opine on the cause of the cervical conditions. In fact, Dr. Barrash described a previous neck injury Menchaca suffered in 1991 “when a heavy piece of metal pulled on his right arm pulling it down and [Menchaca] felt pain into the neck.”

The medical records likewise do not contain any expert opinions as to how Menchaca’s injuries to his wrists could and did cause the cervical conditions. To the contrary, the only statement related to causation found in the records attached to Menchaca’s summary judgment response establish that these two conditions were not causally related. Dr. Barrash stated in a March 23, 1994 letter: “I do not feel that [Menchaca’s] neck is related to his hands and that the hand problems are specifically stated as occurring without mention of [Menchaca’s] neck.” It is not enough for Menchaca to simply provide evidence that he suffered from or was diagnosed with these additional conditions. In order to receive workers’ compensation benefits for these injuries, he needed to establish, through expert testimony, that the compensable injury was a producing cause of those additional conditions. See Garza, 293 S.W.3d at 629.

We cannot conclude that the medical records submitted by Menchaca established the necessary causal connection between the compensable injury and his cervical conditions. See, e.g., Ballard v. Arch Ins. Co., 478 S.W.3d 950, 957–58 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (holding that there was no evidence claimant’s compensable eye injury extended to blindness absent expert testimony affirmatively stating that compensable injury aggravated claimant’s preexisting glaucoma such that it caused blindness); State Office of Risk Mgmt. v. Larkins, 258 S.W.3d 686, 690–91 (Tex. App.—Waco 2008, no pet.) (holding that even if claimant’s medical records could be considered expert testimony, records did not establish that claimant’s depression, anxiety, and post-traumatic stress disorder were causally related to her on-the-job head injury where records did not explain how head injury could or did cause such diagnoses); see also Kelley, 2017 WL 421980, at *3 (holding trial court properly directed verdict in favor of school district where claimant failed to present expert testimony establishing that her work-related fall caused disc herniations, cervical radiculitis, and lumbar radiculopathy). Because the record contains no evidence of causation, the trial court did not err in granting ICSP’s no-evidence summary judgment motion as to Menchaca’s extent of injury claims.5

*10 Because we have concluded that the trial court properly granted ICSP’s no-evidence motion, we do not analyze whether ICSP satisfied its burden under the traditional motion. See Merriman, 407 S.W.3d at 248.

3. Lifetime income benefits

In its no-evidence motion, ICSP also argued that it was entitled to summary judgment on Menchaca’s claim for lifetime income benefits because there was no evidence he had exhausted his administrative remedies as to this claim. As stated above, a party may not raise an issue in the trial court that was not raised before an appeals panel. TEX. LAB. CODE § 410.302(b); In re Metro. Transit Auth., 334 S.W.3d at 811. A party waives judicial review of any issue not raised before the appeals panel and identified in a timely request for judicial review. Debose, 2014 WL 3512769, at *6–7; Thompson, 2011 WL 3820889, at *4.

Here, the only issue before the Hearing Officer was whether the compensable injury extended to and included Menchaca’s additional cervical conditions. The record reflects that Menchaca sought to include additional issues to be considered at the contested hearing, including the issue of lifetime income benefits. ICSP opposed the motion, noting that this issue had already been litigated.6 The Hearing Officer denied Menchaca’s request to add additional issues, finding good cause was not shown. Thus, the Hearing Officer’s decision does not include any findings or conclusions related to Menchaca’s entitlement to lifetime income benefits.

The record also does not include Menchaca’s request for review to the Appeals Panel, only the decision of the Appeals Panel denying the appeal, so we are unable to determine whether Menchaca presented to the Appeals Panel the issue of whether the Hearing Officer abused her discretion in denying his request to add the issue of lifetime income benefits. See Tex. Workers’ Comp. Comm’n, Appeal No. 972042, 1997 WL 34630298, at *3 (Jan. 1, 1997) (“We [appeals panel] review a hearing officer’s ruling on a motion for additional issues under an abuse of discretion standard.”). Moreover, in his petition requesting judicial review, Menchaca does not include the Hearing Officer’s decision denying his motion to include additional issues as one of the specific determinations by which he was aggrieved and for which he sought judicial review in the trial court. See TEX. LAB. CODE § 410.302(b) (“The pleadings must specifically set forth the determinations of the appeals panel by which the party is aggrieved.”). He merely claims in his petition that he is entitled to lifetime income benefits.

*11 Menchaca has not shown that this issue was presented to and considered by the hearing officer, Appeals Panel, or the trial court. Thus, he has waived judicial review of this issue. See Debose, 2014 WL 3512769, at *6–7; Thompson, 2011 WL 3820889, at *4. The trial court properly granted summary judgment on the issue of lifetime income benefits.

4. ICSP’s compliance with TEXAS LABOR CODE § 410.258

Menchaca next argues that the trial court’s final judgment is void because ICSP failed to comply with Texas Labor Code section 410.258. Specifically, Menchaca contends ICSP failed to provide notice to the Commission thirty days before the trial court signed its June 29, 2018 order granting summary judgment in favor of ICSP. We disagree.

Section 410.258(a) requires a party to file “any proposed judgment ... with the division not later than the 30th day before the date on which the court is scheduled to enter the judgment ....” TEX. LAB. CODE § 410.258(a). The division is then given the opportunity to intervene not later than 30 days after receipt of the notice if the commissioner determines that the proposed judgment is not in “compliance with all appropriate provisions of the law.” Id. § 410.258(b), (c). If the division does not intervene, the court shall enter the judgment if the court determines the proposed judgment is in compliance with the law. See Id. § 410.258(d). Finally, if a judgment is entered without complying with the requirements of section 410.258, the judgment is void. Id. § 410.258(f).

Here, the trial court granted summary judgment in favor of ICSP on June 29, 2018. The order expressly states that it is not a final appealable judgment and that “the Court shall enter a final judgment after notification to the Division of Workers’ Compensation [Commission] as set forth in Texas Labor Code § 410.258.” Prior to filing its motion for entry of final judgment, on July 5, 2018, ICSP provided notice to the Commission of the proposed final judgment. In a letter dated July 10, 2018, and in response to a communication from Menchaca, the Commission acknowledged receipt of the proposed final judgment from ICSP and stated that it did “not anticipate filing an intervention petition in [his] judicial review lawsuit because the proposed ‘Final Judgment’ appear[ed] to be in compliance with the Act.” After thirty days had passed from the date that Menchaca provided notice of the proposed final judgment to the Commission, on August 8, 2018, ICSP filed a motion for entry of judgment, which the court signed on September 21, 2018. The final judgment also expressly states that the “notice of the form of judgment was made pursuant to Texas Labor Code § 410.258.”

We conclude that ICSP complied with section 410.258 of the Texas Labor Code by providing notice of its proposed final judgment thirty days before filing its motion for entry of final judgment. ICSP was not required to provide notice of its proposed order on its motion for summary judgment, because any order on that motion was not a “judgment,” but rather interlocutory, and not subject to appeal or review until final judgment was entered. See, e.g., Dallas Symphony Ass’n, Inc. v. Reyes, 571 S.W.3d 753, 763 (Tex. 2019) (“An interlocutory order granting summary judgment is not subject to appeal.” (emphasis in original)). Section 410.258 speaks in terms of a proposed “judgment”; here, the court did not enter a final judgment until after ICSP provided notice of the proposed final judgment to the Commission and filed its motion for entry of final judgment. Accordingly, we hold that ICSP complied with section 410.258 and decline to hold that the trial court’s final judgment was void.

*12 For the reasons stated above, we overrule Menchaca’s second issue.

Findings of Fact and Conclusions of Law

In his third issue, Menchaca argues that, because he received an adverse decision on summary judgment, the trial court erred in failing to issue findings of fact and conclusions of law to explain the basis for its summary judgment ruling. Menchaca argues that because ICSP raised numerous points in its summary judgment, without findings from the court, he “must now guess the reasons behind the trial court[’s] ruling affecting his claim, an overwhelming/burdensome task.”

“[F]indings of fact and conclusions of law have no place in a summary judgment proceeding.” IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441 (Tex. 1997). This is because, for summary judgment to be rendered, there cannot be a genuine issue as to any material fact, and the legal grounds are limited to those stated in the motion and response. Id. “[I]f summary judgment is proper, there are no facts to find, and the legal conclusions have already been stated in the motion and response.” Id. Thus, “[t]he trial court should not make, and an appellate court cannot consider, findings of fact in connection with a summary judgment.” Id. Because there was no need for findings of fact and conclusions of law, we hold that the trial court did not err in failing to issue them at Menchaca’s request.

We overrule Menchaca’s third issue.

Motion for Sanctions

In his fourth issue, Menchaca argues that the trial court erred in “excluding” and failing to hold a hearing on his motion for sanctions. However, we hold that Menchaca has failed to preserve this issue for appeal.

In order to present a complaint on appeal, Texas Rule of Appellate Procedure 33.1 requires that the record demonstrate that (1) the complaint was made to the trial court by a timely request, objection, or motion and (2) the trial court either “ruled on the request, objection, or motion, either expressly or implicitly,” or “refused to rule on the request, objection, or motion, and the complaining party objected to the refusal.” TEX. R. APP. P. 33.1(a).

Here, Menchaca filed a motion for sanctions against ICSP for filing a frivolous and groundless motion for summary judgment. The record reflects that Menchaca filed a notice of hearing on his motion for sanctions for August 31, 2018. At the August 24, 2018 hearing on ICSP’s motion for entry of judgment, the trial court stated that the motion for sanctions was not set for hearing that day but that “[i]f it comes forth, I’ll consider it.” On August 31, 2018, Menchaca emailed the clerk of the 113th District Court, noting that he was informed that the trial court would not hold the hearing on August 31, 2018 on his motion for sanctions, and that he “wanted to go on record and request that the ... motion for sanctions be stayed to be lifted by the court at a later date.” On September 12, 2018, Menchaca filed a “request to trial court” requesting that his “motion for sanctions filed on July 19, 2018 be brought forth to the trial judge for consideration.” However, in a letter filed with the trial court on September 20, 2018, Menchaca stated that he “continues to request that his Motion for Sanctions be stayed for a later date.” On September 21, 2018, the trial court entered an order making the June 29, 2018 order granting summary judgment in favor of ICSP a final and appealable judgment; however, the final judgment makes no mention of the pending motion for sanctions.

*13 The record contains no ruling from the trial court, either implicit or explicit, on Menchaca’s motion for sanctions. Nor does the record reflect that the trial court refused to rule on such motion. In fact, the record reflects the opposite. The trial court indicated its intention to consider the motion, if it was presented to it for a ruling. However, Menchaca’s multiple requests to the trial court that the motion for sanctions be “stayed” demonstrate that he did not pursue a ruling on the motion or object to the trial court’s failure to rule. Thus, we hold that Menchaca failed to preserve this issue for appellate review. See TEX. R. APP. P. 33.1(a).

We overrule Menchaca’s fourth issue.

Additional Issues

In his fifth issue, Menchaca argues that the trial court erred in excluding his “motion to include additional issues.” Specifically, Menchaca argues that the Hearing Officer, and the trial court, erred in excluding his “other issues” relating to his neck, depression, and lifetime income benefits because good cause existed for the addition of such issues. However, we conclude that Menchaca has not preserved this issue for appellate review. Again, in order to preserve a complaint for appellate review, Rule 33.1 requires a party to make a timely request or motion stating the specifics of the complaint, as well as to obtain a ruling from the trial court on the request or motion. TEX. R. APP. P. 33.1(a).

Here, despite Menchaca’s claim that the trial court erred in excluding his “motion to include additional issues,” the record is devoid of any evidence that such a motion was filed in the trial court, or that review of the Hearing Officer’s decision on the motion to include additional issues was appealed to the Appeals Panel. Nor does the record reflect that Menchaca made even an informal request to the trial court to consider his additional issues. And, apart from the statement in his petition that he is entitled to lifetime income benefits, there is nothing in the record to suggest that Menchaca put on any evidence related to these additional issues or why the Hearing Officer abused its discretion in refusing to consider them. Because there is neither evidence that Menchaca made a request or motion to the trial court related to these additional issues, nor evidence that the trial court ever ruled on any such request or motion, we hold that Menchaca has failed to preserve this issue for our review. Id.

We overrule Menchaca’s fifth issue.

Conclusion

We affirm the trial court’s judgment.

Footnotes

1

We conclude that there is nothing in the Commission’s 1995 decision to support Menchaca’s claims that the Commission found that his “bilateral hand wrist tendinitis/coupled with cervical outlet syndrome” injury “was the principal and sole compensable injury” and that ICSP had “waived its right to contest [the] extent of [his] injury.”

2

Menchaca also states that he was aggrieved by the Hearing Officer’s finding of fact #4, but there is no finding of fact #4 in the September 16, 2016 order.

3

In connection with his first issue, Menchaca also argues that he was not required to present expert testimony on causation. As this argument is relevant to determining whether the trial court properly granted summary judgment in favor of ICSP (as opposed to whether the trial court had jurisdiction), we address that argument in connection with Menchaca’s second issue.

4

We note that in support of this argument that there is substantial evidence of a causal connection in the record, Menchaca cites “Vicente A. Menchaca v. Insurance Co. of the State of Pennsylvania, DOCKET NO. HE 94-088955-06-CC-HE48, decided July 16, 2010; “APD 961449”; and “Tab B.” We can find no reference in the record to any previous decision from the Commission in 2010. To the extent that such a decision exists and is relevant to the issues to be decided here, it was Menchaca’s burden to include that in the record on appeal. See Huston v. United Parcel Serv., Inc., 434 S.W.3d 630, 636 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). Further, we presume that the reference to “Tab B” refers to Tab B of Menchaca’s Appendix, which is a copy of his First Amended Petition. Because pleadings are not competent summary judgment evidence, we do not consider his amended petition as evidence. See Laidlaw Waste Sys. (Dall.), Inc. v. City of Wilmer, 904 S.W.2d 656, 660–61 (Tex. 1995). Finally, the Appeals Panel Decision No. 961449 that Menchaca cites merely stands for the same proposition that in order for additional conditions to be compensable, the claimant must demonstrate a causal connection between the compensable injury and the additional conditions, i.e., that the compensable injury was a producing cause of the additional conditions. It in no way supports his argument that there is sufficient evidence in the record here to establish the necessary causal connection between his compensable injury and the additional cervical injuries.

5

Menchaca also includes a brief argument alleging that, although he exhausted his administrative remedies, ICSP failed to follow the same process related to raising its defense of causation and, thus, should not be permitted to raise that argument here. We disagree. Included in the four-tier system set forth in the Workers’ Compensation Act is the ability of an “aggrieved” party to seek judicial review of a final decision by the appeals panel. TEX. LAB. CODE § 410.251. A party who obtains a favorable result at the administrative level and against whom no adverse ruling was made need not affirmatively seek judicial review of the decision. See, e.g., Thompson v. Ace Am. Ins. Co., No. 01-10-00810-CV, 2011 WL 3820889, at *6 (Tex. App.—Houston [1st Dist.] Aug. 25, 2011, pet. denied) (mem. op.) (holding claimant not required to exhaust administrative remedies on issue of date of injury where claimant was prevailing party at both contested hearing and appeals panel and no adverse ruling was made against claimant); In re Metro. Transit Auth., 334 S.W.3d 806, 811 (Tex. App.—Houston [1st Dist.] 2011, orig. proceeding [mand. denied] ) (rejecting argument that claimant failed to exhaust her administrative remedies where claimant appealed hearing officer’s adverse findings to appeals panel and received decision from appeals panel in her favor and, thus, did not file a petition for judicial review in district court). Here, ICSP was the prevailing party at the contested hearing and the appeals panel and there were no adverse rulings made against it. In fact, the Commission found in ICSP’s favor on the issue of causation. ICSP, therefore, was not required to exhaust administrative remedies on the issue of causation.

6

Menchaca previously sought lifetime income benefits from ICSP based on the alleged total and permanent loss of the use of both hands resulting from the 1994 injury. The Commission determined that he was not entitled to lifetime income benefits, the appeals panel denied his administrative appeal, and he sought judicial review of that decision. The trial court granted summary judgment in favor of ICSP and Menchaca appealed. On appeal, the Fourteenth Court of Appeals affirmed, concluding that ICSP’s summary judgment evidence established that Menchaca possessed substantial utility of his hands above the wrists and that his inability to gain and keep employment did not result from the condition of his hands, and Menchaca failed to file a response raising a genuine issue of material fact. Menchaca v. Ins. Co. of State of Penn., No. 14-12-01158-CV, 2014 WL 871206, at *4 (Tex. App.—Houston [14th Dist.] Mar. 4, 2014, no pet.) (mem. op.).

Court of Appeals of Texas, Houston (1st Dist.).

Manisch SOHANI and Anis Virani, Appellants

v.

Nizar SUNESARA, Appellee

NO. 01-19-00122-CV

|

Opinion issued August 25, 2020

Attorneys & Firms

Keval Patel, 19855 Southwest Frwy., Ste. 330, Houston, Texas 77479, Louis F. Teran (Pro Hac), 1055 E. Colorado Blvd., Ste. 500, Pasadena, CA 1106, for Appellants.

Terrie L. Sechrist, Sarah A. Duckers, Sechrist & Duckers LLP, 6300 West loop South, Ste. 415, Bellaire, Texas 77401, for Appellee.

Panel consists of Justices Keyes, Kelly, and Landau.

OPINION

Evelyn V. Keyes, Justice

*1 This case is a dispute between former business associates. Appellants, Manisch Sohani and Anis Virani, sued appellee, Nizar Sunesara, for fraud and sought declaratory relief arising out of Sunesara’s formation of three limited liability companies. Sunesara asserted a counterclaim for declaratory relief, seeking a declaration that he was a member of each LLC and was entitled to one-third of the net profits from each LLC. A jury found that (1) Sunesara was a member of each LLC and was entitled to one-third of the net profits from each LLC, (2) Sohani and Virani were estopped from denying Sunesara’s membership in the LLCs, and (3) Sunesara did not commit fraud. The trial court entered judgment on the jury verdict. In a prior appeal, this Court affirmed the judgment, but modified it to delete the portion providing that Sunesara was entitled to one-third of the net profits from the LLCs. See Sohani v. Sunesara, 546 S.W.3d 393, 410 (Tex. App.—Houston [1st Dist.] 2018, no pet.).

After this Court’s mandate issued, Sohani and Virani filed two motions with the trial court: one seeking reconsideration of the court’s award of attorney’s fees in favor of Sunesara, and one seeking disgorgement of past profits previously distributed to Sunesara. The trial court denied both motions. In this appeal, Sohani and Sunesara argue (1) the trial court abused its discretion by failing to reconsider its award of attorney’s fees and (2) recovery of profits previously paid to Sunesara is “necessary and proper further relief” authorized by the Texas Declaratory Judgments Act (“DJA” or “the Act”).

We affirm.

Background

In 2002, Sunesara and Virani began selling smoking accessories at flea markets in Houston and Austin. In 2003, they decided to open up a brick-and-mortar retail store in Houston, called Zig Zag Smoke Shop, and they brought in Sohani as another owner. In 2012, Sunesara and Virani decided to expand their business, and they opened a second smoke shop called Burn Smoke Shop (“Burn I”). Toward the end of that year, another smoke shop, EZ Smoke Shop, sold its existing business to Sunesara, Virani, and Sohani, and they changed the name of this shop to Burn Smoke Shop Two (“Burn II”).

Before the acquisition of Burn II was finalized, Sohani and Virani asked Sunesara to file paperwork to form three limited liability companies to own and operate the three smoke shops. Sunesara filed paperwork to create three LLCs: ZZSS, LLC (which managed Zig Zag Smoke Shop), BRNSS, LLC (which managed Burn I), and EZSS, LLC (which managed Burn II). The paperwork for the LLCs lists Virani, Sohani, and Sunesara as governing persons. Virani, Sohani, and Sunesara were also all listed as “members” of the LLCs on the signature cards for bank accounts that they opened up for the companies.

Over the next few years, the parties’ working relationship deteriorated, and they began having disputes over whether Sunesara was entitled to profit distributions from the LLCs. Sohani and Virani filed suit against Sunesara in 2015, asserting causes of action for fraud and declaratory relief. With respect to their fraud claim, they alleged that Sunesara improperly listed himself as a member of the LLCs on the paperwork that he filed with the State of Texas and that he fraudulently represented that he was a member entitled to profit distributions and access to the LLCs’ books and records. With respect to their claims for declaratory relief, they sought declarations that Sunesara was not a member of the LLCs, he did not have a membership interest in the LLCs, he was not entitled to review the books and records of the LLCs, and he was not entitled to any profit distributions or other sums from the LLCs.

*2 Sunesara filed several counterclaims against Sohani and Virani, including claims for breach of fiduciary duty, breach of the duty of good faith and fair dealing, quantum meruit, fraud, and promissory estoppel. He sought an accounting and a declaration that he was a member of the LLCs and was entitled to one-third of the profits from the LLCs. Sunesara later dropped his claims for monetary damages, and, at trial, he sought only non-monetary relief, specifically, declarations that he was a member of the LLCs, he was entitled to one-third of the net profits from the LLCs, and he was entitled to examine the books and records of the LLCs.

The jury found that Sunesara was a member of each of the LLCs and was entitled to a one-third profit distribution from each of the LLCs. The jury also found that Sohani and Virani were estopped from denying that Sunesara was a member of the LLCs, and it found that Sunesara did not commit fraud against Sohani or Virani. The jury also made findings concerning both parties’ attorney’s fees. The trial court entered judgment on the jury verdict, declaring that Sunesara was a member of the LLCs and entitled to one-third of the profits from the LLCs, and awarding Sunesara $98,166 in trial-level attorney’s fees and a total of $110,000 in conditional appellate attorney’s fees.

Sohani and Virani appealed the trial court’s judgment to this Court. In one of their issues on appeal, they argued that the trial court’s declaration that Sunesara was a member of each of the LLCs and was entitled to one-third of the profits from the LLCs conflicted with Business Organizations Code section 101.201. Section 101.201 requires an LLC’s allocation of profits and losses to be made “on the basis of the agreed value of the contributions made by each member, as stated in the company’s records,” but no written records demonstrated Sunesara’s contributions to the LLCs or demonstrated that he was entitled to one-third of the profits. See Sohani, 546 S.W.3d at 404. Sohani and Virani did not raise any issues concerning the attorney’s fees. In their prayer for relief, they requested that this Court “set aside the Final Judgment entered by the Trial Court, in particular, the Trial Court’s judgment that [Sunesara] is entitled to profit distributions from the LLCs.”

We construed two sections of the Business Organizations Code

as requiring a limited liability company to include a statement of the amount of cash contributions made by each member and a statement of the agreed value of any other contribution made by each member in the written records of the company and that these records establish the allocation of a member’s share of the profits and losses of the company.

Id. at 407 (construing TEX. BUS. ORGS. CODE ANN. §§ 101.201, 101.501(a)(7)). Because Sunesara offered only his testimony at trial that he made contributions to the LLCs and did not offer any written records reflecting his contributions, we concluded that he presented no evidence that he was entitled to one-third of the profits of the LLCs. Id. We therefore held that “[b]ecause Sunesara was not assigned a share of profits in the company agreements and presented no evidence that he was entitled to a one-third share of profits in the LLCs, he was not entitled to a share in profits as a matter of law” and that the trial court erred to the extent it ruled that Sunesara was entitled to one-third of the profits. Id. at 408. We modified the trial court’s judgment to delete the declaration that Sunesara was entitled to one-third of the profits from the operation of the three LLCs and affirmed the remainder of the trial court’s judgment. Id. at 410. We did not make any holdings concerning attorney’s fees, nor were we asked to do so.

*3 After our mandate issued, Sohani and Virani filed two motions with the trial court. In their first motion, entitled, “Plaintiff’s Motion to Amend Judgment or Reconsideration,” Sohani and Virani requested that the trial court, in light of this Court’s opinion modifying the judgment, vacate the award of attorney’s fees to Sunesara and award attorney’s fees to Sohani and Virani. Sohani and Virani argued that the trial court’s initial attorney’s fees award in favor of Sunesara was based on the fact that he was the prevailing party, pointing to a discussion between counsel and the trial court after the jury verdict in which the court stated that the “normal situation” is that the prevailing party receives attorney’s fees but it wished to hear any arguments for why that practice should not be followed in this case. Sohani and Virani argued that, after this Court’s opinion, “the circumstances have changed substantially” and Sunesara was not the prevailing party. They sought, pursuant to Civil Practice and Remedies Code section 37.009, an award of their trial-level attorney’s fees, as well as their attorney’s fees on appeal because they prevailed on appeal. Alternatively, they requested that the trial court award attorney’s fees to all of the parties.

Sohani and Virani also filed a “Motion for Disgorgement of Ill-Gotten Gains.” They pointed out that, prior to litigation, Sunesara had received profit distributions from the LLCs, totaling around $17,500. They argued that, based on this Court’s opinion, which held that Sunesara was not entitled to profit distributions, “[i]t is now established that such distributions are ill-gotten gains or unjust enrichment,” and they requested that the trial court order Sunesara to return the distributions.

In response, Sunesara argued that because Sohani and Virani did not challenge the attorney’s fees award on appeal, this Court did not reverse the attorney’s fees award or remand the case to the trial court for reconsideration of attorney’s fees, and this Court had issued its mandate and the trial court’s plenary power had expired, it did not have jurisdiction to reconsider the attorney’s fees award. He argued that the trial court only had jurisdiction to issue orders regarding enforcement of the judgment, but it could not issue an order that materially changes the relief awarded in the judgment. With respect to the motion for disgorgement of profits, Sunesara again argued that, because this Court remanded no portion of the judgment to the trial court, the trial court lacked jurisdiction to grant the relief that Sohani and Virani sought. Sunesara also pointed out that Sohani and Virani never sought a finding in the trial court that would support disgorgement as a remedy, and they did not raise the issue of disgorgement on appeal.

After a hearing, the trial court signed orders denying both of Sohani and Virani’s motions on the basis that it lacked jurisdiction to vacate, modify, correct, or reform its final judgment. Sohani and Virani moved for reconsideration, arguing that under Civil Practice and Remedies Code section 37.011, the trial court has jurisdiction to grant supplemental relief based on a declaratory judgment, even after an appeal of the original declaratory relief. In response, Sunesara acknowledged that the trial court likely had jurisdiction to consider Sohani and Virani’s motions, but he argued that they had waived their request for reconsideration of attorney’s fees by not challenging the fee award on appeal and not requesting that this Court remand the fee award to the trial court.

The trial court withdrew its initial orders denying Sohani and Virani’s motions on the basis of lack of jurisdiction, but it nevertheless denied both motions. This appeal followed.

Reconsideration of Attorney’s Fees Award

In their first issue, Sohani and Virani contend that the trial court erred by failing to reconsider its award of attorney’s fees to Sunesara. Specifically, they argue that, while Sunesara was the prevailing party in the trial court, this Court’s previous opinion deleted a declaration in favor of Sunesara, and thus he was “no longer the undisputed prevailing party” in the dispute. Sohani and Virani argue that, in light of this Court’s modification of the judgment, the trial court abused its discretion by failing to reconsider the attorney’s fees award.

*4 The DJA, Civil Practice and Remedies Code Chapter 37, governs declaratory judgments in Texas. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001–.011. Section 37.009 provides that, “[i]n any proceeding under [the DJA], the court may award costs and reasonable and necessary attorney’s fees as are equitable and just.” Id. § 37.009. The statute’s “reasonable and necessary” requirements are questions of fact for the fact finder, but the “equitable and just” requirements are questions of law for the trial court. Ridge Oil Co. v. Guinn Invs., Inc., 148 S.W.3d 143, 161 (Tex. 2004); Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). We review the trial court’s decision to award or not award attorney’s fees under the DJA for an abuse of discretion. Ridge Oil, 148 S.W.3d at 163; Vincent v. Bank of Am., N.A., 109 S.W.3d 856, 868 (Tex. App.—Dallas 2003, pet. denied) (“We broadly construe the trial court’s discretion to award attorney’s fees and costs in a declaratory judgment action.”). A trial court abuses its discretion if it misinterprets or misapplies the law or acts arbitrarily or unreasonably. Tanglewood Homes Ass’n, Inc. v. Feldman, 436 S.W.3d 48, 69 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).

The award of attorney’s fees under the DJA “is clearly within the trial court’s discretion and is not dependent on a finding that a party ‘substantially prevailed.’ ” Barshop v. Medina Cty. Underground Water Conservation Dist., 925 S.W.2d 618, 637 (Tex. 1996) (remanding case after rendition of judgment on merits for defendant for court to “consider and exercise its discretion on the amount of attorney’s fees, if any, which should be awarded to the parties in this case”); Approach Res. I, L.P. v. Clayton, 360 S.W.3d 632, 639 (Tex. App.—El Paso 2012, no pet.) (stating that attorney’s fees award in DJA action is not dependent on finding that party prevailed in action, and trial court may exercise its discretion and decline to award fees to either party); State Farm Lloyds v. C.M.W., 53 S.W.3d 877, 894 (Tex. App.—Dallas 2001, pet. denied) (“[A] trial court may, in its discretion, award attorneys’ fees to the nonprevailing party in a declaratory judgment action.”). “A prevailing party in a declaratory judgment action is not entitled to attorney’s fees simply as a matter of law; entitlement depends upon what is equitable and just, and the trial court’s power is discretionary in that respect.” Marion v. Davis, 106 S.W.3d 860, 868 (Tex. App.—Dallas 2003, pet. denied). “[A]warding attorneys’ fees to the nonprevailing party is not in itself an abuse of discretion.” Vincent, 109 S.W.3d at 868; Tanglewood Homes Ass’n, Inc. v. Henke, 728 S.W.2d 39, 45 (Tex. App.—Houston [1st Dist.] 1987, writ ref’d n.r.e.) (“An award of attorney’s fees under the [DJA] is not limited to the prevailing party.”). “When an appellate court reverses a declaratory judgment, it may reverse an attorney’s fee award, but it is not required to do so.” Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 455 (Tex. 2015); City of Temple v. Taylor, 268 S.W.3d 852, 858 (Tex. App.—Austin 2008, pet. denied) (reversing merits of trial court’s declaratory judgment but declining to reverse attorney’s fees award, noting that when appellant asserts no issues on appeal challenging award of attorney’s fees under DJA, appellant “has waived all complaints in this regard”).

The law presumes that a defendant will “recognize and respect the rights declared by a declaratory judgment and will abide by the judgment in carrying out [his] duties.” Howell v. Tex. Workers’ Compensation Comm’n, 143 S.W.3d 416, 433 (Tex. App.—Austin 2004, pet. denied). However, a party may obtain ancillary injunctive relief when the evidence shows the defendant will not comply with the judgment. Id.; see Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994) (holding that trial court’s issuance of permanent injunction was unnecessary because no evidence existed that defendants would not abide by declaratory judgment). The DJA provides that the trial court may grant “[f]urther relief based on a declaratory judgment or decree ... whenever necessary or proper.” TEX. CIV. PRAC. & REM. CODE ANN. § 37.011. Under the DJA, a party may obtain supplemental ancillary relief, including a permanent injunction, to enforce a declaratory judgment. Funes v. Villatoro, 352 S.W.3d 200, 214 (Tex. App.—Houston [14th Dist.] 2011, pet. denied); see Feldman, 436 S.W.3d at 76 (“Ancillary injunctive relief may be obtained when the evidence establishes that a defendant will not comply with a declaratory judgment.”).

*5 “Courts have granted supplemental relief under the declaratory judgment act after an appeal and may award relief not requested on appeal.” In re State of Texas, 159 S.W.3d 203, 206 (Tex. App.—Austin 2005, orig. proceeding [mand. denied] ); Valley Oil Co. v. City of Garland, 499 S.W.2d 333, 336 (Tex. Civ. App.—Dallas 1973, no writ) (“[T]he losing party in a declaratory judgment action can normally be expected to recognize the rights declared by the judgment and act accordingly, but ... if he fails to do so, the court should have ample power to enforce the judgment by subsequent coercive orders, whether or not such relief was sought in the original action.”). “Further relief” may be sought in the same proceeding or a later proceeding, but when it is sought in a later proceeding, it must be “ ‘additional relief’ arising out of the issues resolved by the prior declaratory judgment.’ ” Lakeside Realty, Inc. v. Life Scape Homeowners Ass’n, 202 S.W.3d 186, 191 (Tex. App.—Tyler 2005, no pet.). Section 37.011 does not permit the relitigation of issues already resolved or the determination of new issues unrelated to the declaratory judgment. Id. We review a trial court’s decision to grant or deny further relief under section 37.011 for an abuse of discretion. Id. at 190.

The Austin Court of Appeals has addressed whether the trial court can award attorney’s fees as “further relief” under section 37.011 in State v. Anderson Courier Service. See 222 S.W.3d 62, 63 (Tex. App.—Austin 2005, pet. denied). In that case, Anderson Courier filed a declaratory judgment action seeking a declaration that a particular statute was unconstitutional, an injunction prohibiting the State from enforcing the statute, and attorney’s fees. Id. at 64. The trial court ruled that the statute was valid. On appeal, Anderson Courier asked the Austin Court of Appeals to reverse and remand the case for further proceedings, but it did not mention attorney’s fees. Id. The Austin Court agreed with Anderson Courier and rendered judgment declaring the statute was unconstitutional. Id. (citing Anderson Courier Serv. v. State, 104 S.W.3d 121, 123 (Tex. App.—Austin 2003, pet. denied)). Anderson Courier did not file a motion for rehearing asking the Austin Court to remand the case for consideration of attorney’s fees. Id. After the Texas Supreme Court denied the State’s petition for review, Anderson Courier filed a motion for supplemental relief under section 37.011 in the trial court, seeking permanent injunctive relief and an award of its attorney’s fees for prosecuting the case. Id. The trial court ordered the State to pay over $350,000 in attorney’s fees as “further relief” under section 37.011. Id. The State appealed the fee award.

The Austin Court addressed other Texas cases construing section 37.011 and concluded that supplemental relief under that section “must serve to effectuate the underlying judgment” and that the relief “must be ancillary to the judgment” and that the parties may not “relitigate issues already resolved by a declaratory judgment.” Id. at 65–66. The court noted that “a declaratory judgment does not necessarily bar supplemental relief even though such relief could have been granted in the original action.” Id. at 66. It also noted that, typically, further relief under section 37.011 “is granted in the form of an injunction for the purpose of enforcing a declaratory judgment where the evidence shows that a party will not comply with the judgment.” Id.

The court stated that “attorney’s fees expended to obtain the initial declaratory relief” could not be considered as relief “in addition to” the judgment because attorney’s fees are “part and parcel of the initial declaratory judgment action, not supplemental relief.” Id. at 66. The court noted that Anderson Courier sought attorney’s fees in its initial declaratory judgment action “but did not pursue the issue on appeal” and thus there was no reason for the Austin Court, in the first appeal of the case, to remand the attorney’s fees issue for further consideration after declaring the statute unconstitutional. Id. The Austin Court noted that Anderson Courier could have, on original submission of its first appeal, raised the attorney’s fees issue and sought remand to the trial court in the event the appellate court agreed with it on the merits of the declaratory judgment action; or, after the initial opinion issued, it could have filed a motion for rehearing seeking remand for reconsideration of attorney’s fees because it was now the prevailing party. Id. at 66–67. In either instance, the case could have been “remanded for consideration of attorney’s fees as part of the appellate decision,” but Anderson Courier did not raise attorney’s fees with the Austin Court: it waited until the mandate had issued and then sought further relief under section 37.011 in the trial court. Id. at 67.

*6 Anderson Courier argued that the award of attorney’s fees as further relief under section 37.011 was proper by pointing to federal case law—in which courts awarded attorney’s fees as further relief under the federal analogue to section 37.011—and section 37.002(c) of the DJA, which provides that the DJA should be interpreted and construed “to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees.” Id.; see TEX. CIV. PRAC. & REM. CODE ANN. § 37.002(c). The Austin Court rejected that argument, noting that, under federal law, attorney’s fees are “not considered with the merits of the case and must be sought by separate motion” after the judgment. Anderson Courier, 222 S.W.3d at 67 (citing FED. R. CIV. P. 54(d)(2)(B), (D)). Under Texas law, on the other hand, attorney’s fees are submitted “with the merits of the underlying dispute,” and a judgment that does not dispose of attorney’s fees is not final. Id. (citing McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001) (per curiam)).

Ultimately, the Austin Court concluded:

[P]ost-judgment relief under section 37.011 of the declaratory judgment act must be additional relief arising out of the original declaratory judgment. Although this does not preclude any relief that might have been requested in the original action, it does not open a back door to seek relief that should have been included in the original judgment or granted by the appellate court. By awarding Anderson Courier’s attorney’s fees for the declaratory judgment absent a remand, the district court permitted Anderson Courier to litigate an issue that it had waived on appeal. The award of attorney’s fees did not serve to effectuate the declaratory judgment.

Id. (internal citation omitted). The court held that the award of attorney’s fees “in obtaining declaratory relief was not necessary or proper further relief under section 37.011,” and the court reversed the attorney’s fees award and rendered a take-nothing judgment in favor of the State. Id. at 67–68.

This case is virtually identical to Anderson Courier. At trial, Sohani and Virani asserted a fraud claim against Sunesara and also sought declaratory relief, including a declaration that Sunesara was not entitled to any profit distributions or other sums from the LLCs. Sunesara asserted competing claims for declaratory relief, including a declaration that he was entitled to one-third of the profits from the LLCs. The jury found in favor of Sunesara on his claims for declaratory relief, found that he did not commit fraud, and awarded attorney’s fees. The trial court entered judgment on the jury verdict. On appeal, Sohani and Virani challenged, among other things, the propriety of the declaration that Sunesara was entitled to one-third of the profits from the LLCs. We agreed with Sohani and Virani that, under two provisions of the Business Organizations Code, Sunesara was not entitled to profit distributions and the trial court erred to the extent that it declared otherwise. We modified the judgment of the trial court to delete this declaration.

On appeal, Sohani and Virani did not ask this Court to review the attorney’s fees award in favor of Sunesara, nor did they ask us to remand the case for reconsideration of the fee award if we found that Sunesara was not entitled to the challenged declaratory relief. After we issued our opinion, in which we modified the judgment to delete the challenged declaration but otherwise affirmed the judgment as modified, Sohani and Virani did not move for rehearing and request that we remand the case for reconsideration of attorney’s fees on the basis that Sunesara was no longer the undisputed prevailing party. Instead, after our mandate issued, Sohani and Virani filed a motion in the trial court seeking reconsideration of the attorney’s fees award under section 37.011.

*7 We agree with the Austin Court of Appeals in Anderson Courier that, under the circumstances of this case, an award of attorney’s fees for prosecution of the original declaratory judgment action and for appeal of that action does not constitute necessary or proper further relief under section 37.011. See id. at 67–68. Unlike under federal law, in which attorney’s fees are not sought until after the merits of the underlying dispute have been decided and a judgment has been signed, under Texas law, attorney’s fees issues are submitted and resolved simultaneously with the dispute and a judgment that does not dispose of a claim for attorney’s fees is not final. See id. at 67; compare Bilmar Drilling, Inc. v. IFG Leas. Co., 795 F.2d 1194, 1202 (5th Cir. 1986) (stating that attorney’s fees award under federal counterpart to section 37.011 “cannot be made until after a declaratory judgment has issued” and that motion for attorney’s fees under that section “is collateral to an action, not precluding issuance of a final, appealable judgment on the merits”), with McNally, 52 S.W.3d at 196 (holding that judgment granting summary judgment motion that addressed only defendant’s declaratory relief claims but not defendant’s claim for attorney’s fees was not final and appealable judgment “because it did not dispose of the defendants’ claim for attorney fees”). The federal cases that Sohani and Virani cite in support of their argument that an award of their attorney’s fees constitutes necessary and proper further relief under section 37.011 are therefore inapposite.

Sohani and Virani had options available to them to seek reconsideration of the attorney’s fees award. They could have challenged the award in an issue on original submission of their prior appeal. Or, after this Court sustained their issue challenging the trial court’s declaration that Sunesara was entitled to profit distributions from the LLCs and issued a judgment modifying the trial court’s judgment and affirming the remainder of the judgment as modified, they could have filed a motion for rehearing and argued that, as Sunesara was no longer the undisputed prevailing party, the attorney’s fees award should be remanded to the trial court for reconsideration. See Anderson Courier, 222 S.W.3d at 66–67. They did not avail themselves of either of these options. We conclude that Sohani and Virani forfeited their ability to seek reconsideration of the attorney’s fees award. See id. at 66–68.

Moreover, Sohani and Virani have not established that the trial court abused its wide discretion by declining to reconsider the attorney’s fees award to Sunesara. The DJA—unlike, for example, Chapter 38 of the Civil Practice and Remedies Code—does not provide that only the prevailing party can recover attorney’s fees. Compare TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (“In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney’s fees as are equitable and just.”), with TEX. CIV. PRAC. & REM. CODE ANN. § 38.001 (“A person may recover reasonable attorney’s fees ... in addition to the amount of a valid claim and costs....”), and Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (“To recover attorney’s fees under Section 38.001, a party must (1) prevail on a cause of action for which attorney’s fees are recoverable....”). A prevailing party in a declaratory judgment action is not entitled to attorney’s fees as a matter of law, see Marion, 106 S.W.3d at 868, and an award of attorney’s fees to a non-prevailing party is not, in itself, an abuse of discretion. Vincent, 109 S.W.3d at 868. Similarly, an appellate court that reverses a declaratory judgment may also reverse the attorney’s fees award, but it is not required to do so. See Kachina Pipeline, 471 S.W.3d at 455; City of Temple, 268 S.W.3d at 858.

This is a case in which all parties obtained relief in their favor. On appeal, this Court deleted one of the declarations in favor of Sunesara. However, Sohani and Virani did not challenge the other declaration in favor of Sunesara, and they also did not challenge the jury’s findings that Sunesara did not commit fraud. Under the DJA, the trial court could have awarded attorney’s fees to Sohani and Virani only, to Sunesara only, to all parties, or to none of the parties. We conclude that the trial court’s decision not to reconsider the attorney’s fees award to Sunesara was not an abuse of its wide discretion to award fees under the DJA.1 See Barshop, 925 S.W.2d at 637.

*8 We overrule Sohani and Virani’s first issue.

Disgorgement of Profits

In their second issue, Sohani and Virani contend that the trial court erred by denying their motion seeking disgorgement of past profits distributed to Sunesara. They argue that, as a result of this Court’s prior holding that Sunesara was not entitled to a share of the profits of the LLCs, the profits previously paid to Sunesara constitute ill-gotten gains and he should be ordered to repay them. They argue that the trial court abused its discretion by failing to grant this “further relief” collateral to the declaratory judgment award.

Disgorgement is an equitable forfeiture of benefits that were wrongfully obtained. In re Longview Energy Co., 464 S.W.3d 353, 361 (Tex. 2015); Henry v. Masson, 333 S.W.3d 825, 849 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (“[D]isgorgement of profits is an equitable remedy, appropriate for causes of action such as breach of fiduciary duty.”). The main purpose of forfeiture as a remedy “is not to compensate an injured principal” but to “protect relationships of trust by discouraging agents’ disloyalty.” ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 872–73 (Tex. 2010) (quoting Burrow v. Arce, 997 S.W.2d 229, 238 (Tex. 1999)). The Texas Supreme Court has stated examples of when disgorgement is an appropriate remedy, including “when a fiduciary agent usurps an opportunity properly belonging to a principal,” when “an agent divert[s] an opportunity from [a] principal or engage[s] in competition with the principal, [and] the agent ... profit[s] or benefit[s] in some way,” and when “a person who renders service to another in a relationship of trust ... breaches that trust.” Longview Energy, 464 S.W.3d at 361 (quoting ERI Consulting Eng’rs, 318 S.W.3d at 873, Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 200 (Tex. 2002), and Burrow, 997 S.W.2d at 237). Texas law limits disgorgement of profits to the amount of a fiduciary’s profits obtained as a result of the fiduciary’s breach of duty.2 Shannon Med. Ctr. v. Triad Hldgs. III, L.L.C., 601 S.W.3d 904, 916 (Tex. App.—Houston [14th Dist.] 2019, no pet.).

Sohani and Virani argue that because this Court held that Sunesara is not entitled, as a matter of law, to profit distributions from the LLCs, the profits distributions that he indisputably received “should not have been given to him in the first place” and were “essentially ill-gotten gains” that they are entitled to recover. Sunesara argues that no evidence was presented at trial that he wrongfully obtained the profit distributions or that he coerced or defrauded Sohani and Virani into making the distributions. He argues that the distributions were voluntary.3 He further argues that Sohani and Virani never pleaded that he breached a fiduciary duty and the jury never made any such findings. As a result, there are no findings that can support disgorgement as a remedy under the facts of this case. We agree with Sunesara.

*9 Sohani and Virani did not assert a breach of fiduciary duty claim against Sunesara, and they did not recover on their fraud claim. Instead, the jury found that Sunesara did not commit fraud, and Sohani and Virani did not challenge that finding on appeal. This Court held that Sunesara was not entitled to profit distributions from the LLCs, but we disagree that that holding necessarily means that the profit distributions Sunesara received prior to suit being filed were wrongful or “ill-gotten.” Sunesara is not entitled to profit distributions, meaning that he does not have the right to demand distributions. The trial testimony, however, was that Sohani and Virani chose to give Sunesara a share of the profits from the LLCs. Under the Business Organizations Code, Sohani and Virani were not required to do this, but the fact that we later determined that Sunesara does not have an entitlement to a share of the profits does not make these distributions wrongful or ill-gotten.

In the absence of any pleadings to support a breach of fiduciary duty claim or jury findings that Sunesara breached a fiduciary duty or otherwise acted wrongfully, we conclude that Sohani and Virani were not entitled to seek post-appeal disgorgement of profits distributed to Sunesara. See ERI Consulting Eng’rs, 318 S.W.3d at 872–73 (stating that main purpose of disgorgement and forfeiture remedy “is to protect relationships of trust by discouraging agents’ disloyalty”); Stephens v. Three Finger Black Shale P’ship, 580 S.W.3d 687, 714 (Tex. App.—Eastland 2019, pet. filed) (holding that trial court erred in awarding damages in form of disgorgement when no evidence existed of relationship of trust “and a breach of the duties arising from it”). We hold that the trial court did not err by denying Sohani and Virani’s motion seeking disgorgement of profits.

We overrule Sohani and Virani’s second issue.

Conclusion

We affirm the judgment of the trial court.

Footnotes

1

Sohani and Virani argue that the trial court’s denial of their motion for reconsideration “was made without reference to any rules or principles and flies in the face of the trial court’s own reasoning in issuing the attorneys’ fee award in the first place,” pointing out that, prior to entry of judgment, the trial court stated its belief that the “normal situation” was to award fees to the prevailing party. At the time of the original trial in this case in 2016, the presiding judge of the Harris County Civil Court at Law Number One was the Honorable Clyde Leuchtag. At the time Sohani and Virani filed their motion for reconsideration in 2018, the presiding judge was the Honorable George Barnstone.

2

The Texas Supreme Court has stated, “While equitable disgorgement is a viable remedy for breach of trust by a fiduciary, we have not expressly limited the remedy to fiduciary relationships nor foreclosed equitable relief for breach of trust in other types of confidential relationships.” Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 729 (Tex. 2016).

3

In their reply brief, Sohani and Virani agree that this is an accurate characterization of the distributions.

Court of Appeals of Texas, Houston (1st Dist.).

Thim T. NGUYEN, et al., Appellants

v.

Mikal C. WATTS; Francisco Guerra IV; John Hunter Craft; David Watts; Watts Guerra, LLP; Watts Guerra & Craft, LLP; Robert C. Hilliard; Robert C. Hilliard LLP; and Hilliard Munoz Gonzales, LLP, Appellees

NO. 01-18-00421-CV

|

Opinion issued May 28, 2020

Attorneys & Firms

Kevin Dubose, Houston, Texas 77008, Lance Christopher Kassab, David Eric Kassab, Houston, Texas 77004, Minh Tam Tammy Tran, Houston, Texas 77002, for Appellants.

Mikal C. Watts, Michael J. Murray, Travis C. Headley, Watts Guerra, LLP, San Antonio, Texas 78257, David J. Beck, Fields Alexander, Michael E. Richardson, Joel T. Towner, Kyle Lawrence, Houston, Texas 77010, for Appellees.

Panel consists of Chief Justice Radack and Justices Landau and Hightower.

OPINION

Richard Hightower, Justice

*1 This appeal arises from a suit brought by Appellants—439 individuals1—against numerous attorneys and their law firms, including (1) Appellees Mikal C. Watts, Francisco Guerra IV, John Hunter Craft, David Watts, Watts Guerra, LLP, and Watts Guerra & Craft, LLP (collectively, “Watts Appellees”) and (2) Appellees Robert C. Hilliard, Robert C. Hilliard, LLP, and Hilliard Munoz Gonzales, LLP (collectively, “Hilliard Appellees”), alleging violations of the civil barratry statute, see TEX. GOV’T CODE § 82.0651(c), and derivative claims of conspiracy and aiding and abetting. Appellants also sued the Watts Appellees for unjust enrichment and invasion of privacy by misappropriation of name and likeness.

The Watts Appellees and Hilliard Appellees—as well as other settling defendants that are not parties to this appeal—filed traditional motions for summary judgment. Among the grounds for summary judgment, Appellees asserted that (1) certain conduct alleged by Appellants to constitute civil barratry did not violate the civil barratry statute and (2) the statute of limitations barred Appellants’ barratry claims. The Watts Appellees also challenged the propriety of the unjust enrichment claim and asserted that the invasion-of-privacy-by-misappropriation claim, conspiracy claim, and aiding and abetting claim were barred by limitations. In a series of orders, the trial court granted summary judgment, disposing of all Appellants’ claims against the Watts and Hilliard Appellees. On appeal, Appellants raise four issues challenging the summary judgment against them.

We affirm in part, reverse in part, and remand for further proceedings.

Background

The Deepwater Horizon Explosion

British Petroleum (“BP”) leased its offshore drilling rig, the Deepwater Horizon, to drill the Macondo Well off the coast of Louisiana. In re Deepwater Horizon, 739 F.3d 790, 795 (5th Cir. 2014). On April 20, 2010, the Deepwater Horizon exploded after the well blew out. Id. at 795–96. “After the initial explosion and during the ensuing fire, the vessel sank, causing millions of barrels of oil to spill into the Gulf of Mexico.” Id. at 796. The oil contaminated the shores and estuaries of the Gulf Coast states, “inflicting billions of dollars in property and environmental damage and spawning a litigation frenzy.” In re Deepwater Horizon, 745 F.3d 157, 161 (5th Cir. 2014).

Conduct Related to the BP Litigation

In June 2010, Mikal Watts and his firm Watts Guerra & Craft, LLP (“WGC”) entered into a joint venture agreement with attorney Robert Hilliard to share costs and fees in the representation of clients against BP relating to the oil spill. Hilliard financed his contribution, in part, with funds from Duncan Litigation Investments. Another attorney, John Cracken, also agreed to contribute funding.

Appellants allege that Watts and WGC engaged non-lawyer case recruiters (“case recruiters”) to sign up clients who had agreed to be represented by Watts and his firm in the BP litigation. Appellants alleged that Watts, and the other parties funding the joint venture, paid the case recruiters $250 for each client they signed up to be represented by WGC.

*2 Appellants contend that the case recruiters ultimately provided WGC with the names and personal information of over 40,000 individuals who had ostensibly agreed to be represented by WGC in the BP litigation. These individuals purportedly worked in the Gulf Coast fishing industry and had been economically damaged by the oil spill. Appellants contend that in exchange for providing the list of purported clients, Watts paid the case recruiters over $10 million. In 2010 and 2011, WGC filed claims against BP on behalf of the individuals through BP’s settlement clearinghouse, the Gulf Coast Claims Facility.

All claims relating to the oil spill were consolidated into a federal multi-district litigation proceeding in the Eastern District of Louisiana. The federal court appointed Watts to the Plaintiffs’ Steering Committee (“the PSC”) after he stated in his PSC application that he “represented[ed] over 40,000 plaintiffs” in the BP litigation.

In 2012, BP agreed to settle the oil-spill claims. It established the Seafood Compensation Program to compensate those who earned a living in the Gulf Coast’s seafood industry and had suffered economic losses as a result of the oil spill. To be part of the settlement, a claimant was required to make a formal written “presentment” to BP. In mid-January 2013, Watts and his firm, WGC, submitted “presentment forms” on behalf of over 40,000 claimants, including Appellants. Watts signed the presentment forms representing himself to be the claimants’ attorney and indicated in the forms that the claimants worked in the commercial fishing industry and had been adversely affected by the oil spill.

BP suspected that the claims made by Watts and his firm on behalf of the 40,000 plus claimants were not legitimate. An investigation showed that BP’s suspicions were correct. The investigation revealed that the case recruiters had manufactured a claimant list containing false claimants. The case recruiters had used the phone book to identify individuals with Vietnamese surnames. After identifying a qualifying name, the case recruiters had then listed the person as a fisherman-claimant even though the individual had not given permission to be identified as a claimant and had not agreed to be represented by WGC.

Some of the listed claimants were not commercial fishermen who had suffered economic injury as a result of the oil spill. And some of the social security numbers listed for the claimants were false or stolen. The listed claimants—including Appellants—had not authorized Watts or WGC to represent them or to file claims on their behalf, including the presentment forms filed by Watts in January 2013.

Bexar County Class Action

On May 14, 2014, five of the Appellants2 in this case filed a class action in Bexar County against Watts and his firm, Watts Guerra, LLP, the successor firm of WGC.3 The class action initially asserted a claim for invasion of privacy by misappropriation of name and likeness. The class-action petition alleged that Watts had obtained his position on the PSC by stating in his application to the federal court that he and his firm “represented over 40,000 clients injured by the Deepwater Horizon Oil Spill” when they “did not actually represent the individuals and/or entities they claimed to represent.”

*3 On August 29, 2014, the class action was certified to include “[a]ll persons or entities who [Watts and Watts Guerra, LLP] claimed to represent in the BP Litigation but who [Watts and Watts Guerra, LLP] did not actually represent in the BP Litigation.” A later, amended petition added claims for civil barratry pursuant to Government Code Subsection 82.0651(c).

Criminal Charges

In September 2015, Watts and the case recruiters (as well as others) were indicted in federal court in Mississippi on 95 counts of fraud and conspiracy. The indictment alleged that Watts and his co-conspirators—the case recruiters—had submitted the names of over 40,000 claimants in the BP litigation even though they knew (1) that the claimants had not consented to be represented by WGC, (2) that false social security numbers, addresses, and false birthdates were used to identify some of the claimants, and (3) that some of the claimants did not work in the fishing industry.

Watts defended against the charges by asserting that he had been scammed by the case recruiters. He claimed that he had believed that the claimant list and the supporting documentation provided by the case recruiters were legitimate. Two of the case recruiters were found guilty, but Watts was acquitted of all charges.

Filing of the Instant Suit and Appellants’ Pleadings

In March 2016, a single plaintiff, Thim T. Nguyen, filed the instant suit against Hilliard and Cracken—the two attorneys who had agreed to provide funding for the BP litigation—for misappropriation of identity based on the filing of the BP claims.4 The Second Amended Petition, filed in August 2016, added more plaintiffs. It also named Francisco Guerra, IV, John Hunter Craft, and Duncan Litigation Investments as new defendants. The plaintiffs alleged that, when Watts and WGC filed the presentment forms on behalf of over 44,000 claimants, the defendants knew that Watts and WGC did not represent the claimants. Based on these allegations, the plaintiffs asserted only a cause of action for civil barratry under Government Code Subsection 82.0651(c).

The Third Amended Petition, filed in September 2016, named 389 plaintiffs and added Mikal Watts, WGC, and David Watts as defendants. Duncan Litigation Investments’s principle, Max Duncan, was also added. The plaintiffs pled that the statutes of limitations did not bar their claims because the discovery rule tolled the limitations periods. The defendants answered the suit, generally denying the claims and raising affirmative defenses, including limitations.

The Sixth Amended Petition, filed in May 2017, named 440 plaintiffs. It added claims for invasion of privacy by misappropriation of name and likeness and for unjust enrichment against the Watts Appellees. The plaintiffs supported these claims by alleging that Watts had been appointed to the PSC in the BP multidistrict litigation based on Watts’s general assertion in his PSC application that he represented over 40,000 claimants—including the plaintiffs—in the BP litigation. The plaintiffs alleged that, by virtue of his position on the PSC, Watts and his firm had been awarded nearly $18 million in “common benefit” attorney’s fees. The plaintiffs requested “the equitable remedy of a constructive trust to recover” the attorney’s fees that the defendants had “obtained through unjust enrichment by misappropriating [their] name[s] and likeness[es].”

*4 The Eighth Amended Petition—the live pleading in this case—named 439 plaintiffs, who are Appellants here. In that pleading, Appellants continued to assert a cause of action for civil barratry under Government Code Subsection 82.0651(c). Appellants claimed that Watts’s (and allegedly Hilliard’s) filing of the presentment forms in January 2013 constituted actionable conduct under that statutory provision.

Appellants also alleged that, after realizing that the 40,0005 individuals identified by the case recruiters had not agreed to representation by WGC, the defendants sent eight mass mailings to those individuals (which included Appellants) from July 2012 to January 2013, requesting them to sign forms agreeing to representation by WGC and giving the firm authority to act on their behalf in the BP litigation. Appellants alleged that, to further pursue representation, the defendants began telephoning the 40,000 purported claimants in October 2012. The phone calls continued until January 2013. Appellants claimed that the conduct of telephoning the 40,000 purported claimants, paying non-lawyers to solicit Appellants, and entering into a joint venture agreement to commit barratrous conduct was actionable conduct under Government Code Subsection 82.0651(c). For the conduct violating the statute, Appellants requested statutory penalties, actual damages in the form of mental anguish damages, and attorney’s fees.

Appellants continued to assert claims for unjust enrichment and invasion of privacy by misappropriation of likeness and name against the Watts Appellees. The claims were factually premised on the common benefit attorney’s fees awarded to Watts for his work on the PSC in the federal multi-district litigation. Appellants dropped the invasion-of-privacy-by-misappropriation and unjust enrichment claims against the other defendants. Appellants also asserted claims for conspiracy and aiding and abetting against all defendants.

Appellants continued to assert that the discovery rule tolled the limitations’ periods on all their claims.6 Appellants were later granted leave to supplement their Eighth Amended Petition to assert that the 2014 Bexar County class action against Watts and Watts Guerra, LLP tolled the running of limitations on Appellants’ claims against those two defendants.

Motions for Summary Judgment

The defendants filed a series of motions for summary judgment, challenging the barratry claims. The defendants asserted (1) that the conduct alleged by Appellants did not support a barratry claim under Government Code Subsection 82.0651(c) and (2) that the barratry claims were barred by limitations. Among their responsive summary-judgment evidence, Appellants offered their individual declarations. In the declarations, Appellants uniformly stated that they had received phone calls from WCG in 2012 ending in January 2013. The calls had requested Appellants to permit WCG to represent them. Appellants also stated that they did not learn until 2015 that Watts had filed presentment forms on their behalf in January 2013.

*5 The trial court issued a series of orders on the motions, ultimately granting summary judgment on the barratry claims. In the orders, the trial court identified conduct by the defendants that Appellants alleged constituted a violation of Government Code Subsection 82.0651(c), a provision of the civil barratry statute. That conduct included telephoning Appellants, as late as January 2013, to obtain their authorization for WGC to represent them in the BP litigation and the filing of the presentment forms on Appellants’ behalf in January 2013. Related to this conduct, the trial court made the following determinations in its orders, supporting summary judgment on the civil barratry claims:

• Section 82.0651(c) of the civil barratry statute requires “each individual plaintiff to show solicitation.” “[M]erely filing an unauthorized claim, although barratry, does not constitute ‘solicitation’ within the meaning of [Subsection 82.0651(c) ]” because civil barratry requires “actual communication with the client.”

• The applicable statute of limitations for a barratry claim under Subsection 82.0651(c) is two years, and “there were no solicitations during the two-year period” prior to Appellants’ filing suit because “the most recent solicitations were the phone calls, the last of which occurred in January of 2013.”

• The discovery rule did not toll limitations on Appellants’ civil barratry claims that were based on solicitations.

• The Bexar County class action did not toll limitations on Appellants’ claims against Mikal Watts and Watts Guerra, LLP.

The Watts Appellees also sought summary judgment on Appellants’ unjust enrichment and restitution claim, arising from payment of $18 million in common benefits attorney’s fees to Watts and his firm for their work on the PSC. Among its summary-judgment grounds, the Watts Appellees argued that Appellants were not entitled to recover the attorney’s fees because they had not paid the attorney’s fees; rather, the fees were paid by BP and other defendants in the BP litigation. The trial court agreed, granting summary judgment on the unjust enrichment claim.

The trial court also granted the Watts Appellees’ motion for summary judgment on Appellants’ claims for (1) invasion of privacy by misappropriation of name and likeness, (2) conspiracy, and (3) aiding and abetting based on limitations. Finally, the trial court overruled Appellants’ objections to the Watts Appellees’ summary-judgment evidence offered in support of their motions for summary judgment on Appellants’ claims for unjust enrichment and invasion of privacy by misappropriation.

The Cracken and Duncan defendants settled with Appellants, and the trial court signed an order dismissing Appellants’ claims against those defendants with prejudice. The trial also severed remaining crossclaims between the defendants. Taken together, the trial court’s orders dismissing the settled claims and granting summary judgment for the Watts and Hilliard Appellees (collectively, “Appellees”) disposed of all the remaining claims and parties, thus constituting a final and appealable judgment. See Webb v. Jorns, 488 S.W.2d 407, 408–09 (Tex. 1972) (holding that interlocutory judgment merged into final judgment, which was then appealable); see also Azbill v. Dallas Cty. Child Protective Servs. Unit of the Tex. Dep’t of Human & Regulatory Servs., 860 S.W.2d 133, 137 (Tex. App.—Dallas 1993, no writ) (concluding that “dispositive orders need not appear in one document for a judgment to be final”).

Summary Judgment

Appellants raise four issues on appeal. In their first three issues, Appellants challenge the trial court’s summary judgment in favor of Appellees.

A. Standard of Review

*6 We review de novo a trial court’s ruling on a motion for summary judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). A party moving for traditional summary judgment, as here, has the burden to prove that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637, 641 (Tex. 2015). A defendant is entitled to summary judgment if it conclusively negates an essential element of the plaintiff’s case or conclusively establishes all elements of an affirmative defense. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995).

In reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When the trial court has specified the basis for its grant of summary judgment, we will consider all the summary-judgment grounds on which the trial court has ruled, that the movant has preserved for appellate review, and that are “necessary for final disposition of the appeal.” Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).

B. Civil Barratry

Appellants’ first issue challenges summary judgment on their barratry claims asserted pursuant to Government Code Subsection 82.0651(c). See TEX. GOV’T CODE § 82.0651(c).

1. Legal Principles

“Barratry is the solicitation of employment to prosecute or defend a claim with intent to obtain a personal benefit.” State Bar of Tex. v. Kilpatrick, 874 S.W.2d 656, 658 n.2 (Tex. 1994). “Barratry by solicitation has been criminalized in the State of Texas since 1901, when the penal code was amended to outlaw ‘the fomenting of litigation by attorneys at law by soliciting employment.’ ” State v. Mays, 967 S.W.2d 404, 408–09 (Tex. Crim. App. 1998) (quoting McCloskey v. San Antonio Traction Co., 192 S.W. 1116, 1119 (Tex. Civ. App.—San Antonio 1917, writ ref’d)). Currently, Penal Code Section 38.12 governs the criminal offense of barratry, providing, in relevant part, as follows:

(a) A person commits an offense if, with intent to obtain an economic benefit the person:

(1) knowingly institutes a suit or claim that the person has not been authorized to pursue;

(2) solicits employment, either in person or by telephone, for himself or for another;

(3) pays, gives, or advances or offers to pay, give, or advance to a prospective client money or anything of value to obtain employment as a professional from the prospective client;

(4) pays or gives or offers to pay or give a person money or anything of value to solicit employment;

(5) pays or gives or offers to pay or give a family member of a prospective client money or anything of value to solicit employment; or

(6) accepts or agrees to accept money or anything of value to solicit employment.

(b) A person commits an offense if the person:

(1) knowingly finances the commission of an offense under Subsection (a);

(2) invests funds the person knows or believes are intended to further the commission of an offense under Subsection (a); or

(3) is a professional who knowingly accepts employment within the scope of the person’s license, registration, or certification that results from the solicitation of employment in violation of Subsection (a).

TEX. PENAL CODE § 38.12(a)–(b).

Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct, entitled “Prohibited Solicitations and Payments,” also addresses barratry. See TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 7.03, reprinted in TEX. GOV’T CODE, tit. 2, subtit. G, app. A. Rule 7.03 provides, in relevant part, as follows:

*7 (a) A lawyer shall not by in-person contact, or by regulated telephone or other electronic contact as defined in paragraph (f) seek professional employment concerning a matter arising out of a particular occurrence or event, or series of occurrences or events, from a prospective client or nonclient who has not sought the lawyer’s advice regarding employment or with whom the lawyer has no family or past or present attorney-client relationship when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain....

....

(f) As used in paragraph (a), “regulated telephone or other electronic contact” means any electronic communication initiated by a lawyer or by any person acting on behalf of a lawyer or law firm that will result in the person contacted communicating in a live, interactive manner with any other person by telephone or other electronic means. For purposes of this Rule a website for a lawyer or law firm is not considered a communication initiated by or on behalf of that lawyer or firm.

Id. R. 7.03(a), (f).

In 1989, the legislature provided a civil remedy for barratry by enacting Government Code Section 82.065. See Neese v. Lyon, 479 S.W.3d 368, 376 (Tex. App.—Dallas 2015, no pet.). Before the enactment, Texas did not recognize a private cause of action for barratry in favor of an improperly solicited client. Id. at 378.

Section 82.065 addressed contingent-fee contracts and barratry:

(a) A contingent fee contract for legal services must be in writing and signed by the attorney and client.

(b) A contingent fee contract for legal services is voidable by the client if it is procured as a result of conduct violating the laws of this state or the Disciplinary Rules of the State Bar of Texas regarding barratry by attorneys or other persons.

Act of May 27, 1989, 71st Leg., R.S., ch. 866, § 3, sec. 82.065, 1989 Tex. Gen. Laws 3855, 3857 (amended 2011 and 2013) (current version at TEX. GOV’T CODE § 82.065).

In 2011, the legislature amended Section 82.065 and enacted Section 82.0651.7 Neese, 479 S.W.3d at 377. As enacted, Section 82.0651, entitled “Civil Liability for Prohibited Barratry,” contained the following provisions:

(a) A client may bring an action to void a contract for legal services that was procured as a result of conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas regarding barratry by attorneys or other persons.

(b) A client who prevails in an action under Subsection (a) shall recover from any person who committed barratry:

(1) all fees and expenses paid to that person under the contract;

(2) the balance of any fees and expenses paid to any other person under the contract, after deducting fees and expenses awarded based on a quantum meruit theory as provided by Section 82.065(c);

(3) actual damages caused by the prohibited conduct; and

(4) reasonable and necessary attorney’s fees.

(c) A person who was solicited by conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry.

(d) A person who prevails in an action under Subsection (c) shall recover from each person who engaged in barratry:

(1) a penalty in the amount of $10,000;

(2) actual damages caused by the prohibited conduct; and

(3) reasonable and necessary attorney’s fees.

(e) This section shall be liberally construed and applied to promote its underlying purposes, which are to protect those in need of legal services against unethical, unlawful solicitation and to provide efficient and economical procedures to secure that protection.

*8 (f) The provisions of this subchapter are not exclusive. The remedies provided in this subchapter are in addition to any other procedures or remedies provided by any other law, except that a person may not recover damages and penalties under both this subchapter and another law for the same act or practice.

Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 2, sec. 82.0651, 2011 Tex. Gen. Laws 534, 535.

In this case, Appellants sued Appellees for civil barratry under Subsection 82.0651(c). In 2013, the legislature amended Section 82.0651, including Subsection (c) as follows:

(c) A person who was solicited by conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry.

Act of May 15, 2013, 83rd Leg., ch. 315, § 2, 2013 Tex. Gen. Laws 1073, 1074 (current version TEX. GOV’T CODE § 82.0651(c)).8 On appeal, Appellants complain that, in its summary-judgment orders, the trial court incorrectly determined that the 2013 version of Subsection 82.0651(c) applies to Appellants’ barratry claims. Appellants contend that the 2011 version of Subsection 82.0651(c) applies to their claims because the conduct on which they base their barratry claims occurred after September 1, 2011 but before September 1, 2013.

The 2011 version of Subsection 82.0651(c) required “conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct” while the 2013 amendment more specifically requires “conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct.” Compare Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 2, sec. 82.0651, 2011 Tex. Gen. Laws 534, 535-36 with Act of May 15, 2013, 83rd Leg., ch. 215, § 2, 2013 Tex. Gen. Laws 1073, 1074. We agree with Appellees that whether we apply the 2011 or 2013 version does not change the outcome or analysis in this case.

To support their barratry claims, Appellants alleged violations of Penal Code Subsection 38.12(a) and Disciplinary Rule 7.03, as now specifically required in the 2013 version. And both the 2011 and 2013 versions of Subsection 82.0651(c) require a person to be “solicited by” the violating conduct for it to be actionable. The dispute here centers on whether Appellants were “solicited by” the violating conduct. Thus, because the outcome will be unaffected, we cite the current version of Subsection 82.0651(c) for ease of reference.

2. Unauthorized Filing of Presentment Forms

With respect to the conduct underlying their barratry claims, Appellants assert that they “primarily based their Subsection 82.0651(c) claims on the unauthorized filing of the presentment forms” in January 2013. As part of the summary-judgment proceedings, a disagreement arose regarding whether the unauthorized filing of the presentment forms was actionable conduct under Subsection 82.0651(c) as a matter of statutory interpretation.

*9 To reiterate, Subsection 82.0651(c) provides,

(c) A person who was solicited by conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry.

TEX. GOV’T CODE § 82.0651(c).

In granting summary judgment on the barratry claims, the trial court determined in its orders that Subsection 82.0651(c) required “each individual plaintiff to show solicitation.” The court determined that “merely filing an unauthorized claim, although barratry, [did] not constitute ‘solicitation’ within the meaning of [Subsection 82.0651(c) ]” because civil barratry requires “actual communication with the client.” In other words, the trial court determined that, to be actionable under Subsection 82.0651(c), the violative conduct must have solicited the would-be plaintiff, and a solicitation requires communication with that person.

Appellants dispute the trial court’s reading of Subsection 82.0651(c). They assert that an actual communication to them need not be shown for them to have been “solicited” for purposes of Subsection 82.0651(c). They contend that they need only show that the unauthorized filing of the presentment forms was a violation of Penal Code Subsection 38.12(a)(1). That subsection provides that “[a] person commits an offense if, with intent to obtain an economic benefit[,] the person: (1) knowingly institutes a suit or claim that the person has not been authorized to pursue.” TEX. PENAL CODE § 38.12(a)(1).

Appellants assert that—because the unauthorized filing of the presentment forms was conduct violating Penal Code Subsection 38.12(a)(1)—the requirement to demonstrate that they were persons “who [were] solicited by conduct violating the laws of this state” was met. They aver that “ ‘a person who was solicited’ necessarily includes those persons who were subject to any conduct violating Texas Penal Code § 38.12(a), including the unauthorized filing of claims.” Appellants equate “solicited by” with “any conduct violating Texas Penal Code § 38.12(a).”

We disagree with Appellants’ reading of Subsection 82.0651(c). When interpreting a statute, we must apply it “as written” and “refrain from rewriting text that lawmakers chose.” Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 443 (Tex. 2009). We give effect to all the statute’s words and, if possible, do not treat any statutory language as mere surplusage. State v. Shumake, 199 S.W.3d 279, 287 (Tex. 2006). “We presume there is a purpose for every word and clause used, since the words used are the surest guide to the [legislature’s] intent.” Kilgore Indep. Sch. Dist. v. Axberg, 572 S.W.3d 244, 260 (Tex. App.—Texarkana 2019, pet. denied) (citing Summers, 282 S.W.3d at 437).

Had it intended for a plaintiff to recover under Subsection 82.0651(c) by showing only a violation of the relevant Penal Code or Disciplinary Rule provisions, the legislature could have made violations of those provisions coextensive with a right of private action without requiring the plaintiff to be “solicited by” the violation. Instead, the legislature requires plaintiffs to be “solicited by” the violative conduct as a qualifying element of recovery. See TEX. GOV’T CODE § 82.0651(c). If we adopt Appellants’ reading of Subsection 82.0651(c), we would not be giving effect to every word in the statute and would be rendering the phrase “solicited by” surplusage. See Shumake, 199 S.W.3d at 287. This would be counter to the presumption that we must ensure that every word and clause in a statute has a purpose. See Axberg, 572 S.W.3d at 260.

*10 We conclude that Subsection 82.0651(c) requires, not only a violation of the specific Penal Code or Disciplinary Rule provisions, it also requires the plaintiff to have been “solicited by” the prohibited conduct. See Tex. Law Shield v. Crowley, 513 S.W.3d 582, 590 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (concluding, in context of class-action certification, that “[p]laintiffs alleging a violation of section 82.0651(c) must establish that they were ‘solicited by conduct violating’ the disciplinary rules”). Construing Subsection 82.0651(c) in this manner gives meaning and effect to the words the legislature chose. See Jaster v. Comet II Constr., Inc., 438 S.W.3d 556, 562 (Tex. 2014) (recognizing that courts must give effect to every word, clause, and sentence of a statute). “Our construction does no violence to the statutory edict that courts liberally construe the civil barratry statute to accomplish its purpose to protect those in need of legal services against unethical, unlawful solicitation.” Tex. Law Shield, 513 S.W.3d at 590 (citing TEX. GOV’T CODE § 82.0651(e)). “Liberal construction does not authorize a court to disregard the statute’s plain language.” Id. (citing Romo v. Payne, 334 S.W.3d 364, 369 (Tex. App.—El Paso 2011, no pet.)).

Appellants also contend that, under the common definition of “solicit,” they were “solicited by” the unauthorized filing of the presentment forms. The term “solicit” is not defined in the civil barratry statute.

When a statute contains a term that is undefined, as “solicit” is in this case, the term is typically given its ordinary meaning. See State v. $1,760.00 in U.S. Currency, 406 S.W.3d 177, 180 (Tex. 2013). However, we will not give an undefined term a meaning that is out of harmony or inconsistent with other terms in the statute. Id. “[I]f a different, more limited, or precise definition is apparent from the term’s use in the context of the statute, we apply that meaning.” In re Hall, 286 S.W.3d 925, 929 (Tex. 2009).

In addition to defining “solicit” as “to make petition: entreat,” dictionaries define “solicit” as “to urge.” MERRIAM WEBSTER’S COLLEGIATE DICTIONARY 1118 (10th ed. 1996). Given that we are interpreting a barratry statute, the context directs us to apply a definition of “solicit” related to attorney conduct. See In re Hall, 286 S.W.3d at 929 (applying dictionary’s second definition of “detention” as term used in Juvenile Justice Code). One of the definitions offered by the Seventh Edition of Black’s Law Dictionary for “solicitation” is “[a]n attempt or effort to gain business <The attorney’s solicitations took the form of radio and television ads>.” BLACK’S LAW DICTIONARY 1398 (7th ed. 1999). Black’s then notes that “[t]he Model Rules of Professional Conduct place certain prohibitions on lawyers’ direct solicitation of potential clients.” Id.

In their brief, Appellants cite Black’s Tenth Edition definition of “solicitation.” Appellants state that the Tenth Edition defines “solicitation” as “an attempt or effort to gain business,” which may occur “even if the command or urging was not actually communicated to the solicited person, as long as it was designed to be communicated.” This definition fits with the example given in the Seventh Edition regarding an attorney’s solicitations taking the form of radio and television ads; however, it does not fit the definition of the term “solicit” as used in Subsection 82.0651(c).

To be entitled to a private right of action, Subsection 82.0651(c) requires that the person “was solicited by” the violative conduct. TEX. GOV’T CODE § 82.0651(c) (emphasis added). This indicates the legislature’s intent that the person was actually affected by the solicitation; that is, that the solicitation was communicated to the person in an effort to gain business. See Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011) (stating that primary objective in interpreting statutes is to give effect to legislature’s intent).

*11 A private action under Subsection 82.0651(c) may be brought by a person who has been solicited by conduct violating Penal Code Subsections 38.12(a) or (b) or Disciplinary Rule 7.03.9 See TEX. GOV’T CODE § 82.0651(c). Because Subsection 82.0651(c) expressly incorporates Penal Code Section 38.12 and Disciplinary Rule 7.03 into its statutory construct, definitions given in these provisions may supply insight into the meaning that the legislature intended for “solicit” in Subsection 82.0651(c).

The definitional section of Penal Code Chapter 38 defines the phrase “solicit employment” for Penal Code Subsections 38.12(a) and (b), in relevant part, as follows:

“Solicit employment” means to communicate in person or by telephone with a prospective client or a member of the prospective client’s family concerning professional employment within the scope of a professional’s license, registration, or certification arising out of a particular occurrence or event, or series of occurrences or events, or concerning an existing problem of the prospective client within the scope of the professional’s license, registration, or certification, for the purpose of providing professional services to the prospective client, when neither the person receiving the communication nor anyone acting on that person’s behalf has requested the communication....

TEX. PENAL CODE § 38.01(11).

Disciplinary Rule 7.03, entitled “Prohibited Solicitations and Payments,” does not expressly define the word “solicit.” However, it describes prohibited solicitations, including “in-person contact,” telephonic contact, and electronic contact by attorneys or those acting on their behalf under certain prescribed circumstances. TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 7.03(a), (f). Similarly, reflecting the ordinary definition of what “solicit” and “solicitation” mean in the legal profession, Rule 7.3(a) of the ABA Model Rules of Professional Conduct, entitled “Solicitation of Clients,” provides the following definition:

“Solicitation” or “solicit” denotes a communication initiated by or on behalf of a lawyer or law firm that is directed to a specific person the lawyer knows or reasonably should know needs legal services in a particular matter and that offers to provide, or reasonably can be understood as offering to provide, legal services for that matter.

AM. BAR ASSOC. MODEL RULES OF PROF’L CONDUCT R. 7.03(a), https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_7_3_direct_contact_with_prospective_clients/ (last visited May 22, 2020).

Considering the statutory context in which it appears and the ordinary meaning assigned by the legal profession, we conclude that the phrase “solicited by” in Subsection 82.0651(c) should be construed to mean a person has experienced a prohibited communication directed toward him or her as a prospective client by or on behalf of an attorney in an effort to gain employment. Here, the unauthorized filing of the presentment forms was not a communication directed toward Appellants, and Appellants were not solicited by their filing. Thus, we hold that, as a matter of law, the filing of the presentment forms does not support Appellants’ claims brought under Subsection 82.0651(c).

3. Telephone Calls Ending in January 2013

On appeal, the other conduct relied on by Appellants to support their statutory barratry claims against the Watts Appellees and the Hilliard Appellees was the telephone calls made to Appellants by WGC, seeking to represent Appellants in the BP litigation. It is not disputed that, if proven, such conduct could be a violation of Subsection 82.0651(c) of the barratry statute. Solicitous telephone calls, as described in Appellants’ petition, violate both Penal Code Subsection 38.12(a)(2) and Disciplinary Rule 7.03. Instead, the parties dispute whether a claim based on the solicitous phone calls is barred by limitations. Appellants’ live petition, and their declarations offered as summary-judgment evidence, show that WGC solicited Appellants by telephone in 2012 through January 2013. The original plaintiff first filed suit in March 2016. Appellants’ pleadings were amended throughout 2016, adding plaintiffs and defendants.

*12 In its summary-judgment orders, the trial court determined that Appellants’ statutory-barratry claims based on a solicitation, such as the telephone calls, were barred by limitations. Supporting its ruling, the trial court determined that (1) the applicable statute of limitations for civil barratry was two years, (2) the discovery rule did not toll limitations, and (3) the class-action tolling doctrine did not apply to Appellants’ barratry claim against Mikal Watts and Watts Guerra, LLP. Appellants challenge each of these bases, and we address each in turn.

a. Applicable statute of limitations

No statute of limitations expressly refers to civil barratry. Appellants assert that the four-year statute of limitations applies because, under the residual statute of limitations, a four-year period applies to “[e]very action for which there is no express limitations period.” TEX. CIV. PRAC. & REM. CODE § 16.051. If the four-year statute of limitations applies, then Appellants’ barratry claim, based on the phone calls, are not time-barred. The last phone calls alleged by Appellants were made in January 2013. Appellants filed their barratry claims against all parties in 2016.

Appellees assert that the two-year statute of limitations governs Appellants’ barratry claims based on Section 16.003 of the Civil Practice and Remedies Code. Section 16.003 applies to suits “for trespass for injury to the estate or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal injury, forcible entry and detainer, and forcible detainer.” Id. § 16.003.

When no statute of limitations expressly refers to a cause of action, “courts look to analogous causes of action for which an express limitations period is available either by statute or by case law.” Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 518 (Tex. 1998). As mentioned, before the enactment of the civil barratry statute, Texas did not recognize a private cause of action for barratry in favor of an improperly solicited client. Neese, 479 S.W.3d at 378. Nor are we aware of an analogous statutory or common law cause of action, permitting a claim based on the act of soliciting business without additional wrongful conduct accompanying the act of solicitation.

“In general, torts developed from the common law action for ‘trespass,’ and a tort not expressly covered by a limitation provision nor expressly held by this court to be governed by a different provision would presumptively be a ‘trespass’ for limitations purposes.” Williams v. Khalaf, 802 S.W.2d 651, 654 (Tex. 1990). “[I]f a tort is not expressly covered by a statute of limitations, we presume the tort is a trespass for purposes of determining the statute of limitations and apply the two-year limitations period as per civil practice and remedies code section 16.003(a).” David L. Smith & Assocs., LLP v. Advanced Placement Team, Inc., 169 S.W.3d 816, 822–23 (Tex. App.—Dallas 2005, pet. denied); see Almazan v. United Servs. Auto. Assoc., 840 S.W.2d 776, 779–80 (Tex. App.—San Antonio 1992, writ denied) (applying Khalaf presumption regarding Section 16.003(a) to statutory tort based on wrongful dismissal for filing workers’ compensation claim).

As mentioned, civil barratry under Government Code Subsection 82.0651 is not covered by a statute of limitations, and the Supreme Court of Texas has not expressly held that limitations for civil barratry is governed by a different provision. Thus, if Appellants’ civil barratry claim is a tort, we presume the two-year statute of limitations applies. See Khalaf, 802 S.W.2d at 654.

*13 “Generally, breach of a duty created by contract gives rise to a contract claim, whereas breach of a duty imposed by operation of law gives rise to a tort claim.” Nghiem v. Sajib, 567 S.W.3d 718, 723–24 (Tex. 2019). “As one prominent authority has explained: ‘Tort obligations are in general obligations that are imposed by law—apart from and independent of promises made and therefore apart from the manifested intention of the parties—to avoid injury to others.’ ” Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991) (quoting W. KEETON, D. DOBBS, R. KEETON & D. OWEN, PROSSER AND KEETON ON THE LAW OF TORTS § 92 at 655 (5th ed. 1984)). Here, Appellants base their barratry claims on duties imposed by law under Government Code Subsection 82.0651(c), not on a breach of duty created by a contract. In fact, to recover under Subsection 82.0651(c), a plaintiff must show that he was “solicited by” prohibited conduct and “did not enter into a contract” as a result of that conduct. See TEX. GOV’T CODE § 82.0651(c).

To determine whether a claim sounds in tort or whether it sounds in contract, courts consider not only the source of the duty imposed, but also the nature of the relief sought. See JCW Elecs., Inc. v. Garza, 257 S.W.3d 701, 705 (Tex. 2008) (stating “precise nature of the claim is ordinarily identified by examining the damages alleged”). When the damages are purely economic, the claim sounds in contract. Id.

Here, the relief Appellants requested for their barratry claim includes non-economic damages. The barratry statute permits a person who prevails on a Subsection 82.0651(c) claim to recover “a penalty in the amount of $10,000” and “actual damages caused by the prohibited conduct.” TEX. GOV’T CODE § 82.0651(d). In addition to statutory penalties, Appellants requested non-economic mental anguish damages for Appellees’ alleged violations of Subsection 82.0651(c). Mental anguish damages are generally tort damages. See Delgado v. Methodist Hosp., 936 S.W.2d 479, 486 (Tex. App.—Houston [14th Dist.] 1996, no writ) (stating “mental anguish damages are not recoverable in any tort action based on rights growing out of the breach of a contract”).

Therefore, based on the source of the duty imposed and the type of damages permitted and sought, we hold that a civil barratry claim under Subsection 82.0651(c) is a tort claim. Because no statute of limitations expressly covers it, we presume a Subsection 82.0651(c) claim is a “trespass” for limitations purposes, and the two-year statute of limitations applies. See TEX. CIV. PRAC. & REM. CODE § 16.003.

Appellants cite Neese to support their assertion that the four-year statute of limitations applies to their claims under Subsection 82.0651(c). 479 S.W.3d at 383. In Neese, the court held that the four-year statute of limitations applies to claims under Government Code Subsection 82.065(b). Id. That subsection provides that any contract for legal services “procured as a result of” violations of prohibited barratry “is voidable” by the client. TEX. GOV’T CODE § 82.065(b). In short, Subsection 82.065(b) allows a person who enters into an employment relationship with an attorney, as a result of barratry, to sue for rescission of the unlawful contract. See id.

Although a claim under Subsection 82.065(b) is imposed by operation of law, absent a contract, the claim does not arise. Cf. Nghiem, 567 S.W.3d at 725 (explaining that, although implied warranty is imposed by operation of law, obligation still arises from contract). And the remedy provided by Subsection 82.065(b), rescission, is a contract remedy, not a tort remedy. See Humphrey v. Camelot Ret. Cmty., 893 S.W.2d 55, 59 (Tex. App.—Corpus Christi 1994, no writ) (stating that rescission is an equitable remedy that operates to set aside a contract). Thus, Neese is consistent with our decision that the two-year statute of limitations applies to Appellants’ Subsection 82.0651(c) barratry claims.

b. Discovery rule

*14 In the trial court, Appellants pleaded that the discovery rule tolled the accrual of the statute of limitations on their barratry claim. The trial court expressly ruled that the discovery rule did not apply. On appeal, Appellants assert that the trial court erred when it granted summary judgment based on limitations because the discovery rule applied to their barratry claim.

A defendant moving for summary judgment on the affirmative defense of limitations bears the burden of conclusively establishing the elements of that defense. Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018) (citing KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999)). This includes conclusively establishing when the cause of action accrued. Id. at 833–34.

“Causes of action accrue and statutes of limitations begin to run when facts come into existence that authorize a claimant to seek a judicial remedy.” Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011). That is, “[n]ormally a cause of action accrues when a wrongful act causes some legal injury.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) (citing S.V. v. R. V., 933 S.W.2d 1, 4 (Tex. 1996)). But, when a plaintiff asserts that the discovery rule tolls accrual, the defendant moving for summary judgment on limitations bears the additional burden of negating the rule. Pasko, 544 S.W.3d at 834. Defendants may accomplish this by either conclusively establishing (1) that the discovery rule does not apply, or (2) if the rule applies, that the summary-judgment evidence negates it. Id.

The supreme court has “restricted the discovery rule to exceptional cases to avoid defeating the purposes behind the limitations statutes.” Via Net, 211 S.W.3d at 313; see S.V., 933 S.W.2d at 25 (noting that application of discovery rule “should be few and narrowly drawn”). When applicable, the discovery rule defers accrual until the plaintiff knew or should have known of the facts giving rise to the cause of action. S.V., 933 S.W.2d at 4. The discovery rule applies only when the nature of the injury is inherently undiscoverable, and the evidence of injury is objectively verifiable. Id. at 6. “These two elements attempt to strike a balance between the policy underlying statutes of limitations (barring stale claims) and the objective of avoiding an unjust result (barring claims that could not be brought within the limitations period).” Archer v. Tregellas, 566 S.W.3d 281, 290 (Tex. 2018).

In their summary-judgment motions, Appellees asserted that the discovery rule does not apply to barratry claims brought under Subsection 82.0651(c) because the legal injury that a plaintiff suffers under that provision is not inherently undiscoverable. “An injury is inherently undiscoverable if it is, by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence.” Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex. 2001). “This legal question is decided on a categorical rather than case-specific basis; the focus is on whether a type of injury rather than a particular injury was discoverable.” Via Net, 211 S.W.3d at 314.

The purpose of the civil barratry statute is “to protect those in need of legal services against unethical, unlawful solicitation and to provide efficient and economical procedures to secure that protection.” TEX. GOV’T CODE § 82.0651(e). Considering the purpose of the statute, a person has a right to be free of solicitation that violates the specified provisions of Penal Code Section 38.12 and Disciplinary Rule 7.03. It follows, then, that a plaintiff suffers a “legal injury” under Subsection 82.0651(c) when he “is solicited by conduct” violating those specified provisions. See TEX. GOV’T CODE § 82.0651(c), (e); Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex. 1997) (defining “legal injury” as “an injury giving cause of action by reason of its being an invasion of a plaintiff’s right”).

*15 Appellants do not dispute that a plaintiff knows when he has been solicited by an attorney’s communication prohibited by the specified provisions, such as a telephone call.10 And the summary-judgment evidence, here, shows that Appellants knew they were being solicitated by WGC’s phone calls at the time they were received.

Instead, Appellants argue that a putative plaintiff who receives a prohibited solicitation cannot discover his legal injury because he will not know that the solicitation violated the law. Appellants imply that the accrual of a barratry claim under Subsection 82.0651(c) should be deferred until a plaintiff learns that the law prohibited the attorney’s conduct. However, we cannot agree that an injury is inherently undiscoverable when a plaintiff knows enough facts to file suit but fails to do so only because he is not knowledgeable about the law. As stated, a cause of action accrues when facts come into existence that authorize a party to seek a judicial remedy. See Emerald Oil, 348 S.W.3d at 202. By the nature of the claim, a putative plaintiff knows about the facts giving rise to a claim under Subsection 82.0651(c) at the time they occur; that is, he knows about the solicitous conduct that the statute makes actionable. See id.; see also TEX. GOV’T CODE § 82.0651(c), (d); cf. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002) (“[B]reach of contract claim accrues when the contract is breached”).

To support application of the discovery rule, Appellants analogize their barratry cause of action to a legal-malpractice claim. They assert that barratry claims are inherently undiscoverable because “it is unlikely that a victim of barratry would know they had been wrongfully solicited when it occurred.” They contend that, “[a]s with legal malpractice, victims of barratry typically do not appreciate they have been injured when the injury occurs.” They assert that “they lacked the legal acumen to understand, that they had been ‘wrongfully solicited’ and injured because of [the phone calls].”

In making their argument, Appellants rely on Willis v. Maverick, 760 S.W.2d 642 (Tex. 1988). In Willis and cases following it, the Supreme Court of Texas held that, because the discovery rule applies to legal-malpractice claims, accrual is deferred until the client discovers, or should discover, the wrongful act and injury. See id. at 646; Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998). Appellants point to the Willis court’s statement that “it is unrealistic to expect a layman client to have sufficient legal acumen to perceive an injury at the time of the negligent act or omission of his attorney.” 760 S.W.2d at 645 (internal quotation marks omitted.)

After Willis, the supreme court made clear that the fiduciary duty owed by an attorney to his client is integral to the application of the discovery rule in legal-malpractice cases. In S.V. v. R.V., the court recognized that it had “twice held a fiduciary’s misconduct to be inherently undiscoverable,” including in Willis. 933 S.W.2d at 8 (citing Willis, 760 S.W.2d at 645 and Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377, 394 (1945) (trustee as fiduciary)). The court then explained, “The reason underlying both decisions is that a person to whom a fiduciary duty is owed is either unable to inquire into the fiduciary’s actions or unaware of the need to do so.” Id. (citing, inter alia, Willis, 760 S.W.2d at 645 (“Facts which might ordinarily require investigation likely may not excite suspicion where a fiduciary relationship is involved.”)).

*16 Unlike a legal-malpractice claim, a civil barratry claim under Subsection 82.0651(c) involves no fiduciary or confidential relationship. To the contrary, a plaintiff can file a Subsection 82.0651(c) claim only if he did not enter into an attorney-client contract as a result of the prohibited solicitation. See TEX. GOV’T CODE § 82.0651(c). Therefore, the reasoning underlying the application of the discovery rule to legal-malpractice claims does not apply to Subsection 82.0651(c) barratry claims.11

In sum, Appellees conclusively showed that the discovery rule did not toll limitations on Appellants’ barratry claims because a claim under Subsection 82.0651(c) does not involve the type of injury that is inherently undiscoverable. It is the plaintiff’s knowledge of the conduct constituting a prohibited solicitation, and not his knowledge of the law, that triggers accrual of the claim. Accordingly, a plaintiff’s Subsection 82.0651(c) barratry claim accrues when he is solicited by the conduct prohibited in that provision. See Emerald Oil, 348 S.W.3d at 202; see also TEX. GOV’T CODE § 82.0651(c). Here, Appellants’ barratry claims accrued when Appellants were solicited by WGC’s phone calls, occurring at the latest in January 2013.

c. Class-action tolling rule

Appellants also challenge the summary judgment by asserting that the class-action tolling rule suspended the statute of limitations on their barratry claims against Mikal Watts and his firm, Watts Guerra, LLP, the only two defendants against whom the class action in Bexar County was filed. Appellants assert that Mikal Watts and Watts Guerra, LLP did not meet their summary-judgment burden to conclusively negate the application of the class-action tolling rule. See Clark v. ConocoPhillips Co., 465 S.W.3d 720, 724 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (recognizing that defendant must “conclusively negate any relevant tolling doctrines the plaintiff raised in the trial court” in determining application of class-action tolling rule in summary-judgment context). We agree with Appellants.

*17 The class-action tolling rule was articulated by the United States Supreme Court in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974). American Pipe and its progeny provide that the filing of a class action tolls the applicable statutes of limitations as to all putative class members until class certification is denied or until the individual ceases to be a member of the class. Id.; Crown, Cork, & Seal Co. v. Parker, 462 U.S. 345, 349, 354, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983) (holding filing of class action operates to toll limitations for putative class members who file individual actions after class certification is denied); see also see Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 176 n.13, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974) (indicating that tolling continues after class action is certified until a putative class member opts out of class). Texas courts have utilized the class-action tolling rule. See Asplundh Tree Expert Co. v. Abshire, 517 S.W.3d 320, 332–34 (Tex. App.—Austin 2017, no pet.) (applying American Pipe tolling rule and identifying numerous intermediate Texas courts of appeals’ cases applying class-action tolling rule).

Appellants assert that the trial court erred in granting summary judgment on their barratry claim against Mikal Watts and Watts Guerra, LLP based on limitations because the class action filed in Bexar County in May 2014 against Watts and his firm tolled limitations as to those two defendants. On August 29, 2014, the class action was certified to include “[a]ll persons or entities who [Watts and Watts Guerra, LLP] claimed to represent in the BP Litigation but who [Watts and Watts Guerra, LLP] did not actually represent in the BP Litigation.”

The parties do no dispute that Appellants are putative members of the certified class. Appellants contend that, even accepting the Watts Appellees’ position that the barratry claim accrued in January 2013, the statute of limitations against Watts and Watts Guerra, LLP was tolled less than two years later in May 2014 on the filing of the class action. When Appellants filed the instant suit against Mikal Watts and Watts Guerra, LLP in 2016, the class action remained pending, and Appellants assert that the statute of limitations remained tolled.

At the time Watts and Watts Guerra, LLP filed their motion for summary judgment based on limitations, Appellants had not pleaded the class-action tolling rule to avoid application of the defendants’ limitations defense. Cf. Via Net, 211 S.W.3d at 313 (“[A] defendant’s motion for summary judgment based on limitations need not negate the discovery rule unless the plaintiff has pleaded it.”); see Wyeth-Ayerst Lab. Co. v. Medrano, 28 S.W.3d 87, 95 (Tex. App.—Texarkana 2000, no pet.) (concluding appellant waived reliance on class-action tolling rule because not pleaded). Nonetheless, Appellants raised the class-action tolling rule in their summary judgment response, asserting that the statute of limitations had been tolled in May 2014 when the class action was filed. At that point, Watts and Watts Guerra, LLP did not object that Appellants had not pleaded the class-action tolling rule; nor did they respond on the merits to Appellants’ assertion in their response that the filing of the Bexar County class action had suspended the statute of limitations. See Via Net, 211 S.W.3d at 313 (stating that, when plaintiff asserts discovery rule for first time in his summary-judgment response, defendant has two choices: he can object that it had not been pleaded, or he can respond on the merits and try issue by consent).

Because Appellants raised the class-action tolling rule in their response to the defendants’ motion for summary judgment on barratry without objection from Watts and Watts Guerra, LLP, Watts and his firm had a duty to conclusively negate the application of the tolling rule.12 See Diaz v. Westphal, 941 S.W.2d 96, 98 (Tex. 1997) (“[T]he defendant must conclusively negate any relevant tolling doctrines the plaintiff asserted in the trial court.”); Bradshaw v. Bonilla, No. 13-08-00595-CV, 2010 WL 335676, at *9 (Tex. App.—Corpus Christi Jan. 28, 2010, pet. denied) (mem. op.) (holding that defendant had burden to negate discovery rule not pleaded when raised in plaintiff’s summary-judgment response and defendant did not object to lack of pleading).

*18 In short, Watts and Watts Guerra, LLP failed to address the class-action tolling rule or to argue that it did not apply after it was raised by Appellants and before the trial court granted summary judgment in their favor on the barratry claim based on limitations.13 By not offering responsive argument or evidence, Watts and his firm failed to meet their burden to conclusively negate application of the class-action tolling rule. See Bradshaw, 2010 WL 335676, at *9 (reversing summary judgment on fraud claim based on limitations because defendant did not object or respond to plaintiff’s reliance on discovery rule in her summary-judgment response and thus had failed to conclusively negate application of discovery rule); Proctor v. White, 172 S.W.3d 649, 652 (Tex. App.—Eastland 2005, no pet.) (reversing summary judgment when defendant did not object or respond on merits after plaintiff raised discovery rule in response).

On appeal, Watts and Watts Guerra, LLP assert that Appellants forfeited their right to raise the class-action tolling rule in the trial court because they filed the instant suit while the Bexar County class action was still pending without first electing to opt-out of the class action.14 However, their argument on appeal addressing the class-action tolling rule cannot provide a basis for affirming the summary judgment. “[S]ummary judgments must stand or fall on the grounds raised therein; we cannot consider grounds raised for the first time on appeal as a basis for affirming or reversing the trial court’s judgment.” Fleming & Assocs., L.L.P. v. Barton, 425 S.W.3d 560, 572 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (citing McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993)).

*19 We hold that Mikal Watts and Watts Guerra, LLP failed to meet their burden to negate the application of the class-action tolling rule as an exception to limitations on Appellants’ barratry claim. The trial court erred in granting summary judgment in favor of Mikal Watts and Watts Guerra, LLP on Appellants’ barratry claim.

4. Conclusion Regarding Barratry Claims

The trial court properly determined that, as a matter of law, Appellants’ Subsection 82.0651(c) barratry claims could not be premised on the filing of the presentment forms. And the trial court correctly ruled that the two-year-statute of limitations applies to barratry claims under that subsection.

Appellees met their summary-judgment burden to show that the barratry claims accrued no later than January 2013, when Appellants were last solicited by telephone. They also conclusively showed that the discovery rule did not apply to those claims. However, Mikal Watts and his firm, Watts Guerra, LLP, failed to conclusively negate the application of the class-action tolling rule to Appellants’ barratry claims.15 Therefore, all Appellees, except Watts and his firm, met their summary-judgment burden to show that Appellants’ barratry claims, filed more than three years after the cause of action accrued, were barred by limitations as a matter of law.

We hold that the trial court properly granted summary judgment on Appellants’ Subsection 82.0651(c) barratry claims in favor of Appellees, except the trial court erred in granting summary judgment in favor of Mikal Watts and Watts Guerra, LLP on that claim. We overrule Appellants’ first issue to the extent that the trial court properly granted summary judgment on the barratry claims, and we sustain the issue to the extent that the trial court erred in granting summary in favor of Mikal Watts and Watts Guerra, LLP.

C. Unjust Enrichment, Invasion of Privacy, and Derivative Claims

In their second issue, Appellants contend that the trial court erred by granting summary judgment, based on limitations, on their claims for invasion of privacy by misappropriation and on their derivative claims of conspiracy and aiding and abetting. In their third issue, Appellants assert that the trial court improperly granted summary judgment on their claims for unjust enrichment and restitution.

1. Appellants Not Entitled to Common Benefit Attorney’s Fees

Appellants base their claims (1) for invasion of privacy by misappropriating their names and likenesses and (2) for “unjust enrichment/restitution” on the award of over $18 million16 in common benefit attorney’s fees paid to Mikal Watts and his firm for the legal work they did on the Plaintiffs’ Steering Commission (as previously abbreviated, “the PSC”) in the federal multi-district litigation. Appellants alleged that, in his application to the PSC, Watts misrepresented to the federal court overseeing the multi-district litigation that Watts’ firm “represented over 40,000 plaintiffs,” when that was not true. Appellants asserted that Watts attained his position on the PSC “by misappropriating the names and likenesses of approximately 44,510 Vietnamese Americans,” including those of Appellants. Appellants asserted that the $18 million award of the common benefit attorney’s fees unjustly enriched the Watts Appellees because they had wrongfully obtained the award by Watts’s appointment to the PSC, and it would be unconscionable to allow them to keep it.

*20 Appellants claimed that they were entitled to the common benefit attorney’s fees as restitution for their claim for unjust enrichment and invasion of privacy by misappropriation. For these claims, Appellants sought imposition of “the equitable remedy of a constructive trust to recover” the $18 million in common benefit attorney’s fees because the fees had been “obtained through unjust enrichment by misappropriating [their] names and likenesses.”

In their motion for summary judgment, the Watts Appellees asserted that Appellants were not entitled to recover the $18 million in attorney’s fees because Appellants were not the source of the fees paid to the Watts Appellees. Rather, BP and other defendants in the multi-district litigation paid the fees. The trial court agreed with the Watts Appellees, ruling in its summary-judgment order as follows:

The problem with the Plaintiffs’ unjust enrichment/restitution claim has always been that if the Watts Defendants were unjustly enriched, it was not at Plaintiffs’ expense. For Plaintiffs to recover for unjust enrichment, that enrichment must have been at the Plaintiffs’ expense. The principle of seeking an equitable remedy such as disgorgement or loss of Watts’ fees may have been appropriate given the Watts Defendants’ use of Plaintiffs’ names and identities, but such a remedy would be to deny the underlying claim for fees, or to refund those fees to BP which paid them. There is no basis for the Plaintiffs being the beneficiaries of that disgorgement under an unjust enrichment theory.

The trial court acknowledged that Appellants were arguing that “Mr. Watts never would have been appointed to [the PSC] had he not stolen their identities” and that “the expense to Plaintiffs [Appellants] was the loss of their identities.” The trial court stated that the evidence did not indicate whether Watts would have been have appointed to the PSC without having misappropriated Appellants’ identities. The trial court noted that Appellants did not claim that Watts and his firm did not do the work on the PSC for which they were paid $18 million. The trial court stated that what the record showed “about the BP litigation ... is that Watts was on the committee, worked for the benefit of the parties in that case, and was paid.”

We agree with the Watts Appellees that the trial court’s grant of summary judgment on the unjust enrichment and restitution claim squares with Texas law and the summary-judgment record.

Recovery for unjust enrichment arises from the equitable principle that a person receiving benefits, which were unjust for him to retain, should make restitution. Villarreal v. Grant Geophysical, Inc., 136 S.W.3d 265, 270 (Tex. App.—San Antonio 2004, pet. denied). “To recover for unjust enrichment, a plaintiff must show that the defendant has obtained a benefit from her by fraud, duress, or the taking of an undue advantage.” M & E Endeavours LLC v. Cintex Wireless LLC, No. 01-15-00234-CV, 2016 WL 1590642, at *3 (Tex. App.—Houston [1st Dist.] Apr. 19, 2016, no pet.) (mem. op.) (citing Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992)). It follows, then, that a plaintiff seeking restitution from an unjustly enriched defendant must show that she is the source of the alleged improper benefit rather than having only a remote or attenuated connection to it. Cf. Wilson v. Cinemark Corp., 858 S.W.2d 645, 648 (Tex. App.—Fort Worth 1993, no writ) (holding summary judgment proper on claim for unjust enrichment when plaintiff failed to show defendant theater received improper benefit from its patrons parking in plaintiff’s parking lot); Tex. Carpenters Health Benefit Fund v. Philip Morris, Inc., 21 F. Supp. 2d 664, 676 (E.D. Tex. 1998) (dismissing claim of unjust enrichment when alleged benefit was too indirect, remote and speculative); see also Nationscredit Corp. v. CSSI, Support Grp., Inc., No. 05-99-01612-CV, 2001 WL 200147, at *6 (Tex. App.—Dallas, 2001, no pet.) (not designated for publication) (“Subsumed in this holding of entitlement [to restitution] is the principle that the claimant seeking restitution must be the source of the benefit to the unjustly enriched party.... The remedy of restitution necessarily is available only to the party who provided the benefit. To conclude otherwise would provide a windfall to any other claimant.”).

*21 Here, the summary-judgment record shows that Appellants’ connection to the benefit for which they seek restitution—the $18 million in common benefit attorney’s fees—was too attenuated to support recovery under a claim for unjust enrichment and restitution. As part of their summary-judgment evidence, the Watts Appellees offered the written recommendation of the special master appointed by the federal court in the multi-district litigation to evaluate the amount of attorney’s fees each law firm assigned to the PSC should receive for its work. The special master’s written recommendation, filed in October 2017, detailed the history of the PSC and described the basis for his recommendation. The special master indicated that the federal court had appointed attorneys to the PSC “to aid in and manage the prosecution of the MDL” for the common benefit of the plaintiffs at the beginning of the multi-district litigation in 2010. Among those appointed were Mikal Watts and his firm.

The special master’s recommendation described the type of work performed by the PSC for the common benefit of the plaintiffs’ group. The recommendation stated that the work of the plaintiffs’ counsel “resulted in settlements worth billions of dollars” and that the federal court had concluded that PSC counsel had “earned compensation for their efforts on behalf of the common benefit.” As part of the settlements with the BP defendants, nearly $700 million was allocated to pay the PSC counsel for their work.

In his recommendation, the special master described the methodology that he applied to determine how much in attorney’s fees each firm would receive for its work on the PSC. His recommendation discussed each firm and its work separately.

The special master stated that Watts’s firm had “devoted 18,704.97 approved hours toward the common benefit.” The special master indicated that, based on the 18,704.97 hours of “approved work” performed by Watts’s firm, he recommended that the firm be paid “$18,290,494.18 for common benefit fee” and $141,000 for expenses. Appellants allege in their Eighth Amended Petition that the federal court “entered an order” that any objections to the special master’s recommendations be filed no later than October 20, 2017. After no objections were filed, the Watts Appellees received the attorney’s fees and expenses recommended by the special master.

Appellants contend that, because their identities were used to help secure a position for Watts on the PSC, they are entitled to restitution of the attorney’s fees by awarding them a constructive trust over the funds.17 While there may appear to be some inequity in permitting the Watts Appellees to retain the funds, we are mindful that restitution based on the theory of unjust enrichment is not a proper remedy “merely because it might appear expedient or generally fair that some recompense be afforded for an unfortunate loss to the claimant, or because the benefits to the person sought to be charged amount to a windfall.” Heldenfels Bros., Inc., 832 S.W.2d at 42 (internal quotation marks omitted).

The Watts Appellees’ summary-judgment evidence demonstrated that the $18 million in attorney’s fees paid by the BP defendants to the Watts Appellees were based on the amount and quality of legal work they performed on the PSC for the common benefit of the plaintiffs in the multi-district litigation. Any benefit derived from the use of the identities of Appellants—who were 439 individuals out of 44,000 claimants—to secure Watts’s appointment to the PSC was too speculative to calculate after Watts’s firm performed nearly 19,000 hours of legal work over many years for the PSC and the award of fees was expressly based on that work. The greater inequity would be to award the $18 million common benefit attorney’s fees to Appellants on such an attenuated basis. See id.; see also RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 44(3)(b)–(c) (2011) (providing that restitution for consciously interfering with claimant’s legally protected interests will be limited or denied “to the extent it would result in an inappropriate windfall to the claimant, or would otherwise be inequitable in a particular case” or “if the benefit derived from the interference cannot be adequately measured”).

*22 We hold that the trial court properly granted summary judgment on Appellants’ claims for unjust enrichment and restitution. Accordingly, we overrule their third issue.

2. Summary Judgment on Invasion of Privacy: Harmless Error

The trial court granted summary judgment on Appellants’ claim for invasion of privacy by misappropriation of name or likeness based on limitations. Appellants challenge that ruling in their second issue. However, even if we were to conclude that the trial court erred in granting summary judgment on that issue, any error was harmless. See In re K.K.W., No. 05-16-00795-CV, 2018 WL 3968475, at *9 (Tex. App.—Dallas Aug. 20, 2018, pet. denied) (mem. op.) (affirming summary judgment on constructive fraud claim after holding that trial court erred in granting summary judgment because appellate court’s holdings on other issues in appeal negated appellant’s constructive fraud, rendering error in granting summary judgment harmless).

“Erroneous rulings require reversal only if a review of the record reveals the error was harmful.” See Sw. Energy Prod. Co. v. Berry–Helfand, 491 S.W.3d 699, 728 (Tex. 2016). “It is the complaining party’s burden to show harm on appeal.” Bowser v. Craig Ranch Emergency Hosp. L.L.C., No. 05-16-00639-CV, 2018 WL 316880, at *2 (Tex. App.—Dallas Jan. 8, 2018, no pet.) (mem. op.) (citing Ford Motor Co. v. Castillo, 279 S.W.3d 656, 667 (Tex. 2009)).

The harmless error rule states that, before reversing a judgment because of an error of law, the reviewing court must find that the error amounted to such a denial of the appellant’s rights as was reasonably calculated to cause and probably did cause “the rendition of an improper judgment,” or that the error “probably prevented the appellant from properly presenting the case [on appeal].”

G & H Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (quoting TEX. R. APP. P. 44.1(a)).

The harmless error rule applies to all errors, including erroneously granting summary judgment or otherwise erroneously disposing of a claim. See id. at 298 (holding that, although trial court errs in granting summary judgment on claim not addressed in summary-judgment motion, error is harmless when unaddressed claim “is precluded as a matter of law by other grounds raised in the case”); Progressive Cty. Mut. Ins. Co. v. Boyd, 177 S.W.3d 919, 921 (Tex. 2005) (concluding that any error committed by granting summary judgment on insurance bad-faith and extra-contractual claims was harmless because jury’s finding in subsequent proceeding negated coverage, which was prerequisite for asserting bad-faith and extra-contractual claims); Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 82 (Tex. 2003) (holding that directed verdict granted during first witness’s testimony was “irregular” but harmless because plaintiffs had “affirmatively limited their claim to damages they could not recover as a matter of law”). In G & H Towing, the supreme court favorably quoted a practice treatise’s statement of the harmless error exception for summary judgments as follows: “If the defendant has conclusively disproved an ultimate fact or element which is common to all causes of action alleged, or the unaddressed causes of action are derivative of the addressed cause of action, the summary judgment may be affirmed.” 347 S.W.3d at 297 (citing Timothy Patton, SUMMARY JUDGMENTS IN TEXAS: PRACTICE, PROCEDURE AND REVIEW § 3.06[3] at 3–20 (3d ed. 2010)).

*23 Here, Appellants’ invasion of privacy by misappropriation claim, like their unjust enrichment and restitution claim, arises out of the Watts Appellees’ receipt of the $18 million in common benefit attorney’s fees for their work on the PSC. As pleaded, Appellants’ invasion of privacy by misappropriation claim overlaps and is intertwined with their unjust enrichment and restitution claim.

In support of both claims, Appellants allege that the Watts Defendants misappropriated Appellants’ identities by using them to attain a position on the PSC. Appellants claim that, by attaining a position on the PSC, Watts and his firm were then able to receive the common benefit attorney’s fees, which unjustly enriched them. Appellants seek restitution for their invasion of privacy by misappropriation claim in the form of “the equitable remedy of a constructive trust to recover any attorney’s fees or expenses which the Watts Defendants obtained through unjust enrichment by misappropriating Plaintiffs’ name[s] and likeness[es].” See KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 87 (Tex. 2015) (“A constructive trust is an equitable, court-created remedy designed to prevent unjust enrichment.”).

However, we have already determined in affirming the trial court’s grant of summary judgment on the unjust enrichment and restitution claim that Appellants are not entitled to recover the common benefits attorney’s fees paid to the Watts Appellees. As a result, any error in granting summary judgment on the invasion of privacy by misappropriation claim based on limitations would be harmless error.18 See In re K.K.W., 2018 WL 3968475, at *9. Accordingly, we hold that, even if we assume that the trial court erroneously granted summary judgment on Appellants’ invasion of privacy claim based on limitations, the error was harmless. See TEX. R. APP. P. 44.1(a).

We overrule Appellants’ second issue to the extent that Appellants challenge the trial court’s summary judgment on their invasion-of-privacy-by-misappropriation claim.

3. Derivative Claims Fail if Underlying Tort Fails

Appellants also challenge the trial court’s summary judgment on their conspiracy and aiding and abetting claims based on limitations.19 In their Eighth Amended Petition, Appellants alleged conspiracy and aiding and abetting in conjunction with each of the independent torts they asserted.

*24 “Conspiracy is a derivative tort because ‘a defendant’s liability for conspiracy depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.’ ” W. Fork Advisors, LLC v. SunGard Consulting Servs., LLC, 437 S.W.3d 917, 920 (Tex. App.—Dallas 2014, pet. denied) (quoting Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996)); see Agar Corp. v. Electro Circuits Int’l, LLC, 580 S.W.3d 136, 142–43 (Tex. 2019) (recognizing conspiracy as theory of derivative liability, not an independent tort). Because there “can be no independent liability for civil conspiracy,” a plaintiff does not have a viable conspiracy claim if the trial court correctly grants summary judgment on the underlying tort. Spencer & Assocs., P.C. v. Harper, No. 01-18-00314-CV, ––– S.W.3d ––––, ––––, 2019 WL 3558996, at *11 (Tex. App.—Houston [1st Dist.]. Aug. 6, 2019, no pet.) (quoting W. Fork Advisors, LLC, 437 S.W.3d at 920). In addition, because it is a derivative claim, civil conspiracy takes the limitations period of the underlying tort that is the object of the conspiracy. Agar Corp., 580 S.W.3d at 148. And, because aiding and abetting is a derivative tort—to the extent it is an actionable tort in Texas—the trial court’s proper grant of summary judgment on the underlying tort serves to grant summary judgment on the aiding and abetting claim as well. See W. Fork Advisors, 437 S.W.3d at 921 (citing Ernst & Young, L.L.P. v. Pac Mut. Life Ins. Co., 51 S.W.3d 573, 583 (Tex. 2001)). Therefore, we hold that the trial court properly granted summary judgment on Appellants’ derivative conspiracy and aiding and abetting claims, except the trial court erred in granting summary judgment on those claims as they relate to Appellants’ Subsection 82.0651(c) barratry claim against Mikal Watts and Watts Guerra, LLP based on the class-action tolling rule as discussed above.

We overrule Appellants’ second issue to the extent it challenges the summary judgment on their conspiracy and aiding and abetting claims, except we sustain the issue with respect to the conspiracy and aiding and abetting claims as they derive from Appellants’ Subsection 82.0651(c) barratry claim against Mikal Watts and Watts Guerra, LLP.

D. Challenge to Summary-Judgment Evidence

In their fourth issue, Appellants challenge the trial court’s denial of their objections to Watts’s affidavit and documents attached to his affidavit, offered in support of the Watts Appellees’ motions for summary judgment on Appellants’ claims for unjust enrichment and restitution and invasion of privacy by misappropriation.

We review a trial court’s decision to admit or exclude summary-judgment evidence for an abuse of discretion. Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 673, 678 (Tex. 2017). Even if a trial court abuses its discretion, we will only reverse if the error probably caused the rendition of an improper judgment. TEX. R. APP. P. 44.1(a)(1); see Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718, 723 (Tex. 2003).

In affirming the summary judgment on Appellants’ claims for unjust enrichment and restitution, we relied on the statements in Appellants’ live petition and on the special master’s report offered by the Watts Appellees. The special master’s recommendation was attached to and authenticated by Mikal Watts’s affidavit.

Appellants objected to various aspects of Watts’s affidavit. As it relates to the special master’s recommendation, Appellants objected that “Watts may not act as both an advocate and provide summary judgment testimony on contested issues of fact.” See Aghili v. Banks, 63 S.W.3d 812, 818 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (concluding trial court abused its discretion by allowing lawyer for defendant to testify about relevant facts by affidavit in response to summary judgment motion because “a lawyer who represents clients as an advocate before a court should be incompetent to provide evidence in the matter unless one of the exceptions to Rule [of Disciplinary Procedure] 3.08 applies”).

Appellants asserted that Watts’s status as counsel precluded him from authenticating documents attached to his affidavit, including the special master’s recommendation. However, the record shows that the special master’s written recommendation was not a “contested fact.” Appellants had already offered the special master’s written recommendation in support of their response to an earlier-filed motion for summary judgment. Given that the special master’s written recommendation was already introduced into the record by Appellants in support of their own summary-judgment response, the special master’s report was not inadmissible on the basis asserted by Appellants on appeal. And, even if the trial court abused its discretion in overruling Appellants’ objection to Watts’s authentication of the special master’s report, that error probably did not cause the rendition of an improper judgment; that is, it would be harmless error because it had previously been relied on by Appellants.20 See TEX. R. APP. P. 44.1(a)(1).

*25 We overrule Appellants’ fourth issue.

Conclusion

We reverse the portions of the trial court’s judgment granting summary judgment in favor of Mikal Watts and his firm, Watts Guerra, LLP, on Appellants’ claims for Subsection 82.0651(c) barratry and the derivative claims of conspiracy and aiding and abetting that relate to the barratry claim. We remand those claims—that is, Appellants’ claims against Mikal Watts and Watts Guerra, LLP for Subsection 82.0651(c) barratry and the derivative claims of conspiracy and aiding and abetting that relate to the barratry claim—to the trial court for further proceedings consistent with our opinion. We affirm the remainder of the trial court’s judgment.

APPENDIX





Footnotes

1 Appellants’ names are listed in an appendix to this opinion as stated in a list provided by Appellants’ counsel.
2 These were Appellants Dung Van Nguyen, Nhat Van Nguyen, Joseph Nguyen, Tam V. Le, and Theresa T. Nguyen.
3 Craft left Watts Guerra & Craft, LLP in March 2013, and the name changed to Watts Guerra, LLP. For ease of reference, we will generally refer to the firm as “WGC.” But, when necessary for accuracy, we will refer specifically to Watts Guerra, LLP.
4 Hilliard’s and Cracken’s law firms were also named as defendants.
5 In some documents in the record, the number of purported claimants is identified as over 40,000 and in others it is listed as 44,000. For consistency purposes, we will generally refer to the number of purported claimants as 40,000.
6 Appellants also asserted that limitations were tolled based on fraudulent concealment and the continuing-tort doctrine. The trial court rejected these defenses to limitations, but Appellants do not challenge those rulings on appeal.
7 The 2011 amendments to Section 82.065 are not pertinent to this appeal.
8 The 2013 amendments took effect September 1, 2013. See Act of May 15, 2013, 83rd Leg., ch. 315, § 5, 2013 Tex. Gen. Laws 1073, 1074. Section 82.0651 has not been amended since 2013.
9 These are the provisions cited by Appellants in their live pleading as supporting their barratry claim.
10 Appellants assert that a plaintiff may not know that an unauthorized claim has been filed on his behalf. As discussed, the unauthorized filing of a claim does not support a cause of action under Subsection 82.0651(c) because it is not a solicitation.
11 Appellants cite Chambers v. Green Tree Servicing LLC, pointing out that, there, the federal court applied the discovery rule to a statutory claim under the Texas Consumer Protection Act for unlawful telephonic debt collection practices. No. 3:15-cv-1879-M-BN, 2016 WL 8672775, *8 (N.D. Tex. 2016). However, in Chambers, the plaintiff argued for application of the discovery rule based on fraudulent concealment of information, an allegation not made here on appeal relating to the telephone solicitations. See id. Appellants also cite two federal circuit court cases in which the courts “applied the discovery rule” to claims under the Fair Debt Collection Practices Act: (1) Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 940 (9th Cir. 2009) and (2) Lembach v. Bierman, 528 F. App’x 297, 302 (4th Cir. 2013). The second case, Lembach, relied on the holding of the first case, Mangum. 528 F. App’x at 302. After Appellants filed their briefing here, the United States Supreme Court abrogated the Ninth’s Circuit ruling in Mangum by rejecting the application of the discovery rule (when not predicated on fraud) to FDCPA claims. Rotkiske v. Klemm, ––– U.S. ––––, 140 S. Ct. 355, 357, 205 L.Ed.2d 291 (2019). Based on the statute’s language, the Supreme Court held that the statute of limitations for an FDCPA action “begins to run on the date on which the alleged FDCPA violation occurs, not the date on which the violation is discovered.” Id. at 357. Thus, the cases cited by Appellants do not aid our decision regarding application of the discovery rule in this case.
12 Appellants filed their response to the Watts Appellees’ motion for summary judgment on the barratry claim on January 22, 2018, and the trial court granted the summary judgment on February 1, 2018. Had Watts and WGC objected that Appellants had not pleaded the class-action tolling rule, Appellants could have sought permission at that time from the trial court to amend or supplement their petition (which it later did, as discussed in the following footnote) to include the class-action tolling rule. See TEX. R. CIV. P. 166a(c) (providing that trial court shall render summary judgment if the pleadings and summary judgment evidence “on file at the time of the hearing, or filed thereafter and before judgment with permission of the court” show the movant is entitled to judgment as a matter of law (emphasis added)).
13 The trial court’s February 1, 2018 order granting summary judgment on the Watts Appellees’ motion for summary judgment on Appellants’ barratry claim did not mention the class-action tolling rule. On February 16, 2018, the Watts Appellees filed a motion for summary judgment based on limitations regarding Appellants’ claims for unjust enrichment and invasion of privacy by misappropriation. On March 5, 2018, Appellants filed a response to the February 16 motion, which again asserted the class-action tolling rule. On March 12, 2018, Watts and WGC filed a letter in the trial court for the first time objecting that Appellants had not pleaded the class-action tolling rule. Appellants responded to the letter, pointing out that they had raised the class-action tolling rule in their January 22, 2018 response to the motion for summary judgment on their barratry claims without objection. Appellants also requested to supplement their Eighth Amended Petition to include the class-action tolling rule. The court granted the request to supplement and made the supplementation “retroactive” to when Appellants filed their Eighth Amended Petition in December 2017. The court ordered that the supplement had been considered when the court had ruled on the earlier motion for summary judgment on barratry. In its March 13, 2018 order granting summary judgment on Appellants’ invasion of privacy claim based on limitations, the trial court addressed the class-action tolling rule, stating that it did not apply.
14 In their reply brief, Appellants assert that they have “opted out” of the Bexar County class action. See Bara v. Major Funding Corp. Liquidating Trust, 876 S.W.2d 469, 472 (Tex. App.—Austin 1994, writ denied) (recognizing that “federal courts have held that tolling applies to class members who opt out and subsequently file separate suits”). To support their assertion, Appellants cite their original petition and subsequent amended petitions in this suit, apparently to indicate their position that the filing of this suit operated as an opt-out of the class action. We note that neither side states whether the Bexar County trial court gave notice to the class members to inform them that they may opt-out of the class. See TEX. R. CIV. P. 42(c)(2)(B)(v) (providing that trial court must provide notice to class members in class certified under Rule 42(b)(3) (as was the Bexar County class action) to inform them “that that the court will exclude from the class any member who requests exclusion, stating when and how members may elect to be excluded”). We also note that federal courts have reached divergent conclusions regarding whether the filing of a separate, individual suit operates as an opt-out in a pending class action, depending on the circumstances. Compare Butler v. Fairbanks Capital, No. Civ.A. 04-0367(RMU), 2005 WL 5108537, at *6 (D.D.C. 2005) (“Because it is undisputed that the plaintiff was acting in good faith and clearly demonstrated to Fairbanks her intent to pursue this litigation as her sole remedy, she should not be barred from continuing her suit merely because she has not formally opted-out under the procedures set forth in the notice.”); McCubbrey v. Boise Cascade Home & Land Corp., 71 F.R.D. 62, 69 (N.D. Cal. 1976) (holding filing of separate suit during opt-out period “constituted an effective expression of a class member’s desire to opt out”), with Demint v. NationsBank Corp., 208 F.R.D. 639, 641 (M.D. Fla. 2002) (“[T]he mere pendency and continued prosecution of a separate suit, which the litigant instituted before commencement of the ‘opt-out’ period in a related class action, neither registers nor preserves a litigant’s election to ‘opt out’ of the related class action.” (emphasis in original)). In any event, because Mikal Watts and Watts Guerra, LLP did not raise their argument regarding Appellants’ failure to opt-out of the class as a ground supporting summary judgment, the issues underlying this argument were not presented in the trial court, and we do not resolve them here.
15 To reiterate, because the Bexar County class action was filed in May 2014 against only Mikal Watts, individually, and his firm Watts Guerra, LLP, the class action tolling rule applied only to those two defendants.
16 In their live pleading, Appellants alleged that Watts and his firm received $16,790,494.18 in common benefits attorney’s fees and $141,000 in expenses in the multi-district litigation. At other points, they allege that it was $18 million. The summary-judgment evidence indicates that the awarded fees were over $18 million. Therefore, we will refer to the total amount as $18 million, including the $141,000 in expenses.
17 “A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property.” Talley v. Howsley, 142 Tex. 81, 176 S.W.2d 158, 160 (1943).
18 Appellants also pleaded nominal damages for their invasion of privacy by misappropriation claim; however, we will not reverse only for a possible recovery of nominal damages. See MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660, 666 (Tex. 2009) (“[W]here the record shows as a matter of law that the plaintiff is entitled only to nominal damages, the appellate court will not reverse merely to enable him to recover such damages.” (citation omitted)).
19 The Supreme Court of Texas has not expressly decided whether Texas recognizes a cause of action for aiding and abetting. See First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 224–25 (Tex. 2017). We note that, in their motion for summary judgment on the barratry claim requesting summary judgment based on limitations, the Watts Appellees mentioned in one sentence in a footnote, without citing authority or making substantive argument, that “no such cause of action exists” in Texas. However, the trial court’s orders indicate that summary judgment was granted on the aiding and abetting claim based on limitations. The trial court did not address whether aiding and abetting is a recognized cause of action. An appellate court may consider, in the interest of justice, grounds that the summary-judgment movant preserved for review and on which the trial court did not rule. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996). On appeal, the parties do not raise or brief the issue of whether aiding and abetting is a recognized cause of action in Texas. Given the paucity of attention paid by the parties to that issue here and in the trial court, we do not address whether it could be a ground to affirm summary judgment. See id. (appellate courts “may” consider other grounds on which trial court did not base its ruling); see also Cohen v. Tour Partners, Ltd., No. 01-15-00705-CV, 2017 WL 1528776, at *8 (Tex. App.—Houston [1st Dist.] Apr. 27, 2017, no pet.) (mem. op.) (declining to address summary-judgment grounds not ruled on by trial court and stating that “the better course is to remand to allow the trial court to consider these issues in the first instance”); Elwess v. Farm Bureau Cty. Mut. Ins. Co. of Tex., No. 11-12-00339-CV, 2014 WL 6755662, at *3 (Tex. App.—Eastland Nov. 26, 2014, no pet.) (mem. op.) (holding that appellate court would “decline to address” summary-judgment grounds not addressed by trial court).
20 If the trial court abused its discretion in overruling Appellants’ objections to other aspects of Watts’ affidavit, the error would be harmless because we do not otherwise rely on the affidavit to the extent the summary judgment is affirmed. See TEX. R. APP. P. 44.1(a).

Court of Appeals of Texas, Houston (1st Dist.).

Shakeel UDDIN, Appellant

v.

Jacqueline K. CUNNINGHAM, Deputy Receiver of Southern Title Insurance Corporation and Southern Title Insurance Corporation, Appellees

NO. 01-18-00002-CV

|

Opinion issued August 29, 2019

On Appeal from the 334th District Court, Harris County, Texas, Trial Court Case No. 2012-29600

Attorneys & Firms

Eddie M. Krenek, Tricia K. Thompson, for Shakeel Uddin.

James Martin, for Jacqueline K. Cunningham Deputy Receiver of Southern Title Insurance Corporation and Southern Title Insurance Corporation.

Panel consists of Justices Hightower.

MEMORANDUM OPINION ON REHEARING1

Richard Hightower, Justice

*1 Appellant Shakeel Uddin guaranteed a loan made by Sterling Bank to Nabeel & Amaan Investments, Inc. NAI used the loan to purchase real property. Following NAI’s loan default and a superior lienholder’s foreclosure on the property, Sterling filed a claim under the title-insurance policy it received from Appellee Southern Title Insurance Company. STIC, as Sterling’s subrogee, sued Uddin and sought recovery, at least in part, based on Uddin’s breach of his personal guaranty on the loan. After paying on Sterling’s insurance claim and being assigned the rights under the guaranty, STIC amended its petition against Uddin to allege the assignment as a basis for recovery on its claim that Uddin breached the guaranty. STIC successfully moved for summary judgment over Uddin’s arguments that the statute of limitations deprived STIC of standing or capacity, STIC failed to prove each element of its claim, and he had raised material issues of fact on his affirmative defenses. Uddin now appeals, raising the same arguments. We conclude that the statute of limitations did not implicate STIC’s standing, any defect in STIC’s capacity was cured by the relation-back doctrine, STIC established each element of its claim, and Uddin contractually waived his right to assert his other affirmative defenses. We therefore affirm.

Background

NAI obtained a $1,400,000 loan from Sterling Bank on January 10, 2008, to finance its purchase of real property located in Houston. By the terms of the Promissory Note, NAI had five years to pay off the loan and granted Sterling a first lien on the property. That same day, NAI’s president, Shakeel Uddin, signed a Guaranty Agreement, promising Sterling that he would be responsible for NAI’s obligations under the Note if NAI defaulted.

STIC, a Virginia corporation authorized to do business in Texas, issued an Owner’s Policy to NAI and a Lender’s Policy to Sterling.2 Under the Owner’s Policy, STIC insured NAI against loss caused by any lien on the sold property. Under the Lender’s Policy, STIC insured Sterling against loss caused by any lien on the property that was superior to Sterling’s lien. Unknown to STIC and Sterling, a superior credit interest existed: JLE Investors, Inc. had previously loaned money to NAI, and NAI had failed to pay on that loan, resulting in JLE’s lien on the property that predated Sterling’s lien.

Following NAI’s failure to make several payments on the Note, Sterling sent a letter to NAI and Uddin on February 10, 2011, demanding full payment on the Note and the Guaranty Agreement. Neither NAI nor Uddin paid. Twelve days later, Sterling accelerated the Note. Sometime within the following month, Sterling discovered that JLE’s lien was superior to its own and notified STIC. JLE foreclosed on the property in October 2011. The property was later sold during a trustee’s sale. By this time, STIC was in serious financial trouble.

*2 The State Corporation Commission of Virginia filed an application with the Circuit Court of the City of Richmond, seeking its appointment as STIC’s receiver. In December 2011, the Virginia circuit court found that STIC was “in a hazardous financial condition such that any further transaction of its business will be hazardous to its insureds, policyholders, creditors, and the public.” Accordingly, the Commission was appointed as STIC’s receiver and was authorized “to proceed with the rehabilitation or liquidation of [STIC] and to take whatever steps ... reasonably necessary ... for the protection of [STIC’s] insureds, policyholders, creditors, or the public.”

On May 21, 2012, through its Virginia-appointed receiver, STIC filed its original petition against Uddin in Harris County District Court. STIC, being subrogated to Sterling’s rights against third parties by the Lender’s Policy’s terms, sought payment from Uddin for the damages it would incur from its having to pay Sterling under the policy. STIC alleged that Uddin had signed the Guaranty Agreement with Sterling, and STIC stated that, “pursuant to the terms and provisions of the policy[,] [it] is subrogated to the rights Sterling [has] against third parties, most specifically in this instance, its rights against Dr. Uddin as a result of the JLE lien.” STIC asserted a cause of action for breach of contract, alleging that Uddin “has breached the terms of his agreements with Sterling and such breach has caused damages and legal costs,” to which STIC was subrogated.

After Sterling formally filed its claim with STIC under the Lender’s Policy in September 2012, the trial court granted an agreed plea in abatement that removed the case from the trial court’s docket until Sterling’s claim against STIC was “settled or resolved such that the exact amount of damages sought by [STIC could] be confirmed.” In 2015, STIC’s receiver issued a notice to Sterling that its claim had been determined. The notice asserted that Sterling was entitled to $710,000 under the Lender’s Policy; however, because STIC was in receivership, that amount could not be paid immediately. STIC paid a portion of the total determination—$250,000—and continued its suit against Uddin.

Through a series of assignments that concluded in June 2016, Sterling’s rights under the Note were assigned to STIC. And on August 30, 2016, STIC filed an amended petition against Uddin seeking full recovery under the Guaranty Agreement. In its live pleading, filed June 15, 2017, STIC continued to rely on the same facts and relationships among itself, Sterling, and Uddin that it had alleged in its original petition. STIC alleged that it had “the right to enforce and assert claims related to the Note, the Sterling Deed of Trust, the Guarantee Agreement, and the Loan Agreement (collectively, the ‘Loan Documents’).” STIC alleged that, after Sterling made its claim on the title policy, STIC “investigated the Property and the JLE Deed of Trust and retained counsel to represent Sterling’s interests,” incurring investigative and legal fees and “thereby implicating [STIC’s] right to subrogation.”

In its live pleading, STIC further quoted the terms of the Lender’s Policy and alleged that it had the right to “institute and prosecute any action or proceeding” that may be “necessary or desirable” to, among other things, “prevent or reduce loss or damage to the insured.” It stated, “This lawsuit seeks to reduce loss or damage to Sterling by holding [Uddin] accountable for matters related to the Lender’s Policy, specifically, the related Loan Documents.” It further alleged, “Sterling contractually agreed to allow [STIC] to bring this lawsuit in the Lender’s Policy. On March 4, 2016, [STIC] and Comerica Bank, successor in interest to Sterling Bank, inter alia, memorialized the details of this assignment.” Based on these facts, STIC asserted that Uddin was liable for breach of the Guaranty Agreement.

*3 STIC unsuccessfully moved for summary judgment numerous times, and Uddin repeatedly asserted a number of defenses, including the statute of limitations and certain counterclaims that he believed would entitle him to offset his liability to STIC.

In STIC’s final attempt at summary judgment, it argued, among other things, that under Paragraph 11 of the Guaranty Agreement, Uddin waived all defenses, including his statute-of-limitations and other defenses that he asserted in an effort to obtain offsets against his alleged liabilities to STIC. STIC also contended that, even if Uddin did not waive his statute-of-limitations defense, its claim under the Note was still timely. The trial court granted STIC’s motion and ultimately signed a judgment requiring Uddin to pay $1,656,269.28, which consisted of the Note’s remaining principal balance, interest, and various fees. Uddin unsuccessfully moved for a new trial and now appeals.

Analysis

Uddin contends that the trial court improperly granted summary judgment because the statute of limitations deprived it of subject-matter jurisdiction; STIC did not cure its lack of capacity until after the statute of limitations expired; STIC failed to prove each breach-of-contract element; and Uddin raised fact issues on his other affirmative defenses.

I. Statute of limitations and its effect on STIC’s capacity

Uddin contends that the trial court erred by granting summary judgment for STIC because he raised a fact issue on his statute-of-limitations defense. We review a trial court’s rendition of summary judgment de novo, interpreting all summary-judgment evidence and making all reasonable inferences in favor of the nonmovant. Goodyear Tire, 236 S.W.3d at 755.

The statute of limitations for a breach-of-contract action is four years from the date of accrual. Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990).

The Guaranty Agreement provides, “In each event whenever any of the Obligations shall become due and remain unpaid ... Guarantor will, on demand, pay the amount due thereon to Lender ....” On February 10, 2011, Sterling demanded payment of all past-due amounts no later than February 22, 2011. Uddin failed to make that payment, and Sterling accelerated the Note on February 22, 2011. Accordingly, Sterling’s breach-of-contract claim on the Guaranty Agreement accrued in February 2011, meaning the statute of limitations expired in February 2015.

*4 An assignee “takes the assigned rights subject to all defenses which the opposing party might be able to assert against his assignor.” Burns v. Bishop, 48 S.W.3d 459, 466 (Tex. App.—Houston [14th Dist.] 2001, no pet.). Therefore, a claim otherwise barred by the applicable statute of limitations cannot be made viable by assignment. Uddin stresses that, by February 2015, STIC had not been assigned the rights under the Guaranty Agreement and that STIC first sued on the Guaranty Agreement in August 2016, well after the statute of limitations expired in February 2015. It follows, Uddin contends, that “[b]y the time STIC acquired Sterling’s claim on the Guaranty Agreement through assignment in June 2016, limitations had already expired, and the claim was barred.”

Relevant here, STIC argues that the relation-back doctrine applies and, thus, its claim against Uddin for breach of the Guaranty Agreement is not time-barred.3 We agree that STIC’s claim is not time barred.

The relation-back doctrine, codified in Civil Practice and Remedies Code section 16.068, states:

If a filed pleading relates to a cause of action ... that is not subject to a plea of limitation when the pleading is filed, a subsequent amendment or supplement to the pleading that changes the facts or grounds of liability or defense is not subject to a plea of limitation unless the amendment or supplement is wholly based on a new, distinct, or different transaction or occurrence.

Lexington Ins. Co. v. Daybreak Expl., Inc., 393 S.W.3d 242, 244 (Tex. 2013).

In discussing the meaning of “transaction or occurrence” for purposes of the relation-back doctrine, the supreme court observed that “ ‘[t]ransaction’ is a word of flexible meaning. It may comprehend a series of many occurrences, depending not so much upon the immediateness of their connection as upon their logical relationship.” Pineda v. PMI Mortg. Ins. Co., 843 S.W.2d 660, 668 (Tex. App.—Corpus Christi–Edinburg 1992, writ denied).

Here, all of STIC’s pleadings, from its 2012 original petition through its 2017 amended petition, were based on the same “common core of operative facts.” STIC’s original and amended pleadings all relied on the same relationships among the parties, alleging facts relevant to its issuance of the Lender’s Policy, NAI’s default and the foreclosure on the Property, Sterling’s losses as a result of the title defects and claim under the Lender’s Policy, and STIC’s attempts to recover those losses by pursuing a breach-of-contract claim against Uddin as the personal guarantor on NAI’s Promissory Note. Although the amended petition included a new fact and theory of liability—i.e., it reflects the 2016 assignment of the Guaranty Agreement from Sterling’s successors-in-interest to STIC—it did not add new parties or allege facts or theories “wholly based on a new, distinct or different transaction or occurrence.” Id. (“Although the petitions reflect additional or independent causes of action, the gravamen of the recovery sought by each remained constant and was based on money owed the insured lender by the Pinedas, the default on the note by the Pinedas, and the payment by PMI of a claim to the insured lender. These transactions or occurrences remained the cornerstone of each petition. But for the Pineda debt and default, there would have been no claim made by the lender, therefore no payment by PMI to the lender; and PMI would not have sought recovery from the Pinedas.”).

*5 Furthermore, STIC’s 2012 original petition was sufficient to put Uddin on notice regarding the claims raised in STIC’s amended pleadings. See section 16.068 in context of workers’ compensation subrogation provisions).

II. Statute of limitations and its effect on STIC’s standing

Uddin contends that the statute-of-limitations issue presents a standing problem, not a capacity problem curable by the relation-back doctrine. Standing is a component of a trial court’s subject-matter jurisdiction. BP Am. Prod. Co. v. Laddex, Ltd., 513 S.W.3d 476, 479 (Tex. 2017). But because Uddin’s standing argument requires an understanding of the relation-back doctrine discussed above, we address Uddin’s standing argument here.

According to Uddin, when STIC filed its original subrogation action on May 21, 2012, it lacked standing to sue on the Guaranty Agreement because it had not yet been assigned the rights under the Note. Uddin maintains that because standing cannot be waived or cured by the relation-back doctrine, and because STIC was assigned Sterling’s rights under the Note in June 2016—over a year after the statute of limitations expired—allowing STIC’s August 30, 2016 amended petition to relate back to its original May 21, 2012 petition to cure its lack of standing was improper.

Uddin correctly states that standing cannot be waived or cured by the relation-back doctrine. Raytheon Co. v. Boccard USA Corp., 369 S.W.3d 626, 631 (Tex. App.—Houston [1st Dist.] 2012, pet. denied). Nevertheless, we reject Uddin’s argument.

Sterling’s claim under the Lender’s Policy invoked STIC’s contractual subrogation rights. That policy provides, in relevant part:

The Company’s right of subrogation against noninsured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that provide for subrogation rights by reason of this policy.

Thus, STIC was subrogated to Sterling’s rights and interest in the note securing NAI’s indebtedness, including Sterling’s rights under Uddin’s Guaranty Agreement with Sterling.

Uddin’s standing arguments ignore these subrogation rights. Subrogation allows a party who otherwise lacks standing to step into the shoes of and pursue the claims belonging to a party with standing. See Bennett Truck Transp., LLC v. Williams Bros. Constr., 256 S.W.3d 730, 733 n.1 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (“[W]hen an insurer pays an owner’s loss, it becomes the owner of the cause of action and therefore does not need an assignment.”).4

*6 Furthermore, the four-year statute of limitations imposed on STIC’s claims is not a jurisdictional requirement. Limitations is generally classified as an affirmative defense and is not jurisdictional in nature. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845 (Tex. 2005)). Accordingly, we overrule Uddin’s statute-of-limitations issues.

III. Contractual waiver of Uddin’s defenses

Uddin contends that summary judgment was nevertheless improper because he raised material issues of fact relating to his defense of offset, which was based on alleged misrepresentation, conversion, negligence, breach of contract, breach of fiduciary duty, Insurance Code and DTPA violations, unjust enrichment, and equitable estoppel. STIC counters by arguing that Uddin waived these offset defenses under Paragraph 11 in the Guaranty Agreement.

STIC is correct. “The right of offset is an affirmative defense.” Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 936 (Tex. 1980). In Paragraph 11, Uddin waived “all defenses given to sureties or guarantors.” Accordingly, Uddin waived his offset defense and its underlying theories.

We are not swayed from our conclusion by Uddin’s argument that Paragraph 11 waived only those defenses that are exclusively available to guarantors and sureties. We give a contract’s language the plain and ordinary meaning it deserves. ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 837 (Tex. 2018). Uddin reads Paragraph 11 as stating, “Guarantor waives ... all defenses given only to sureties or guarantors at law or in equity ....” But that is not what it says. Under the contract, Uddin waived “all defenses given to sureties or guarantors.” That the offset defense is not a defense exclusive to sureties or guarantors does not change the fact that it is a defense “given to sureties or guarantors.”

Further, that Paragraph 11 goes on to specifically describe certain defenses as being waived does not suggest, as Uddin contends, that the parties were limiting the waiver to those defenses available only to sureties or guarantors. Paragraph 11 states that the “Guarantor waives ... all defenses given to sureties or guarantors at law or in equity other than actual payment of the indebtedness and performance of the actions constituting the Obligations, including, but not limited to, any rights pursuant to Branch Law Firm L.L.P. v. Osborn, 532 S.W.3d 1, 19 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (holding that list prefaced with phrase “including but not limited to” provided nonexclusive examples of covered disputes). The language of Paragraph 11 is not conclusive proof that the parties intended to waive defenses available only to sureties and guarantors, as Uddin contends; rather, the language confirms the parties’ intent, as expressed in Paragraph 16 of the Guaranty Agreement, to draft a contract that “compl[ied] with usury and all other laws relating to this Guaranty.” Accordingly, we overrule Uddin’s issues regarding his other affirmative defenses.

IV. Conclusively establishing each element of breach of contract

*7 Uddin contends that summary judgment was improperly granted because STIC failed to conclusively prove each element of its breach-of-contract claim. A plaintiff seeking to enforce a note must establish that the note exists, it is the owner or holder of the note, and “a certain balance is due and owning on the note.” Leavings v. Mills, 175 S.W.3d 301, 308 (Tex. App.—Houston [1st Dist.] 2004, no pet.). Uddin argues that STIC offered no evidence establishing as a matter of law that $1,656,269.28 was the amount owed under the Guarantee Agreement.

STIC’s summary-judgment evidence included the Note, Uddin’s guaranty of the Note, the assignment of the Note to STIC, and a “payoff statement” that was part of Sterling’s business records. Each document was described either by the affidavit of John Cox, a STIC receiver, or Mary Hensley, a records custodian for Sterling. To establish the amount owed under the Guaranty Agreement, STIC largely relied on the “payoff statement” attached to Hensley’s affidavit. Generally, a “payoff statement” is a “statement of the amount of ... the unpaid balance of a loan secured by a mortgage, including principal, interest, and other charges properly assessed under the loan documentation of the mortgage ... and ... interest on a per diem basis for the unpaid balance.” TEX. PROP. CODE § 12.017(a)(5).

The “payoff statement” provides that a principal balance of $1,082,525.55 was due and owing on September 15, 2016. It also lists as due and owing by that same date interest in the amount of $541,690.99, late fees in the amount of $10,075.41, and other fees in the amount of $21,977.33. It then lists the total “payoff” as $1,656,269.28, which is the cumulative amount of the principal balance, interest, and fees. The trial court’s judgment ordered Uddin to pay STIC $1,656,269.28. Uddin contends, however, that there are numerous inconsistencies and unexplained numbers in this “payoff statement” that make it incapable of conclusively establishing the amount owed. We disagree.

Uddin contends that the payoff statement does not conclusively demonstrate that it describes the Note, pointing out that the payment statement reads, “GUARANTEE : NO,” “ORG EFF DATE: [November 14, 2011.],” and “ORIG LN AMOUNT: 1,332,525.55. He maintains that because this lawsuit is based on the Note that he guaranteed for $1,400,000 and that was executed on January 10, 2008, these three discrepancies raise the reasonable possibility that the payoff statement addresses some other loan. But Uddin swore in an affidavit that Sterling extended only one loan to NAI, and the payoff statement lists the loan as being provided to “NABELL AMAAN IN.” Further, November 14, 2011 is the same date the trial court signed an order of nonsuit dismissing Sterling’s claim against NAI for collection on the Note without prejudice. Additionally, the Note required NAI to pay off the entire loan balance within five years, and the payoff statement lists the “MAT DATE” as January 10, 2013, exactly five years after the Note was executed. Last, under the heading “PAYMENT INFO,” the payoff statement lists “1,400,000” as the “PAYOFF AMOUNT.” This amount is the amount listed in the Note, the Guaranty Agreement, the Purchaser’s and Seller’s Statements, and Uddin’s affidavit. The discrepancies that Uddin identifies in the payoff statement are negated by reference to the other summary-judgment evidence and therefore do not raise a genuine issue of material fact. The trial court properly determined that STIC conclusively established $1,656,269.28 as the amount due and owing under the Note. We therefore overrule Uddin’s last issue.

Conclusion

*8 The trial court’s judgment is affirmed.

Footnotes

1

Appellant Shakeel Uddin moved for rehearing of our April 25, 2019 opinion. We deny the motion for rehearing, withdraw the April opinion and judgment, and issue this opinion and judgment in their stead. The disposition remains the same.

2

STIC issued these policies through one of its issuing agencies, American National Title. ANT’s director was Uddin’s business partner and fifty-percent co-owner of NAI, Syed Rizwan Mohiuddin. STIC filed a complaint in an adversary proceeding against Mohiuddin in United States Bankruptcy Court, seeking a determination that Mohiuddin was liable to STIC for his fraudulent issuance of eight title polices—including the two involved with this case. STIC was ultimately awarded a $8,497,832.62 nondischargeable judgment against Mohiuddin.

3

In its motion for summary judgment and its reply to Uddin’s motion for new trial, STIC argued that, under the Guaranty Agreement, Uddin waived all defenses, including his statute-of-limitations defense. But see Godoy v. Wells Fargo Bank, 575 S.W.3d 531, 538 (Tex. 2019) (“Blanket pre-dispute waivers of all statutes of limitations are unenforceable, but waivers of a particular limitations period for a defined and reasonable amount of time may be enforced.”). We need not address this issue, however, because the relation-back doctrine obviates any potential limitations issue.

4

To the extent that Uddin argues that STIC lacked standing when it filed its original petition in 2012 because it had not fully paid Sterling’s claim, we note that this argument is unavailing for several reasons. First, although STIC had not paid the claim, it had nevertheless incurred an interest in the matter because of its role as Sterling’s insurer. See In re Bridgestone Am. Tire Operations, LLC, 387 S.W.3d 840, 848 n.7 (Tex. App.—Beaumont 2012) (orig. proceeding) (“A defect in capacity is curable and after-acquired capacity will relate back to the inception of the suit.”).

Court of Appeals of Texas, Houston (1st Dist.).

CITY OF FORT WORTH, Texas, Appellant

v.

Print Earl CLARK, Sr., Appellee

NO. 01-18-00430-CV

|

Opinion issued August 13, 2019

On Appeal from the 236th District Court, Tarrant County, Texas, Trial Court Case No. 236-279735-15

Attorneys & Firms

Leslie R. Casaubon, for Print Earl Clark, Sr.

Harvey L. Frye, for City of Fort Worth, Texas.

Panel consists of Justices Countiss.

MEMORANDUM OPINION

Sarah Beth Landau, Justice

*1 This is a workers’ compensation case. Print Earl Clark, Sr. was involved in an on-the-job vehicle collision while working for the City of Fort Worth. He later sought medical treatment for back pain with radiculopathy to his lower extremities. Eventually, he sought lifetime income benefits under a provision for total loss of use of two extremities, specifically, both feet.

The Texas Department of Insurance, Division of Workers’ Compensation denied his claim. Clark sought judicial review, and the case was tried to a Tarrant County jury. The jury found that Clark met his burden for establishing entitlement to lifetime income benefits, and the trial court entered a judgment requiring the City to provide income and medical benefits. The City appeals.

The City contends the evidence is insufficient to support the jury’s finding. It further contends that the trial court erred in limiting questioning of Clark about other jobs he had applied for and excluding certain exhibits related to his job search. Finally, it contends there was reversible error in the court’s jury charge.

We affirm.

Background

Clark was employed by the City of Fort Worth for 17 years as a roofer. In March 2008, Clark’s work truck was stopped at a stoplight when two nearby vehicles collided and one of those vehicles struck Clark’s truck. Initially, Clark told medical professionals he was experiencing pain in his lower back that radiated down his right leg with numbness and tingling. Over the next year, Clark saw various medical doctors for testing, treatment, and workers’ compensation evaluations. In 2009, Clark began seeking treatment from a chiropractor, Dr. Kenneth Ericksen. Clark described how pain limited his ability to engage in physical activity one year after the collision:

I was limited to the amount of weight that I could pick up ... [and] I could stand up maybe 10 or 15 minutes at a time, because the longer I stand up, the more the radiating down my leg would get until I had to sit down, and my back just hurt[ ] all the time.

Ericksen restricted Clark’s work and other activities due to his injury. Clark qualified for Workers’ Compensation supplemental income benefits. Clark’s pain continued. Ericksen continued to restrict his physical activity.

In April 2009, the Division of Workers’ Compensation referred Clark to a designated doctor, Dr. Melvyn Bernstein. Bernstein ordered an electrodiagnostic test and physically examined Clark. Bernstein’s medical conclusion was that Clark had reached maximum medical improvement (known as “MMI”) as of April 14, 2009 and had a whole-person impairment rating of 25%.

Clark eventually sought lifetime income benefits, which are paid until the death of the employee at a rate of 75% of the employee’s average weekly rate. See id. § 408.161(a)(2).

*2 Under the Labor Code, loss of a body part means “the total and permanent loss of use” of that body part. Galindo v. Old Republic Ins. Co., 146 S.W.3d 755, 759 (Tex. App.—El Paso 2004, pet. denied) (emphasis added). Clark relied on the second, alternative definition.

In advance of a contested hearing on Clark’s claim for lifetime income benefits, Clark was required to submit to a “carrier required medical examination” by an evaluator selected on behalf of his employer. The City of Fort Worth selected Dr. Donald Mauldin, who examined Clark in February 2015. While Clark’s chiropractor, Ericksen, had opined that Clark met the criteria for lifetime income benefits after noting that “extended/prolonged activity causes significant increase in pain and symptoms which necessitate frequent and extended breaks which an Employer will not allow,” Mauldin determined that Clark did not. Mauldin opined that Clark “does not have anywhere near total loss of a lower extremity.”

The Division of Workers’ Compensation’s hearing officer held a contested hearing in April 2015 to decide whether Clark was entitled to lifetime income benefits “based on a total loss of use of both feet.” The hearing officer determined that Clark was not. Specifically, the hearing officer determined that Clark had a compensable injury that resulted in physical restrictions but that Clark failed to meet either criterion for “total loss of use.” Clark failed to prove that he “no longer possesses any substantial utility of both feet at or above the ankle as a member of the body” or that “his bilateral lower extremity condition is such that he cannot get and keep employment requiring the use of both feet at or above the ankle as a result of the compensable injury.” Clark’s claim for lifetime income benefits was denied, and Clark sought judicial review through a jury trial.

The parties entered into various stipulations, which narrowed the scope of the jury trial. In opening statements, Clark’s attorney explained that the only issue for the jury to decide was whether Clark sustained a total loss of use of his feet at or above the ankles, as the term “total loss of use” would be defined for the jury, such that Clark would be entitled to lifetime income benefits. Clark’s attorney told the jury that the case would not be about whether Clark had been hurt or whether he was permanently impaired because “[n]obody disputes that.”

During the City’s opening statement, the City’s attorney previewed its evidence and told the jury that Clark’s injury was to his back, not his feet. The attorney stated that, to the extent Clark had any complaints of pain beyond his lower back, Clark’s only complaint was of pain radiating into his right leg, not both. The City’s attorney highlighted that “only one doctor in this case gives the opinion that Mr. Clark has permanently lost the use of both feet at or above the ankle, and that’s his chiropractor, Dr. Ericksen.”

The jury received testimony from three witnesses: Clark, Ericksen and Mauldin. Clark testified in person, while Ericksen and Mauldin testified by deposition. The jury received a large amount of documentary evidence, including close to 400 pages of medical records, medical reports, and related physician materials. Then, the jury was asked to determine whether Clark met the burden for entitlement to lifetime income benefits on the claim of total loss of use of both feet. We will summarize the testimony and documentary evidence below before reviewing the jury’s determination.

Testimony of Ericksen and Clark

*3 Excerpts of Ericksen’s deposition testimony were read to the jury. Ericksen testified that he is familiar with the workers’ compensation criteria because, while his involvement in this case was as a treating chiropractor, the Division of Workers’ Compensation has qualified him as a designated doctor, and he has experience opining on impairment ratings and maximum medical improvement determinations.

Ericksen opined that the vehicle collision injured Clark’s cervical and lumbar spine. The lumbar injury caused radiculopathy.

Ericksen testified that Clark’s electrodiagnostic study “showed evidence of impairment to multiple motor nerves in both legs.” The impaired nerves innervated Clark’s feet. Ericksen testified that Clark experienced radiating pain into his legs and could not stand or sit for more than a few minutes at a time. According to Ericksen, Clark must “alternate between standing and sitting for a period, but then he becomes intolerant to that and has to lay down.”

Ericksen opined that Clark’s car accident caused Clark to suffer a total loss of use of both his feet. Clark was unable to get and keep employment requiring the use of both feet because he was unable to stand or sit for more than a few minutes at a time and required frequent, intermittent breaks to lie down. In Ericksen’s professional opinion, he testified Clark was not employable.

Clark testified in person. He explained how the collision occurred, what his initial pain symptoms were like, and how that pain evolved over the next year and continued into trial. He testified that the pain began in his lower back but later began radiating down his right leg. He began to experience numbness in both feet. He also was sensitive to cold temperatures. By trial, his numbness had worsened so that both big toes were constantly numb. Clark testified that he could stand only for 15 minutes or so, then he had to sit. But he could not sit for long either.

In addition to the pain and constant numbness Clark experienced in his feet, Clark also testified to loss of use of both feet. He testified that his “ankles have given out” several times, causing him to lose his bodily control and fall. In other words, his feet at the ankles have failed to function and he has fallen as a result.

Clark was asked about the medical examination performed by the workers’ compensation designated doctor, Bernstein. Clark testified that he told Bernstein he had pain radiating into his right leg and numbness in his left foot. When he participated in a functional capacity evaluation test, Clark could stand for only 18 minutes. After medical testing and evaluation of Clark, Bernstein gave Clark a whole person impairment rating of 25%. Clark testified that he would not be able to perform any activity that required him to be on his feet for hours at a time. And he has never been released to return to work.

Parties’ stipulations

After Clark testified, the parties’ stipulations were read to the jury, including that Clark “sustained a compensable injury” on March 18, 2008, when his work truck was struck, and that he “reached maximum medical improvement on April 14, 2009, with a 25 percent impairment rating as certified by designated doctor, Melvyn Bernstein.”

Clark’s medical records

*4 Clark’s medical records provided evidence of the various doctors’ examinations, diagnoses, and impairment determinations. Bernstein’s medical report stated that he saw Clark at the request of the Texas Department of Insurance, Division of Workers’ Compensation for a “designated doctor evaluation.” It noted findings from a 2009 MRI, including disc protrusions. It also noted findings from a 2009 electrodiagnostic study, including “evidence of impairment to multiple motor nerves in both legs ... which is consistent with a diagnosis of a moderately severe mid to low lumbar central spinal stenosis.”

Bernstein’s report included his medical opinion that, at the time of the evaluation in April 2009, Clark was “still symptomatic” and had “reached Maximum Medical Improvement.” Further, based on “the medical record as developed and on the entire examination detailed” in the report, Bernstein assigned Clark a “25% Whole Person Impairment” rating, noting, among other findings: (1) Lumbosacral spine impairment and radiculopathy and loss of motion segment integrity; (3) a 4 to 5 mm anterior displacement of L5 over S1; and (4) “moderately severe impairment to multiple motor nerves in both legs ... which supports and correlates with the physical examination which demonstrated decreased deep tendon reflexes in both lower extremities combined with a bilateral, symmetric motor/strength deficit ranging from L2 through S1 or lower.”

The medical records revealed that Dr. Gregory Ward had conducted a neurosurgical evaluation of Clark in March 2009, at which Clark reported numbness and tingling in his left foot and leg. Ward recommended a lumbar laminectomy at L4–L5 and L5–S1.

An April 2009 EMG report, included in the trial exhibits, stated abnormal findings, including “bilateral tibial and peroneal motor nerve conduction velocities” that are “mildly slowed below the knees,” as well as “moderate to severely prolonged” “long wave studies (F-and H-waves).” Dr. Stoll’s medical conclusion was that these findings revealed “evidence of impairment to multiple motor nerves in both legs ... consistent with a diagnosis of a moderately severe mid to low lumbar central spinal stenosis.”

Dr. Carla Michaels evaluated Clark in 2014. According to Michaels’s notes, Clark reported that his “feet and toes are tingling,” and he “continues to have numbness in both great toes due to L5 radiculopathy.” Clark described his “radiating pain” as “burning, dull aching type pain.” Additionally, Clark “has difficulty performing activities of daily living.”

The City’s motion for directed verdict is denied

At the conclusion of Clark’s presentation of evidence, the City moved for a directed verdict, arguing that Clark’s only injury was to his back and he could not meet the standard for injury to his feet to qualify for lifetime income benefits based on a total loss of use of both feet. Clark responded that, under Texas law, the qualifying injury could be direct or indirect, and, because he presented evidence that an injury to his back caused subsequent damage and indirect injury to his feet, he had sufficient evidence to preclude a directed verdict. Clark pointed to evidence that electrodiagnostic testing revealed impairment to multiple motor nerves in both his legs, as well as noted muscle atrophy and decreased strength in his legs. The City responded that any leg issues Clark had experienced originated at the site of injury to his lower back, not an injury to his feet. The trial court denied the City’s motion for directed verdict.

Testimony of Mauldin

*5 The City presented its only witness, Dr. Mauldin, by reading excerpts from his deposition testimony. Mauldin testified that he previously had a private practice in the Dallas area that focused on foot and ankle surgical care. In 2014, he closed his practice and began working exclusively within the workers’ compensation area in the role of a designated doctor who evaluates workers’ injury and determines any impairment rating or a medical examiner who evaluates workers and their medical records to prepare reports on behalf of employers from whom the workers seeks compensation.

Mauldin was hired by the City to evaluate Clark. He testified that, during his evaluation, Clark discussed pain in his back and right leg but did not complain of pain in his left leg. Mauldin stated that Clark had a normal radiculopathy associated with this injury.” Mauldin reiterated that, during his physical exam of Clark, Clark’s “left leg never had any symptoms.” Mauldin subsequently broadened his statement and testified that, on Clark’s last exam, Clark “didn’t even have any leg pain or any foot pain or any problems.... So there’s—there would be no loss of use of those feet.”

Clark’s attorney read excerpts from Mauldin’s deposition in which Mauldin agreed that multiple other doctors who had examined Clark or performed testing on him during the workers’ compensation proceedings had concluded there was evidence of symptoms and injury to Clark’s feet. Mauldin agreed that Dr. Mike Shah noted radiculopathy.

Mauldin acknowledged that the workers’ compensation designated doctor, Dr. Bernstein, had determined Clark had a permanent whole person impairment rating of 25%, which was based, in part, on an electrodiagnostic study. While Bernstein had described the study as disclosing evidence of radiculopathy and “impairment to multiple motor nerves in both legs,” Mauldin maintained that it was “normal.” Mauldin conceded that a 25% impairment rating is a “high” level of impairment that is “generally” consistent with a “significant injury.”

Mauldin acknowledged all these other doctors’ opinions and then testified that he, nonetheless, holds the opposite opinion. In Mauldin’s opinion, Clark did not suffer a severe injury; Clark had an “absolutely normal lower extremity exam”; Clark had no radiculopathy and two doctors who evaluated Clark on behalf of his employer had found permanent impairment, in Mauldin’s opinion, “there is not any objective evidence that this individual should not be capable of returning back to full function of whatever he was doing at the time of the injury based on the injury.”

Charge conference

At the close of evidence, the court conducted a charge conference. The City objected to the wording of the single question to be asked of the jury. The City noted that the pattern jury charge does not discuss injury in terms of being “direct or indirect” and argued that the question to the jury should not discuss injury in those terms because it impermissibly comments on the weight of the evidence. The City also objected to the definition of “total loss of use,” arguing that the phrase “by reason of such injury” should modify both parts of the definition but, as written, only modified one part. The trial overruled both objections.

The court’s charge to the jury

*6 The jury charge asked a single question after providing the jury four definitions/instructions. The question was as follows:

Did PRINT CLARK suffer a direct or indirect injury to both feet at or above the ankles as a result of the accident of March 18, 2008, that was a producing cause of permanent and total loss of use of both feet at or above the ankles beginning on August 29, 2014?

Answer “Yes” or “No”

The definitions/instructions all related to terms used in the single question. The two definitions/instructions relevant to this appeal are as follows:

“Injury” means damage or harm to the physical structure of the body and such diseases or infections as naturally result from such damage or harm.

“Total loss of use” of a member of the body exists whenever ... [t]he condition of the injured member is such that the worker cannot get and keep employment requiring the use of such member.

The jury answered “Yes” to the single question, and the trial court entered a final judgment requiring the City to pay lifetime income benefits. The City appealed.

Sufficiency of the Evidence

In its first issue, the City contends there is legally and factually insufficient evidence to support the jury’s verdict because there is insufficient evidence that Clark suffered damage or harm to the physical structure of both feet or that he lost the use of both feet at or above the ankle.

A. Standard of review

Evidence is legally sufficient if it “would enable reasonable and fair-minded people to reach the verdict under review.” Id. at 827.

In a factual sufficiency review, we consider and weigh all the evidence. See Choice! Power, L.P. v. Feeley, 501 S.W.3d 199, 209 (Tex. App.—Houston [1st Dist.] 2016, no pet.).

We may not substitute our own judgment for that of the factfinder or pass upon the credibility of witnesses. GTE Mobilnet of S. Tex. v. Pascouet, 61 S.W.3d 599, 616 (Tex. App.—Houston [14th Dist.] 2001, pet. denied)).

B. Injury to feet versus injury to other body structures, which then affects the feet

*7 Clark contends he suffered an indirect injury to his feet. The City contends Clark’s only injury is to his back and what Clark experiences in his feet is simply radicular symptoms. In distinguishing between injury to the feet and injury to other body structures which then affects the feet, the parties focus on three workers’ compensation cases. These are Travelers Indemnity Company of Connecticut v. Thompson, No. 05-16-00816-CV, 2018 WL 524860 (Tex. App.—Dallas Jan. 24, 2018, pet. denied) (mem. op.). We discuss each in the order they were decided.

In Muro, the Texas Supreme Court held that a worker’s loss of use of her feet did not qualify for lifetime income benefits under Id. at 276.

The Texas Supreme Court decided De La Cruz four years later. There, a worker injured her back and knee. Section 408.161. Id.

Three years later, the Dallas Court of Appeals distinguished Muro and De La Cruz to hold that an injured worker had presented sufficient evidence of “indirect physical damage and harm to his feet.” Thompson, 2018 WL 524860, at *6 (affirming judgment awarding worker lifetime income benefits). Noting that evidence of radicular pain in the feet would be insufficient to establish an injury to the feet, the court noted additional evidence of injury, including evidence that the worker had “endured swelling, numbness, tingling, foot flare, decreased ankle reflexes, [and] sensitivity to hot and cold temperatures” in his feet. Id. The court held that this additional evidence provided legally sufficient evidence of symptoms of physical damage and harm to the feet.1 Id.

*8 While the damage may have been indirect and caused by the lengthy episodes of radiculopathy caused indirect physical damage and harm to his feet at or above the ankles ... to support the jury’s [lifetime income benefits] award”). The Dallas court affirmed the trial court’s judgment, and the Texas Supreme Court denied review of that decision. Id.

Combined, these cases establish that radicular pain is not evidence of an injury to the feet, themselves; however, radiculopathy can, over time, lead to indirect injury to the feet, which may be established through evidence of loss of ankle reflexes, sensitivity to hot and cold temperatures, permanent loss of functionality of the feet, or other damage to the feet.

C. Clark’s evidence is legally and factually sufficient

Medical evidence was admitted for the jury’s consideration. The jury was presented two opposite interpretations of that medical evidence by the parties’ experts. Clark’s treating provider, Ericksen, testified that Clark had lost the use of both feet due to injury and met the criteria for lifetime income benefits. The City’s selected expert, Mauldin, testified that Clark’s feet were not injured, he did not have radiculopathy, he did not suffer a permanent injury, and he was physically capable of working. Mauldin did not merely disagree with Ericksen’s ultimate conclusions in this case; he disputed the existence of any permanent injury.

Against these two competing medical opinions, the jury received evidence that several other physicians had diagnosed Clark with an injury to his back and radiculopathy symptoms into his legs. Some of these physicians noted atrophy in one of Clark’s legs, numbness in both his feet, and other foot symptoms. Mauldin testified that he disagreed with the medical opinions and diagnoses of all these physicians. Mauldin also disagreed with these physician’s interpretations of objective medical tests.

Mauldin stood alone in concluding that Clark was not permanently injured. Given Mauldin’s disparate position, it is not unreasonable that, if the jury weighed the medical evidence and testimony with an eye toward rejecting one view as less credible, the jury might have found Mauldin’s position to be the less credible. The determination of witness credibility, including expert witness credibility, is the jury’s alone to make and will not be second guessed on appeal. See Quiroz ex rel. Quiroz v. Covenant Health Sys., 234 S.W.3d 74, 84 (Tex. App.—El Paso 2007, pet. denied) (stating that jury is free to believe or disbelieve all or part of any witness’s testimony, including expert witnesses, and that, in face of conflicting expert testimony, appellate court cannot substitute its own judgment for that of jury).

Compounding Mauldin’s susceptibility to a negative credibility finding was his own testimony demonstrating unfamiliarity with the standard for qualifying for lifetime income benefits due to loss of use of both feet. Mauldin testified that both subparts of the definition of “total loss of use” had to be met for a worker to qualify for benefits. In other words, according to Mauldin, a worker had to experience loss of substantial utility of the feet and not be able to get and keep employment using the feet. Afterward, Mauldin was shown that the standard is stated in the disjunctive. See Galindo, 146 S.W.3d at 759 (“Total loss of use of a member of the body exists whenever by reason of injury such member no longer possesses any substantial utility as a member of the body or the condition of the injured member is such that the worker cannot get and keep employment requiring the use of such member.”). Mauldin was then asked whether he remembered that it was a disjunctive test, and he replied, “Okay. If you say so.” At the conclusion of the exchange, Mauldin stated that his ultimate conclusion remained the same regardless if the standard was disjunctive or otherwise. A jury reasonably could have factored this exchange into its credibility determination.

*9 The evidence was not limited to medical records and competing expert testimony though. Clark provided direct testimony about his accident, pain, and resulting physical limitations. Clark testified that his condition worsened over time. What began as back pain, led to radiculopathy symptoms in his legs and, eventually, worsened to the point that his ankles would give out, causing him to fall. Additionally, his feet became sensitive to cold.

Clark’s testimony went beyond complaints of radicular pain. Cf. De La Cruz, 470 S.W.3d at 59 (concluding that evidence was legally insufficient to support lifetime income benefits because record did not “identify whether the condition was transient or permanent in both ankles; whether it reflected more than damaged nerve roots in [her] back; whether [her] feet were unable to function properly; or whether the condition was permanent and caused permanent total loss of use of both feet.”). At least two physicians, including the designated doctor for workers’ compensation benefits, had told him that he had reached maximum medical improvement years before trial. Clark’s injuries were permanent: he would not improve. And Clark presented evidence that, at the time of trial, he had no tendon reflexes in his ankles and had repeatedly fallen because his ankles had given out. Thus, Clark presented evidence of injury to his feet that was permanent.

The injury to Clark’s feet may have been indirect, in that it resulted from prolonged radiculopathy caused indirect physical damage and harm to his feet at or above the ankles ... to support the jury’s [lifetime income benefits] award”).

In sum, Clark testified that the integrity of his ankles was so compromised that he had spontaneously fallen more than once. A jury could have reasonably determined that having a body part repeatedly fail to function exceeded mere Dallas Nat’l Ins. Co. v. Morales, 394 S.W.3d 826, 829–36 (Tex. App.—El Paso 2012, no pet.) (concluding that there was legally and factually sufficient evidence to sustain judgment that worker was entitled to lifetime income benefits on evidence worker had “difficulty walking, bending, stooping, squatting, and has a tendency to fall as his right knee gives way.”).

The medical evidence, including the medical records and the testimony of Ericksen—who the City did not challenge on reliability, methodology, or any other ground—coupled with Clark’s own testimony about the loss of use of his feet at or above the ankles met the threshold for factual and legal sufficiency. See Choice! Power, L.P., 501 S.W.3d at 209.

We overrule the City’s first issue.

Excluded Evidence

Before applying for lifetime income benefits, Clark obtained workers’ compensation benefits under a “supplemental income benefits” plan. According to the City’s attorney at trial, the supplemental income benefits plan required Clark to submit job applications to qualify for that type of benefit. Clark did so. The City sought to admit evidence of Clark’s job applications, arguing that the evidence supported a reasonable determination that Clark believed he was physically able to work after his injury.

*10 Clark objected to the job-application evidence, arguing, among other things, that the standards for supplemental income benefits and lifetime income benefits were not the same. The sole issue for the jury was whether Clark suffered an injury to his feet that resulted in loss of use of both feet. Whether Clark turned in job applications to meet supplemental-income benefit requirements and, as a separate question, whether Clark believed he would be physically able to do a job in the event he were hired, Clark argued, would not resolve the issue of whether he had lost the use of his feet. Moreover, there was evidence that Clark’s condition had deteriorated since submitting at least some of the job applications, thereby further diminishing the probative force of the evidence.

Clark argued the evidence would confuse the issues for the jury and potentially prejudice Clark to a greater extent than the probative force of the evidence. See TEX. R. EVID. 403 (providing that trial court may exclude relevant evidence if its probative value is substantially outweighed by danger of, among other things, confusion of issues and misleading of jury).

The trial court sustained the objections for “numerous reasons ... including, but not limited to jury confusion, Rule 403.” In three issues, the City contends the trial court erred in excluding evidence of Clark’s job applications from the jury’s consideration.

A. Standard of review

The trial court has broad discretion to determine admissibility of evidence; as such, a reviewing court will reverse only if there is an abuse of that discretion. Owens–Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).

B. Trial court did not abuse its discretion

Outside the presence of the jury, the City conducted a voir dire examination of Clark focused on his various job applications while seeking supplemental income benefits. Clark agreed that he was required to apply for jobs to qualify for that type of benefit. The City posited that it would be “dishonest” to apply for jobs that an applicant did not believe he could do and asked Clark whether he intended to “waste” the employers’ time by applying for jobs that he did not think he could physically do or did not have any intention of keeping. Clark responded:

No. I applied for jobs that were accepting applications ... whether I intended on keeping them or not, ... it wasn’t never thought. I was applying for whoever were taking applications. Those are the people that I applied to.... My intentions were if they were to call me for an interview and ... if they were to hire me, I would try to do the job.... And if I couldn’t, I couldn’t ... those were my intentions.... I was told that I had to seek employment.

(Emphasis added.) He later added that he “intended to get a job” but whether he “could keep it or not” was unknown; he “would have found out” once he tried the work. (Emphasis added.)

The City acknowledged that Clark had been required to seek employment to qualify for supplemental income benefits before transitioning to a claim for lifetime income benefits. Nonetheless, the City sought to present the job-application evidence to the jury to support an inference that Clark applied for the jobs because he believed he was physically able to do those jobs. Clark’s voir dire testimony rejected that inference, explaining that he applied for jobs because he was required to submit application and that, if he were given a job—which never occurred—he might not be able to do it: “And if I couldn’t, I couldn’t.”

*11 This case presented a limited issue to the jury: whether Clark had lost the use of both his feet at or above the ankles such that he could not get and keep employment that required the use of his feet. See Serv. Lloyds Ins. Co. v. Martin, 855 S.W.2d 816, 826 (Tex. App.—Dallas 1993, no writ) (affirming evidentiary ruling to exclude evidence related to prior workers’ compensation claims, reasoning that, “because the incidents involve bodily injury and ... filing of claims, it is likely that the introduction of this evidence would confuse the issues and might lead the jury into drawing incorrect inferences about the issues at hand.... [Moreover,] these dangers substantially outweigh the probative value of the evidence.”). The probative value of the excluded evidence was further diminished when Clark testified that his physical condition deteriorated between when he had sought supplemental income benefits and when he later sought lifetime income benefits. Thus, his ability to do the work when he applied did not mean he could perform the work at the time of trial.

We conclude the trial court did not abuse its discretion in excluding evidence related to Clark’s past efforts to apply for jobs while seeking a different type of workers’ compensation benefit.2

Jury Charge

The City’s last issue concerns the single question in the court’s charge. The City argues that the trial court erred by including additional words not found in the Pattern Jury Charge in that the additional words functioned as a comment on the weight of the evidence and misled the jury. The City concedes, though, that the jury charge question provided an accurate statement of the law.

A. Standard of review

If a jury charge is legally correct, the trial court has broad discretion regarding how to submit the issues, including the wording of questions, definitions, and instructions. McFarland, 365 S.W.3d at 452. A trial court has wide discretion in submitting instructions and jury questions.

B. Trial court did not abuse its discretion

Lifetime income benefits for the loss of use of both feet can be based on either a direct or indirect injury to the feet. See Burdine, 34 S.W.3d at 706). The question presented to the jury allowed for either form of injury:

Did Print Clark suffer a direct or indirect injury to both feet at or above the ankles as a result of the accident of March 18, 2008, that was a producing cause of permanent and total loss of use of both feet at or above the ankles beginning on August 29, 2014?

*12 The jury question the City proposed and the trial court rejected asked if Clark suffered “an injury” to both feet. Thus, the claim of error is the inclusion of the phrase “direct or indirect” to describe the injury. Yet, the City concedes the jury question provided a correct statement of law.

We conclude it was neither arbitrary nor unreasonable to include the phrase “direct or indirect” in the jury question to accurately convey the correct legal standard for recovery. See Dabney v. Wexler-McCoy, Inc., 953 S.W.2d 533, 536 (Tex. App.—Texarkana 1997, pet. denied) (instruction was correct statement of law and did not refer to specific facts of case to directly comment on weight of evidence; therefore, instruction was not error).

The City argues that the inclusion of the phrase “direct or indirect” required “further lengthy instructions explaining that post laminectomy syndrome do not constitute damage or harm to the physical structure of both feet.” The City’s argument does not support a conclusion that the trial court abused its discretion for two reasons.

First, the City did not request an instruction that Bayer Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 602–03 (Tex. App.—Houston [14th Dist.] 2006, pet. denied); TEX. R. EVID. 278 (“Failure to submit a definition or instruction shall not be deemed a ground for reversal of the judgment unless a substantially correct definition or instruction has been requested in writing and tendered by the party complaining of the judgment.”).

Second, the definitions that were included in the jury charge informed the jury that an “injury” meant “damage or harm to the physical structure of the body” and that “total loss of use of a member of the body” meant, in the context of this case, that the “condition of the injured member is such that the worker cannot get and keep employment requiring the use of such member.” Combined, these instructions informed the jury that Clark’s feet must have been damaged or harmed and it would be insufficient if his back injury caused him to not use his feet. See Chesser v. LifeCare Mgmt. Servs., L.L.C., 356 S.W.3d 613, 637 (Tex. App.—Fort Worth 2011, pet. denied) (concluding trial court did not err in refusing additional instructions given instruction already included in charge adequately informed jury of theories). To the extent there was any doubt on this issue, the City explicitly told the jury, without objection, during closing argument, that the injury had to be to Clark’s feet and that radicular pain was not within the definition of an injury.

We conclude the trial court did not abuse its discretion in its phrasing of the jury question.

Conclusion

We affirm the trial court’s judgment.

Footnotes

1

Thompson is procedurally similar to this case. The Division of Workers’ Compensation determined that the worker did not qualify for lifetime income benefits, the worker filed a claim in district court, a jury returned a verdict in his favor that awarded lifetime income benefits, and the payor appealed. Travelers Indem. Co. of Connecticut v. Thompson, No. 05-16-00816-CV, 2018 WL 524860, at *1 (Tex. App.—Dallas Jan. 24, 2018, pet. denied) (mem. op.). Where the cases differ is that the payor in Thompson challenged only the legal sufficiency of the evidence that the worker suffered an injury to his feet, while, here, the City challenges both the legal and factual sufficiency of the evidence. See id.

2

The City also argues that the trial court erred by “effectively shutting down the City’s cross examination of Mr. Clark.” But the record does not support the City’s contention. The City asked Clark a specific question on whether he would be able to do a hypothetical job that did not require him to stand for more than 30 minutes at a time or walk long distances. Clark objected that the question called for speculation, had no foundation, and was improper because Clark “is not a vocational expert.” The trial court sustained Clark’s objection. The City did not seek to question Clark further on the topic by narrowing its question, providing additional facts to its hypothetical, or otherwise addressing the bases for Clark’s objection. Instead, the City switched to a different line of questioning. We reject the City’s contention that the trial court prevented further cross-examination of Clark.

Court of Appeals of Texas, Houston (1st Dist.).

BROCK SERVICES, LLC, Appellant

v.

Eustolia Darait MONTELONGO, Appellee

NO. 01-18-00923-CV

|

Opinion issued August 8, 2019

On Appeal from the 215th District Court, Harris County, Texas, Trial Court Case No. 2018-30236

Attorneys & Firms

Zachary Nye, for Appellee.

LaDelle Davenport, for Appellant.

Panel consists of Chief Justice Countiss.

MEMORANDUM OPINION

Gordon Goodman, Justice

*1 Eustolia Montelongo brought suit against her former employer, Brock Services, LLC, alleging that she was subjected to harassment based on her sex and retaliation for having reported the harassment.

Brock moved to compel arbitration. The trial court denied the motion and Brock appeals, contending that it proved Montelongo entered into a valid arbitration agreement with Brock and that Montelongo’s claims fall within the scope of that agreement. We reverse and remand.

BACKGROUND

In March 2017, Brock offered to hire Montelongo as an industrial insulation installer. Brock conditions each offer of employment, including Montelongo’s, on the prospective employee’s agreement to adhere to Brock’s Dispute Resolution Policy. Montelongo received a written copy of the Dispute Resolution Policy and an electronic copy of its Employee Handbook as part of the hiring process.

The two-page Dispute Resolution Policy begins with a sentence written in Spanish, centered on the page and printed in boldfaced, capital letters, which translated into English, provides the following warning: “If you cannot read and understand this information in English, you must request this information in Spanish.”

The Dispute Resolution Policy then proceeds to explain that it

creates a mutual obligation to arbitrate between Brock Holdings III, Inc., its affiliates, subsidiaries and parent (the “Brock Group”), and all employees of The Brock Group (collectively, The Brock Group and employees of The Brock Group are herein referred to as the “Parties”), and is for the express benefit of all other persons or entities included in the definition of the term “Company” and “Company’s Customer” (as both terms are hereinafter defined). Each, every, any and all claims, disputes and/or controversies now existing or later arising between or among the Parties, or between or among the employees of The Brock Group and any other person or entity constituting the Company or a Company Customer, whether now known or unknown, arising out of or related to employment or termination of employment with The Brock Group shall be resolved only through final and binding arbitration, pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq., and not by way of court or jury trial.

The Agreement specifies that it covers claims including those alleging

termination[ ] or harassment and claims arising under the ... Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act, and federal, state, or other statues and/or ordinances, if any, addressing the same or similar subject matters, and all other federal, state, or other statutory and common law claims including retaliation claims (but excluding other workers’ compensation and unemployment insurance claims).

With respect to these types of claims, the Dispute Resolution Policy further declares:

Nothing in this Dispute Resolution Policy shall be deemed to preclude a party from filing or maintaining a charge with the Equal Employment Opportunity Commission or the National Labor Relations Board or bringing an administrative claim before any agency in order to fulfill the party’s obligation to exhaust administrative remedies before making a claim in arbitration.

*2 On her hiring date, Montelongo signed the Dispute Resolution Policy and an acknowledgment of electronic delivery of Brock’s Employee Handbook. Page 70 of the Handbook addresses the Dispute Resolution Policy, explaining that it

is a binding agreement and acceptance and/or continuation of employment with the Company constitutes knowing and voluntary acceptance and agreement to the terms and condition[s] of the Dispute Resolution Policy.

The Handbook’s acknowledgement page includes notice “that the policies, rules and benefits described in the Handbook are subject to change at the sole discretion of the Company at any time.” However, the Handbook expressly excepts the Dispute Resolution Policy from this notice, which, the Handbook declares, is “a distinct and separate agreement from all other modifiable Company Policy provisions” that “may not be changed or modified by The Brock Group, except with the acceptance of the employee after 60 days’ notice.”

With respect to fees and costs, the Dispute Resolution Policy provides:

Each party will pay the fees for his, her or its own attorneys, subject to any remedies to which that party may later be entitled under applicable law. If an employee brings a claim, dispute, or controversy subject to this Dispute Resolution Policy, the employee bears the responsibility for JAMS’s initial filing or case management fee. All other fees associated with the arbitrator or arbitral forum shall be paid for by a company in The Brock Group, if it is a party to the arbitration, or by the applicable person(s) or entity(ies) constituting the Company or Company’s Customer that is otherwise a party to the arbitration, if no company in The Brock Group is a party to the arbitration.

Both the Dispute Resolution Policy and the section of the Handbook discussing it advise the prospective employee to consult with legal counsel regarding the legal consequences of the Dispute Resolution Policy.

Montelongo alleges that the following events began shortly after she was hired and form the basis of her claims against Brock. Montelongo’s supervisor would sexually harrassing her, making provocative comments about her body and propositioning her. Montelongo complained to Brock about the harassment. The company conducted an investigation but did not inform Montelongo of the outcome. After making the complaint, Montelongo, claims, she was subjected to harassment and retaliation by her new supervisor and male co-workers, and she was wrongly denied a promotion and raise. Montelongo filed a claim with the Texas Workforce Commission alleging sexual harassment and retaliation. When Brock learned of the TWC claim, it placed Montelongo on unpaid leave. Montelongo alleges that due to the harassment and mistreatment, she reached the point that she felt she had no alternative but to leave her employment.

Montelongo received a right-to-sue letter from the TWC and brought this suit against Brock. Brock answered and moved to compel arbitration.

DISCUSSION

Brock contends that the trial court erred in denying its motion to compel arbitration because it proved the validity of the arbitration agreement set forth in its Dispute Resolution Policy and that Montelongo’s claims come within the agreement’s scope. In the trial court, Montelongo opposed the motion with arguments that no valid arbitration agreement existed and alternatively, that the agreement is unenforceable.

I. Standard of Review

*3 We review the trial court’s denial of a motion to compel arbitration for an abuse of discretion. Parker v. Schlumberger Tech. Corp., 475 S.W.3d 914, 922 (Tex. App.—Houston [1st Dist.] 2015, no pet.).

The parties agree that the Federal Arbitration Act governs the Agreement. See In re Provine, 312 S.W.3d 824, 828 (Tex. App.–Houston [1st Dist.] 2009, orig. proceeding).

Whether a valid arbitration agreement exists is a legal question. Valerus Compression Servs., 417 S.W.3d at 208. “No single provision taken alone will be given controlling effect.” Id.

II. An Arbitration Agreement Exists Between Brock and Montelongo

Brock contends that the trial court erred in denying its motion to compel arbitration based on any of Montelongo’s challenges against the formation of the arbitration agreement. Under contract law, the determination of a meeting of the minds, and thus offer and acceptance, is based on an objective standard. Nat’l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 425 (Tex. 2015) (per curiam).

The strong presumption favoring arbitration arises “only after the party seeking to compel arbitration proves that a valid arbitration agreement exists.” Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex.1995) (per curiam) (orig. proceeding)).

*4 If the party moving to compel arbitration establishes that a valid arbitration agreement encompasses the nonmovant’s claims, the burden shifts to the nonmovant to establish a defense. In re Provine, 312 S.W.3d at 829. Absent a defense, the trial court has no discretion to deny the motion. See id.

A. The circumstances surrounding Montelongo’s execution of the arbitration agreement do not prevent it from binding her to its terms.

Montelongo argued that her “signature is not enough” to show that she agreed to arbitrate her claims because her primary language is Spanish and she did not understand the legal effect of agreeing to arbitration.1 However, absent proof of mental incapacity, 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.” Nguyen Ngoc Giao v. Smith & Lamm, P.C., 714 S.W.2d 144, 146 (Tex. App.—Houston [1st Dist.] 1986, no writ) (holding that party bound by contract he signed despite his inability to read, write, or speak English).

B. Brock was not required to sign the arbitration agreement.

Montelongo also claimed that the arbitration agreement was not binding because it has only her signature and was not signed by a Brock representative. This claim also is unavailing. The FAA does not require parties to sign an arbitration agreement. See DeClaire, 260 S.W.3d at 44). Montelongo does not identify any conduct by Brock that would call its acceptance of the arbitration agreement into question. Thus, this claim does not support the trial court’s denial of Brock’s motion to compel arbitration.

C. The arbitration agreement did not need a conspicuous jury waiver to be valid.

Montelongo attacked the arbitration agreement based on its lack of a conspicuous jury waiver,2 but its absence does not preclude enforcement of the arbitration agreement. “Arbitration is an agreement to resolve disputes out of court in the first instance, not an agreement to waive a particular constitutional right available within the judicial process.” Chambers v. O’Quinn, 305 S.W.3d 141, 149 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). “[A] party ... waives its rights to recourse in the courts” when it enters into an arbitration agreement. Id. An agreement to arbitrate employment-related disputes and waive the right to trial necessarily includes a waiver of the right to trial by jury.

D. The arbitration agreement is not illusory because any modification requires the approval of both parties.

*5 Montelongo also contended that the arbitration agreement is illusory, because the Employee Handbook’s disclaimer provides “that the policies, rules and benefits described in the Handbook are subject to change at the sole discretion of the Company at any time.” The trial court could not properly deny the motion to compel arbitration based on that disclaimer, though, because the Handbook makes clear that the disclaimer does not apply to the arbitration agreement. The handbook sets the Dispute Resolution Policy apart from other policies addressed in the handbook, declaring that it is “a distinct and separate agreement from all other modifiable Company Policy provisions” that “may not be changed or modified by The Brock Group, except with the acceptance of the employee after 60 days’ notice.”

“An arbitration clause is not illusory unless one party can avoid its promise to arbitrate by amending the provision or terminating it altogether.” In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 424 (Tex. 2004) (orig. proceeding) (per curiam)). Brock’s Employee Handbook expressly distinguishes the Dispute Resolution Policy from the other policies it addresses, requiring 60 days’ notice of any proposed change or modification and the employee’s acceptance before it can be made. See id. Because the arbitration agreement’s terms cannot be changed without the consent of both Brock and its employees, it is not illusory.

CONCLUSION

We hold that the trial court erred in denying Brock’s motion to compel arbitration. We therefore reverse the judgment and remand the case for further proceedings consistent with this opinion.

Footnotes

1

Montelongo does not address the significance of the sentence written in Spanish at the beginning of the Dispute Resolution Policy, which instructs her to ask for the policy in Spanish if she was unable to read it in English. Nor does she account for the policy language advising her to consult with a lawyer to better understand the legal consequences of signing the arbitration agreement.

2

The first page of the agreement declares that the parties agree all claims arising out of the employment relationship “shall be resolved only through final and binding arbitration, pursuant to the [FAA], and not by way of court or jury trial.” Montelongo’s complaint ostensibly concerns the lack of conspicuousness, not the lack of content.

Court of Appeals of Texas, Houston (1st Dist.).

Osie RUSH, Appellant

v.

ACE AMERICAN INSURANCE COMPANY, Appellee

NO. 01-18-00402-CV

|

Opinion issued July 9, 2019

On Appeal from the 12th District Court, Grimes County, Texas, Trial Court Case No. 33532

Attorneys & Firms

Stuart F. Lewis, for Osie Rush.

Belinda May Arambula, for Ace American Insurance Company.

Panel consists of Chief Justice Countiss.

MEMORANDUM OPINION

Julie Countiss, Justice

*1 Appellant, Osie Rush, challenges the trial court’s judgment, rendered after a jury trial, in favor of appellee, Ace American Insurance Company (“Ace”), in Rush’s suit for judicial review of the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (“DWC”).1 In three issues, Rush contends that the trial court erred in granting Ace a directed verdict and excluding certain evidence.

We affirm.

Background

Rush claimed that, on November 4, 2013, he sustained an electrical shock injury in the course and scope of his employment at Trinity Industries, Inc. (“Trinity”). Following a benefit review conference,2 the DWC held a contested case hearing on June 25, 2015 (the “June 25, 2015 hearing”)3 to determine (1) whether Rush’s compensable injury4 sustained on November 4, 2013 extended to and included “a tendinosis and a partial thickness tear of the right shoulder[,] and memory loss” and (2) whether Rush sustained disability5 resulting from his November 4, 2013 injury, and if so, for what period of time. The hearing officer found:

1. Rush’s “tendinosis and ... partial thickness tear of the right shoulder[,] and memory loss were neither caused nor aggravated and did not raise out of or naturally flow from [his] compensable injury of November 4, 2013[ ]”;

2. “The preponderance of the evidence [was] contrary to Dr. Carter’s opinion on extent of injury[ ]”; and

3. Rush “did not establish that he was unable to obtain and retain employment at wages equivalent to his pre-injury wage as a result of [his] compensable injury of November 4, 2013 during the period beginning November 5, 2013 and continuing through the date of the June 25, 2015 hearing.”

The hearing officer then concluded that Rush’s “compensable injury of November 4, 2013 d[id] not extend to and include a tendinosis and a partial thickness tear of the right shoulder[,] or memory loss” and Rush did not sustain “disability resulting from the November 4, 2013 compensable injury during the period [of time] beginning [on] November 5, 2013 and continuing through the date of the June 25, 2015 hearing.”6 Rush appealed the hearing officer’s decision to an administrative appeals panel.7 On September 28, 2015, the appeals panel upheld the hearing officer’s decision.

*2 Following a second benefit review conference,8 the DWC held another contested case hearing on April 13, 2016 (the “April 13, 2016 hearing”)9 to determine (1) whether Rush’s “compensable injury of November 4, 2013 extend[ed] to and include[d] bilateral carpal tunnel syndrome”; (2) whether Rush had “reached maximum medical improvement,”10 and if so, when; (3) Rush’s impairment rating;11 and (4) whether Rush sustained disability resulting from the November 4, 2013 compensable injury during the period of time beginning on June 26, 2015 and continuing through the date of the April 13, 2016 hearing. The hearing officer found:

1. Rush’s “[b]ilateral carpal tunnel syndrome was not caused by, and did not naturally flow from [his] November 4, 2013 compensable injury[ ]”;

2. “Dr. Bajwa certified that [Rush] reached maximum medical improvement on April 9, 2014 with a 0% impairment rating; his certification [was] not contrary to the preponderance of the other medical evidence[ ]”; and

3. Rush’s “November 4, 2013 compensable injury was not a cause of [his] inability to obtain and retain employment at wages equivalent to his pre-injury wage during the period from June 26, 2015 through the date of the [April 13, 2016] hearing.”

The hearing officer thus concluded that Rush’s “compensable injury of November 4, 2013 d[id] not extend to and include bilateral carpal tunnel syndrome”; Rush reached maximum medical improvement on April 9, 2014; Rush’s “impairment rating [was] 0%”; and Rush did not sustain disability resulting from the November 4, 2013 compensable injury during the period of time beginning on June 26, 2015 and continuing through the date of the April 16, 2016 hearing.12 Rush appealed the hearing officer’s decision to an administrative appeals panel.13 On July 15, 2016, the appeals panel upheld the hearing officer’s decision.

Rush then appealed the administrative appeals panels’ decisions to the trial court.14 In his first amended petition, Rush alleged that on November 4, 2013, he worked as “a burner” for Trinity at its facility in Navasota, Texas. According to Rush, as part of his job, he “operated a computerized machine which fabricated large metal objects” and frequently “use[d] a portable electrical powered magnet to move [the] large metal objects.” On November 4, 2013, while making a large metal plate, Rush “needed to move the portable electrical [powered] magnet.” He “attempted to cut off the power to the magnet,” but, unknown to him, the magnet remained powered. “At some point, [Rush] attempted with both hands to unplug the electrical [powered] magnet,” and as he grasped the magnet’s plug, he “received a violent electrical shock of 4[4]0 volts.” Rush was “stuck to the strong electrical current for at least [ten] seconds,” and upon freeing himself, he saw “soot on the tips of his fingers and a burn on his left hand and left arm.” Rush then reported his injury to his supervisor and received treatment at a hospital. Upon release from the hospital on the same day of his injury, Rush returned to work at Trinity’s facility. According to Rush, the electrical shock injury that he sustained on November 4, 2013 affected his entire body; it injured his left hand, left arm, neck, shoulders, and head and caused memory loss.

*3 Rush further alleged that on June 2, 2014, his treating doctor15 placed him on “light duty status,” but did not restrict the number of hours that Rush could work at Trinity’s facility. However, on June 23, 2014, Trinity “began sometimes limiting [Rush]’s light duty hours” to forty hours per week, and Rush began receiving partial temporary income benefits until August 20, 2014. On August 21, 2014, Ace suspended Rush’s partial temporary income benefits “based on [its] claim from a peer review report that [Rush]’s compensable injury was limited to an ‘electrical shock injury with subsequent redness to [his] left finger’ and that [Rush] was not disabled in any respect.” Rush continued working his “limit[ed] ... light duty hours” at Trinity’s facility until January 7, 2015. On January 8, 2015, Trinity “effectively laid [Rush] off work and terminated [his] employment.” However, Rush “remained [on] either a light duty or total off work status under the care of his treating doctor for the remainder of 2015” and through April 13, 2016.

According to Rush, at some point following his November 4, 2013 electrical shock injury, he requested the appointment of a designated doctor “to address the issues of disability and extent of injury.”16 On January 2, 2015, Ace reinstated Rush’s temporary income benefits after the designated doctor “found that [Rush]’s compensable injury extended to and included [a] tendinosis, [a] partial thickness bursal surface tear of the right shoulder, and memory loss,” that Rush had been disabled since August 21, 2014, and that Rush’s “current work status was light duty with restrictions.”

Subsequently, Ace sought a post-designated doctor required medical examination report, wherein the doctor opined that Rush’s compensable injury was limited to the “electrical shock injury and subsequent redness to [his] left fifth finger” and that Rush had sustained “no disability at any time.” (Internal quotations omitted.) The parties then attended a benefit review conference on April 27, 2015 and the June 25, 2015 hearing. Thus, Rush alleged that he had exhausted his administrative remedies and was aggrieved by the administrative appeals panel’s confirmation of the June 25, 2015 hearing officer’s determination. And Rush sought a judgment setting aside the decision of the appeals panel and “adopting alternate findings,” including that Rush’s compensable injury of November 4, 2013 extended to and included a tendinosis and a partial thickness tear of the right shoulder, and memory loss, and Rush had sustained “disability resulting from [his] November 4, 2013 compensable injury during the period [of time] beginning [on] June 23, 2014 and continuing through” the June 25, 2015 hearing.

Further, according to Rush, the parties attended a second benefit review conference on February 18, 2016 and the April 13, 2016 hearing. Thus, Rush alleged that he had exhausted his administrative remedies and was aggrieved by the administrative appeals panel’s confirmation of the April 13, 2016 hearing officer’s determination. And he sought a judgment setting aside the decision of the appeals panel and “adopting alternate findings,” including that his compensable injury of November 4, 2013 extended to and included bilateral carpal tunnel syndrome, Rush had not reached maximum medical improvement as of the April 13, 2016 hearing, and Rush had sustained “disability from [his] November 4, 2013 compensable injury during the period [of time] beginning [on] June 26, 2015 [and] continuing through” the April 13, 2013 hearing.

*4 At trial, Rush testified that on November 4, 2013, while working at the Trinity facility as “[a] burner” cutting steel, he received an electrical shock from a portable electrical powered magnet. Rush explained that on that day he needed a large magnet to place “a wire plate on [a] table” and the magnet that he needed to use was old, did not have a safety light, and contained 440 volts. Although Rush believed that the power to the magnet had been turned off, when he went to unplug the magnet he received an electrical shock which “went in [his] right side” and “came out [his] left [side].” Rush was stuck to the magnet for “about a second,” but then freed himself. When he did so, he saw that his fingertip on his left hand was “flat.” Rush went to the office at the Trinity facility to report his injury, and the foreman took him to the hospital later that day. At the hospital, Rush’s heart was tested and he received a bandage.

Rush further testified that, prior to his November 4, 2013 injury, he worked seven days a week and approximately sixty or seventy hours each week. For a week after his electrical shock injury, Rush worked, at the direction of Trinity, in its facility’s office. Gradually, he began working outside of the office and training another employee. Although he was in pain following his injury, he had to “take care of [his] kids.” For the remainder of 2013, he worked twelve hours a day doing “[l]ight duty.”

In January 2014, Rush saw “Dr. Howard” who conducted diagnostic testing, including testing related to Rush’s shoulders, neck, and arms. Howard also restricted Rush’s work activities, including prohibiting Rush from lifting anything heavy. After Howard restricted his ability to work, Rush still continued teaching other employees at the Trinity facility. However, in June 2014, Trinity began only allowing Rush to work forty hours a week. Thus, in June 2014, Rush “started losing money” because Trinity did not permit him to work overtime hours, like he had previously, and Rush began receiving temporary income benefits for his decrease in salary.

According to Rush, prior to his electrical shock injury, he had never had problems with his right shoulder, such as significant pain; problems with his neck, such as pain, decreased mobility, and headaches; problems with his hands or wrists, such as not being able to “pick[ ] up things” and tingling; or memory problems, such as not remembering where he had put “things” down or people’s birthdays. When asked if he felt that his “work injury [had] caused at least a sprain or strain to [his] neck and right shoulder,” Rush responded, “Yes, sir.”

Rush testified that at some point, he went to see “Dr. Carter,” a designated doctor, who was asked to look at a purported shoulder sprain, a tear related to Rush’s right shoulder, memory loss, and Rush’s disability. After Rush saw Carter, his temporary income benefits resumed in January 2015. However, in the summer of 2015, after the June 25, 2015 hearing, Rush stopped receiving benefits.

Rush further noted that he had a surgery on his “rotor cuff” and two other ligaments in his arm, and he had “carpal tunnel surgery” on his right wrist which he paid for himself. Rush explained that he needed to have an additional surgery on his left wrist and his left hand because his fingers “act[ ] up” and “feel like they [are not] alive.” Rush had not has another job since his employment with Trinity was terminated in January 2015. Rush testified that he was “disabled” from June 23, 2014 until April 13, 2016.

In summation, Rush testified that after his electrical shock injury he had a cervical strain injury, a right shoulder strain injury, and memory problems, and he had surgery on his wrist and shoulder because of his electrical shock injury. Further, Rush stated that he needed an additional surgery on his left wrist. According to Rush, he had not reached “full maximum improvement” because he could “get better.”

*5 During Rush’s testimony, the trial court admitted into evidence, without objection, Rush’s medical records from the hospital where he was treated on November 4, 2013. The records state that Rush arrived at the hospital six hours after receiving a shock while “unhooking an electrical wire.” Rush had “some stiffness [or tightness] and pain in [his] left hand” and “slight redness of [his] small finger,” but no blistering. His “[c]hief [c]omplaint” was “evaluation of electrical burn, from electrical shock,” he had “[n]o associated symptoms,” his “[m]aximum severity of pain [was] rated as 5/10,” and his “[c]urrent severity of pain [upon arrival at the hospital was] rated as 2/10.” Rush described his pain as dull and intermittent related to his left hand. Rush’s pulse, blood pressure, and respiratory rate were normal. Rush appeared alert and cooperative; his skin color was normal. The “[i]nspection findings” related to Rush’s skin state: “[B]urn, to [lef]t [h]and, [t]enderness w/o signs of skin burn”; and the “[i]nspection findings” related to his left hand state: “[S]welling, to [lef]t 5th finger.” Further, the medical records state that there was “no tenderness” to Rush’s neck, the “range of motion [was] normal, [with] no costovertebal angle tenderness” related to his back, and his “[m]otor strength [was] normal, [the] [s]ensation [was] intact, and [the] [r]adial pulse [was] normal,” with “some tenderness on palpation of the ulnar side of the left hand and the left small finger” related to his upper extremities. The results from Rush’s electrocardiogram were normal. Rush was discharged from the hospital the same day, and the nursing notes stated that he was “in no apparent distress” and denying any pain.

After Rush rested his case, Ace orally moved for a directed verdict, arguing that it was entitled to judgment on the issues of extent of injury, disability, maximum medical improvement, and Rush’s impairment rating. The trial court granted Ace’s motion and entered a directed verdict, holding that Rush take nothing in his suit against Ace for judicial review of the decisions of the DWC. Rush filed a motion for new trial, which the trial court denied.

Jurisdiction

As an initial matter, Ace argues that the trial court lacked jurisdiction because Rush did not seek judicial review of the administrative appeals panels’ decisions “within the mandatory forty-five day [dead]line” for filing suit. See TEX. LAB. CODE ANN. § 410.252(a).

Appellate courts must always determine jurisdiction. See Texas Labor Code section 410.252(a), titled “Time for Filing Petition; Venue,” provides:

A party may seek judicial review by filing suit not later than the 45th day after the date on which the division mailed the party the decision of the appeals panel. For purposes of this section, the mailing date is considered to be the fifth day after the date the decision of the appeals panel was filed with the division.

Tex. Mut. Ins. Co., 2019 WL 1495202, at *1, *6. Accordingly, we hold that any purported failure of Rush to comply with the forty-five day deadline found in Texas Labor Code section 411.252(a) did not deprive the trial court of jurisdiction in the instant case.17

To the extent that Ace asserts on appeal that Rush “wholly failed to plead or prove that he timely filed suit” and “limitations should ... result in the dismissal of his case,” we note that statute of limitations is an affirmative defense which must be proven at trial or through a motion for summary judgment. See Moore v. Rotello, 719 S.W.2d 372, 380 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.).

Directed Verdict

*6 In his first issue, Rush argues that the trial court erred in granting a directed verdict that Rush take nothing in his suit for judicial review of the decisions of the DWC because “there was unquestionably some evidence of probative value to support” a finding that Rush’s compensable injury extended to include a cervical strain and a right shoulder strain and that Rush had sustained disability. Further, the date of Rush’s maximum medical improvement and Rush’s impairment rating were “factual issues for the jury to decide.”

We review the trial court’s grant of a directed verdict de novo. City of Keller, 168 S.W.3d at 816 (“Evidence is conclusive only if reasonable people could not differ in their conclusions ....”).

The nonmovant bears the burden of identifying evidence before the trial court that raises a genuine issue of material fact as to each challenged element of his cause of action. See Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 443 (Tex. App.—Dallas 2002, pet. denied).

When a trial court does not specify the basis for a directed verdict, an appellant has the burden of discrediting each independent ground asserted in the directed-verdict motion, and we must affirm if the appellant fails to challenge each of the possible grounds for the trial court’s ruling. See Hopson v. Univ. of Tex. M.D. Anderson Cancer Ctr., No. 01-96-00072-CV, 1997 WL 109956, at *1 (Tex. App.—Houston [1st Dist.] Mar. 13, 1997, no writ) (not designated for publication).

*7 Under the Texas Workers’ Compensation Act, injuries occurring in the course and scope of employment are compensable. In re Tex. Workers’ Comp. Ins. Fund, 995 S.W.2d 335, 337 (Tex. App.—Houston [1st Dist.] 1999, orig. proceeding).

In the trial court, issues regarding compensability or eligibility for benefits may be tried to a jury and are subject to a modified de novo review. See TEX. LAB. CODE ANN. § 410.303.

A. Extent of Injury

In a portion of his first issue, Rush argues that the trial court erred in granting a directed verdict on the issue of whether his November 4, 2013 compensable injury extended to include a cervical strain and [a] right shoulder strain ... from being stuck to and straining to be released from a 440 volt electrical current for several seconds” and his extent-of-injury issue may be established by his own layperson testimony.

A compensable injury is “an injury that arises out of and in the course and scope of employment for which compensation is payable.” carpal tunnel syndrome.” After the June 25, 2015 hearing officer’s decision and the April 13, 2016 hearing officer’s decision were upheld by the administrative appeals panels, Rush sought judicial review of the appeals panels’ decisions related to his extent-of-injury issue.

*8 At trial, after Rush rested his case, Ace moved for a directed verdict, which the trial court granted, on Rush’s extent-of-injury issue, i.e., whether his November 4, 2013 compensable injury extended to include a Tanglewood Homes Ass’n v. Feldman, 436 S.W.3d 48, 68 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (where appellant did not challenge directed verdict on certain issues, he did not provide basis for overturning trial court’s ruling).

In regard to whether Rush’s November 4, 2013 compensable injury extended to include a cervical strain and his right shoulder strain, and there was no evidence that Rush required further treatment for those purported injuries. Notably, Rush, on appeal, does not address any of these potential grounds for the trial court’s directed verdict.

The trial court in its order did not specify the basis for granting a directed verdict on Rush’s extent-of-injury issue. Because Rush had the burden of discrediting each independent ground asserted in Ace’s directed-verdict motion and failed to do so in the instant case, he has waived any error related to the trial court’s directed verdict on his extent-of-injury issue and we must affirm the trial court’s ruling. See Hopson, 1997 WL 109956, at *1.

We overrule this portion of Rush’s first issue.

B. Disability

In another portion of his first issue, Rush argues that the trial court erred in granting a directed verdict on the issue of whether he sustained disability resulting from the November 4, 2013 compensable injury during the period of time beginning on November 5, 2013 and continuing through the date of the April 16, 2016 hearing because he “testified that he had been disabled as a result of his work related injuries during the period between November 5, 2013 and April 13, 2016 [sic]” and “the issue of disability [could] be based on [his] sole testimony.”

Disability means “the inability because of a compensable injury to obtain and retain employment at wages equivalent to the pre[-]injury wage.” Id.

*9 At trial, after Rush rested his case, Ace moved for a directed verdict, which the trial court granted, on Rush’s disability issue, i.e., did Rush sustain disability resulting from the November 4, 2013 compensable injury during the period of time beginning on November 5, 2013 and continuing through the date of the April 16, 2016 hearing. Specifically, Ace argued that it was entitled to a directed verdict on Rush’s disability issue because the issue was “moot” because Rush had “already received ... money” from Ace and had “received ... benefits,” Ace could not “get [the] money [it paid] back,” and Rush reached maximum medical improvement in April 2014, so any finding of disability beyond that date had “no legal significance” and the court would be issuing an advisory opinion.

On appeal, Rush argues that the trial court erred in granting a directed verdict on his disability issue because he “testified that he had been disabled as a result of his work related injuries during the period between November 5, 2013 and April 13, 2016 [sic]” and “the issue of disability [could] be based on [his] sole testimony.” However, Rush failed to address any of the aforementioned bases as a potential ground for the trial court’s directed verdict.

The trial court in its order did not specify the basis for granting a directed verdict on Rush’s disability issue. Because Rush had the burden of discrediting each independent ground asserted in Ace’s directed-verdict motion and failed to do so in the instant case, he has waived any error related to the trial court’s directed verdict on his disability issue and we must affirm the trial court’s ruling. See Hopson, 1997 WL 109956, at *1.

We overrule this portion of Rush’s first issue.

C. Maximum Medical Improvement and Impairment Rating

In the remaining portion of his first issue, Rush argues that the trial court erred in granting a directed verdict on the issues of maximum medical improvement and his impairment rating because any “favorable finding for [Rush] on any part of [his] extent[-]of[-]injury issue would invalidate the only certification of” maximum medical improvement and his impairment rating made in the instant case.

Relevant to this appeal, maximum medical improvement means the earlier of “the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticipated” or “the expiration of 104 weeks from the date on which income benefits begin to accrue.” See Rodriguez, 997 S.W.2d at 253.

In order to obtain impairment income benefits, an employee must be certified by a doctor as having reached maximum medical improvement and must be assigned an impairment rating by a certifying doctor. See Rodriguez, 997 S.W.2d at 253.

*10 As an initial matter, we note that Rush’s assertion that the trial court erred in granting a directed verdict on the issues of maximum medical improvement and his impairment rating appears to be conditioned on this Court finding in his favor on his extent-of-injury issue. In other words, Rush appears to assert that if this Court finds that the trial court erred in granting a directed verdict on the issue of whether his November 4, 2013 compensable injury extended to include a cervical strain and a right shoulder strain, then we must also find that the trial court erred in granting a directed verdict on the issues of maximum medical improvement and his impairment rating. As previously addressed, however, we must affirm the trial court’s directed verdict on Rush’s extent-of-injury issue.

Further, to the extent that Rush argues that the trial court erred in granting a directed verdict on the issues of maximum medical improvement and his impairment rating because the determination of maximum medical improvement and his impairment rating by the certified doctor were “invalid[ ],” Rush failed to present his validity issue to an administrative appeals panel or to the trial court. Under such circumstances, we are prohibited from considering this issue on appeal. See Brewster, 249 S.W.3d at 16.

Additionally, we note that Ace argued that it was entitled to a directed verdict on the issues of maximum medical improvement and Rush’s impairment rating because Rush had not raised his validity issue before the administrative appeals panel. On appeal, Rush fails to address this potential ground for the trial court’s directed verdict.

The trial court in its order did not specify the basis for granting a directed verdict on Rush’s issues of maximum medical improvement and his impairment rating. Because Rush had the burden of discrediting each independent ground asserted in Ace’s directed-verdict motion and failed to do so in the instant case, he has waived any error related to the directed verdict on his issues of maximum medical improvement and his impairment rating and we must affirm the trial court’s ruling. See Hopson, 1997 WL 109956, at *1.

Moreover, Ace also argued that it was entitled to a directed verdict on the issues of maximum medical improvement and Rush’s impairment rating because Rush failed to present contrary evidence from a qualified doctor. On appeal, although Rush appears to argue that the trial court erred in granting a directed verdict on the issues of maximum medical improvement and his impairment rating because such issues could be established by his own layperson testimony, he provides no actual discussion, analysis, or citation to authority to support for his argument. See Barham v. Turner Constr. Co. of Tex., 803 S.W.2d 731, 740 (Tex. App.—Dallas 1990, writ denied) (appellant bears burden of discussing his assertions of error).

*11 We overrule this portion of Rush’s first issue.

Due to our disposition above, we need not address Rush’s second and third issues in which he asserts that the trial court erred in excluding certain evidence. See TEX. R. APP. P. 47.1.

Conclusion

We affirm the judgment of the trial court.

Footnotes

1

See TEX. LAB. CODE ANN. §§ 410.251–.308 (“A party that has exhausted [his] administrative remedies ... and that is aggrieved by a final decision of the appeals panel may seek judicial review ....”).

2

See id. §§ 410.021–.034 (“A benefit review conference is a nonadversarial, informal dispute resolution proceeding ....”).

3

See id. §§ 410.151–.169 (“Contested Case Hearing”).

4

Ace considered Rush’s compensable injury to be an electrical shock injury and subsequent redness of his left fifth finger that occurred on November 4, 2013. See id. § 401.011(10) (“Compensable injury means an injury that arises out of and in the course and scope of employment for which compensation is payable ....” (internal quotations omitted)).

5

See id. § 401.011(16) (“Disability means the inability because of a compensable injury to obtain and retain employment at wages equivalent to the pre[-]injury wage.” (internal quotations omitted)).

6

See id. § 410.169 (“A decision of an administrative law judge ... is final in the absence of a timely appeal by a party”).

7

See id. §§ 410.201–.209 (“Appeals judges, in a three-member panel, shall conduct administrative appeals proceedings.”).

8

See id. §§ 410.021–.034.

9

See id. §§ 410.151–.169.

10

See id. § 401.011(30) (“Maximum medical improvement means the earlier of: (A) the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticipated; (B) the expiration of 104 weeks from the date on which income benefits begin to accrue; or (C) the date determined as provided by [Texas Labor Code] [s]ection 408.104.” (internal quotations omitted)).

11

See id. § 401.011(24) (“Impairment rating means the percentage of permanent impairment of the whole body resulting from a compensable injury.” (internal quotations omitted)).

12

See id. § 410.169.

13

See id. §§ 410.201–.209.

14

See id. §§ 410.251–.308 (“A party that has exhausted [his] administrative remedies ... and that is aggrieved by a final decision of the appeals panel may seek judicial review ....”).

15

See id. § 401.011(42) (“Treating doctor means the doctor who is primarily responsible for the employee’s health care for an injury.” (internal quotations omitted)).

16

See id. § 408.0041; see also id. § 401.011(15) (“Designated doctor means a doctor appointed by mutual agreement of the parties or by the [DWC] to recommend a resolution of a dispute as to the medical condition of an injured employee.” (internal quotations omitted)).

17

We note that Ace concedes in its brief that this Court in Tex. Mut. Ins. Co. v. Chicas, No. 17-0501, ––– S.W.3d ––––, ––––, 2019 WL 1495202, at *1, *6 (Tex. Apr. 5, 2019).

18

We need not decide whether Rush actually complied with the statute of limitations applicable to his suit for judicial review. See TEX. R. APP. P. 47.1; see also TEX. LAB. CODE ANN. § 411.252(a).

Court of Appeals of Texas, Houston (1st Dist.).

JEFFERSON COUNTY, Texas, Appellant

v.

Ellarene FARRIS, Individually and as Personal Representative of the Heirs and Estate of James Farris, Appellee

NO. 01-17-00493-CV

|

Opinion issued December 28, 2018

|

Rehearing Denied February 26, 2019

*817 On Appeal from the 11th District Court, Harris County, Texas, Trial Court Case No. 2005-09580

Attorneys & Firms

Quentin D. Price, STB: 16303740, Jefferson County, District Attorney’s Office, 1085 Pearl Street 3rd Floor, Beaumont, TX 7701, for Appellant

J. Kyle Beale, SBN: 24009892, Aaron M. Heckaman, SBN: 24059920, Bailey Peavy Bailey Cowan Heckaman, PLLC, 440 Louisiana St., Ste. 2100, for Appellee

Panel consists of Justices Caughey.

*818 OPINION*

PER CURIAM

After her husband died from section 89.004 of the Local Government Code. In addition, the County argues that the trial court erred by failing to dismiss the claims for exemplary damages, misuse of personal property, failure to create an asbestos-safety policy, and negligent implementation of policy.

The County raised an additional jurisdictional argument for the first time on appeal: its governmental immunity has not been waived because it did not receive notice of the claim against it within six months of the incident giving rise to the claim occurred, as required by the Tort Claims Act. Both Jefferson County and Mrs. Farris agree that the trial court lacks jurisdiction over any claim for exemplary damages from the County.

We reverse and render judgment dismissing the claim for exemplary damages, and we otherwise affirm the order of the trial court.

Background

From 1969 to 1996, James Farris was an elected judge in Jefferson County with courtrooms in the Jefferson County Courthouse and Jefferson County Courthouse annex. From the late 1970s through the early 1980s, there were renovation and restoration projects in these areas that produced asbestos-containing dust. In addition, some of the materials that the County specified for those projects contained asbestos. Between 1989 and 1991, the County initiated an asbestos abatement project in the courthouse and courthouse annex. Judge Farris retired in 1996, and eight years later, doctors discovered mesothelioma.”

Judge Farris’s widow, Ellarene Farris, filed suit against 39 asbestos-related companies alleging that her husband had been exposed to asbestos at the courthouse, particularly during renovations in the 1970s and 1980s. In 2006, she added Jefferson County as a defendant. The case was transferred to the Multidistrict Litigation Docket (MDL).

Eight years later, the County filed a plea to the jurisdiction arguing that Mrs. Farris had failed to plead or adduce any factual basis to justify a waiver of governmental immunity based on premises liability. The County argued that Mrs. Farris alleged a claim for negligence but did not mention the gross-negligence standard that is the duty owed by an owner to a licensee. The County also argued that its immunity was not waived as a matter of law for claims arising from conditions that *819 predated the 1970 enactment of the Texas Tort Claims Act. Before the court ruled on the plea to the jurisdiction, Mrs. Farris filed her fourth amended petition, specifically pleading that the County’s immunity was waived based on premises liability because the County owed Judge Farris the duty that a private person owes to a licensee on private property and failed to satisfy that duty. In October 2016, the trial court partially granted the plea to the jurisdiction as to any claims based on acts or omissions that occurred before January 1, 1970. The court denied the remainder of the plea. The County did not appeal the trial court’s ruling. See TEX. R. APP. P. 26.1(b).

Four months later, Jefferson County filed an amended plea to the jurisdiction and an amended motion for traditional and no-evidence summary judgment. The County argued for the first time that the Local Government Code required Mrs. Farris to present her claim to the Commissioners Court before filing suit, see TEX. GOV’T CODE § 311.034 (“Waiver of Sovereign Immunity”). The County also argued that the exclusive-remedy provision of the Workers’ Compensation Act was jurisdictional based on the rule that failure to exhaust administrative remedies deprives a court of jurisdiction. The County also argued that claims for punitive damages must be dismissed because the Texas Tort Claims Act did not waive immunity for punitive damages.

In addition, the County again argued that Mrs. Farris had failed to plead a premises liability claim that would fall within the Texas Tort Claims Act. See TEX. CIV. PRAC. & REM. CODE § 101.021(2). Finally, the County filed a supplement to its amended plea to the jurisdiction, attaching additional evidence that was relevant primarily to the workers’ compensation argument.

The trial court denied the request to reconsider its denial of Jefferson County’s prior plea to the jurisdiction. At the hearing, the trial court explained that that the Tort Claims Act did not apply to a claim based on an act or omission that occurred before January 1, 1970, but that it had jurisdiction over premises liability claims for acts or omissions occurring after January 1, 1970. See section 89.004 of the Local Government Code, and the assertion that there was no evidence to support a premises liability claim.1

Jefferson County filed a timely notice of interlocutory appeal.

Analysis

The County’s interlocutory appeal is based on jurisdictional challenges. For the first time on appeal, the County contends that its governmental immunity has not been waived and the trial court lacks subject-matter jurisdiction over the claim because the County did not receive notice of the claim against it within six months of “the day that the incident giving rise to the claim occurred,” as required by the Texas Tort Claims Act (TTCA). section 89.004 of the Local Government Code was a statutory prerequisite to suit and the failure to comply was jurisdictional, (3) Mrs. Farris failed to plead facts or evidence to establish each element of a premises liability claim under the TTCA, (4) the claim for punitive damages is barred by the TTCA, (5) Mrs. Farris failed to plead a claim for use or misuse of tangible personal property, (6) the claim for failure to create an asbestos-safety policy is not permitted under the TTCA, and (7) the claim for negligent implementation of policy is barred by the TTCA as a discretionary act.

The Tort Claims Act provides a limited waiver of governmental immunity and, unless waived, governmental immunity from suit deprives a trial court of subject-matter jurisdiction. Id.

In reviewing a trial court’s jurisdictional ruling, we construe the pleadings in the plaintiff’s favor. Id.

“If there is a gap in jurisdictional facts, the trial court is required to afford the plaintiff an opportunity to amend its pleadings.” id. at 792–94.

I. Tort Claims Act notice

The County argues for the first time on appeal that its governmental immunity has not been waived and the trial court lacks subject-matter jurisdiction over the claim because it did not receive notice of the claim against it within six months of “the day that the incident giving rise to the claim occurred,” as required by the TTCA. *821 Tex. Ass’n of Bus., 852 S.W.2d at 443–45.

The County contends that the notice was due within six months of Judge Farris’s last exposure to the courthouse in December 1996 and that the failure to give timely notice deprives the court of jurisdiction. Mrs. Farris does not dispute that the County did not receive notice before July 1997. Instead, she contends that the incident giving rise to the wrongful-death and survival claim was Judge Farris’s cancer diagnosis or manifestation of symptoms in late 2004. She thus contends that her written notice delivered on April 4, 2005 satisfied the statute.

There can be more than one “incident giving rise to the claim” for purposes of TEX. GOV’T CODE § 311.034).

“The diagnosis of a malignant asbestos-related condition creates a new cause of action ....” Loutzenhiser, 140 S.W.3d at 356–57.

II. Tort Claims Act premises liability claim

The County argues that the trial court erred by denying its amended and supplemental plea to the jurisdiction because Mrs. Farris failed to plead a premises liability claim under section 101.021 of the TTCA.

The TTCA waives a governmental entity’s immunity for “personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.” State Dep’t of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 237 (Tex. 1992) ). In the absence of willful, wanton, or grossly negligent conduct, a licensee must prove the following elements to establish the breach of duty owed to him:

*822 (1) a condition of the premises created an unreasonable risk of harm to the licensee; (2) the owner actually knew of the condition; (3) the licensee did not actually know of the condition; (4) the owner failed to exercise ordinary care to protect the licensee from danger; (5) the owner’s failure was a proximate cause of injury to the licensee.

City of W. Columbia v. Cornejo Garcia, No. 01-16-00139-CV, 2016 WL 5940481, at *4 (Tex. App.—Houston [1st Dist.] Oct. 13, 2016, no pet.) (mem. op.).

The fourth amended petition was the live pleading at the time the court ruled on the amended plea to the jurisdiction. It alleged that Judge Farris had worked around asbestos-containing materials for many years. The petition further alleged that the County exposed Judge Farris to asbestos-containing materials that were disturbed or installed during the courthouse renovations in the 1970s and 1980s. The petition alleged that the County “knew that asbestos products used in proximity of [Judge Farris] ... contained dangerous and harmful substances,” but the County failed to warn him, instruct him in proper safety precautions, and adopt or enforce a safety plan. It alleged that the County knew that the asbestos-containing products were “dangerous and harmful to human health and that Judge James Farris would not have known of such dangerous properties.” The petition alleged gross negligence. And it alleged that Judge Farris’s exposure to asbestos in the Jefferson County courthouse was foreseen by the County and was a “cause-in-fact” of his injuries and death. The petition specifically stated that the County’s immunity was waived under the TTCA and denied that any statutory exception or exclusion to the waiver of immunity applied.

Under our notice-pleading standard, the fourth amended petition was sufficient to state a claim for premises liability under the TTCA. See 47(a).

The plea to the jurisdiction was combined with a no-evidence motion for summary judgment. For each element of the premises liability claim, the County asserted that the allegations in the petition were conclusory and that the plaintiff had no evidence or had not pleaded specific facts to support each element. The County was not entitled to challenge the court’s jurisdiction by way of a no-evidence motion for summary judgment or a plea to the jurisdiction that argued that Mrs. Farris had no evidence. Miranda, 133 S.W.3d at 228 (when evidence is submitted on a plea to the jurisdiction, the procedure mirrors a traditional motion for summary judgment). Thus, we conclude that the trial court did not err by denying the plea to the jurisdiction on this ground.

III. Exclusive-remedy provision of the Workers’ Compensation Act

The County contends that the trial court erred by denying its plea to the jurisdiction on the ground that Mrs. Farris’s claim is barred by the exclusive-remedy provision of the Texas Workers’ Compensation Act (TWCA).

“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary ... for the death of or a work-related injury sustained by the employee.” id. at 354 (employers who provide workers’ compensation “are immunized from negligence liability for workplace injuries to their employees”).

Governmental immunity encompasses both immunity from liability and immunity from suit. City of Bellaire v. Johnson, 400 S.W.3d 922, 924 (Tex. 2013) (per curiam).

In the trial court and on appeal, the parties have disputed whether the exclusive-remedy bar is an affirmative defense or whether it is a jurisdictional matter. Because immunity from liability and immunity from suit are coextensive in this case, it does not matter whether the exclusive-remedy bar is raised by a traditional motion for summary judgment or by a plea to the jurisdiction. In both scenarios, the County bears the burden to produce evidence establishing its entitlement to the exclusive-remedy bar. See Garcia, 372 S.W.3d at 635 (“If a fact issue exists, the trial court should deny the plea.”).

A political subdivision, such as a county, is required to “extend workers’ compensation benefits to its employees” through an insurance policy, by self-insurance, or by an “interlocal agreement with other political subdivisions providing for self-insurance.” TEX. LAB. CODE § 504.011; see also id. § 504.001(3) (defining political subdivision to include a county). When the employer is a political subdivision, an “employee” for the purpose of workers’ compensation is either “(A) a person in the service of a political subdivision who has been employed as provided by law; or (B) a person for whom optional coverage is provided under Section 504.012 or 504.013.” Id. § 504.001(2). A county extends optional coverage by “majority vote of the members of the governing body of a political subdivision,” i.e., the commissioners court, and optional coverage may be extended to an elected official. See id. § 504.012.

In its amended plea to the jurisdiction, the County argued for the first time that Mrs. Farris’s claims were barred by the exclusive-remedy bar. It supported the plea with evidence that in December 1977 the Commissioners Court passed a resolution electing “to provide Voluntary Workers’ Compensation for all elected officials in Jefferson County, Texas.” The County also provided evidence establishing that between 1989 and 1998, two years after Judge Farris retired, the County participated in an interlocal agreement, providing workers’ compensation by contributing to a fund.

The County contends that this evidence established the applicability of the exclusive-remedy bar as a matter of law. In making this argument, the County asserts that it was providing workers’ compensation benefits to Judge Farris at the time of his retirement, and that his “retirement sets the date for when coverage and the identity of his employer must be analyzed.” Under the TWCA: “If an injury is an occupational disease, the employer in whose employ the employee was last injuriously exposed to the hazards of the disease is considered to be the employer of the employee under this subtitle.” § 406.031 by reference).

The County has not provided evidence about the last date of Judge Farris’s injurious exposure to asbestos. The evidence in the appellate record indicates that Judge Farris’s exposure was connected to at least four different time periods: (1) when the courthouse and the annex were originally built using asbestos-containing materials, 1932 and 1954 respectively, (2) when the renovation took place, allegedly disrupting the asbestos-containing materials and creating copious amounts of dust in the buildings and Judge Farris’s courtroom, approximately 1977 to 1982, (3) when the asbestos-abatement work occurred, around 1989, and (4) when he retired in 1996.

The County’s evidence established that it elected in 1977 to provide coverage to elected officials. Section 504.012 provides for an election to provide optional coverage, but nothing in the statute requires the election to be irrevocable. The County has not provided evidence about whether this *825 election continued throughout the following two decades.

Because the County’s evidence failed to establish its entitlement to the exclusive-remedy bar as a matter of law, we conclude that the trial court did not err by denying the plea to the jurisdiction.

The County also advances a statutory argument in favor of the applicability of the exclusive-remedy bar. Relying on id.

As a corollary to its argument that Mrs. Farris’s claims are barred by the exclusive-remedy provision, the County also argues that the trial court should have dismissed the case because Mrs. Farris failed to exhaust administrative remedies under the TWCA. But because there are fact issues regarding workers’ compensation coverage, the trial court did not err by denying the plea to the jurisdiction for failure to exhaust administrative remedies, nor did the court err by denying the plea to the jurisdiction based on the exclusive-remedy bar.

IV. Presentation under Local Government Code section 89.004

The County argues that Mrs. Farris’s claim is barred because she did not present her claim to the Commissioners Court of Jefferson County 60 days before filing suit against it, as required by section 89.004 is not a jurisdictional statutory prerequisite to her claim, which is brought under the Tort Claims Act. She also contends that the County has waived its right to seek abatement so that the claim can be presented to the Commissioners Court by litigating this case for more than a decade without raising the issue.

The current version of section 89.004 of the Local Government Code appears in Chapter 89, entitled “General Provisions Relating to County Administration,” and it provides for “Presentation of Claim”:

(a) Except as provided by Subsection (c), a person may not file suit on a claim against a county or an elected or appointed county official in the official’s capacity as an appointed or elected official unless the person has presented the claim to the commissioners court and the commissioners court neglects or refuses to pay all or part of the claim before the 60th day after the date of the presentation of the claim.

(b) If the plaintiff in a suit against a county does not recover more than the commissioners court offered to pay on presentation of the claim, the plaintiff shall pay the costs of the suit.

(c) A person may file a suit for injunctive relief against a county. After the court’s ruling on the application for temporary injunctive relief, any portion of the suit that seeks monetary damages shall be abated until the claim is presented to the commissioners court and the commissioners court neglects or refuses to pay all or part of the claim by *826 the 60th day after the date of the presentation of the claim.

TEX. LOC. GOV’T CODE 89.004. A version of the presentment requirement has been part of Texas law since 1895.3

The Supreme Court and this court previously have held that the presentment requirement is not jurisdictional. See Brown v. Owens, 674 S.W.2d 748, 751 (Tex. 1984) ).

In 2005, and in response to section 311.034 of the Code Construction Act, adding the last sentence:

Waiver of Sovereign Immunity

In order to preserve the legislature’s interest in managing state fiscal matters through the appropriations process, a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language. In a statute, the use of “person,” as defined by Section 311.005 to include governmental entities, does not indicate legislative intent to waive sovereign immunity unless the context of the statute indicates no other reasonable construction. Statutory prerequisites to a suit, including the provision of notice, are jurisdictional requirements in all suits against a governmental entity.

TEX. GOV’T CODE § 311.034 (emphasis supplied).

In Id.

The parties in this case dispute the first component—identification of the relevant statutory language. The County argues that the relevant statutory language can appear in any statute that applies to the governmental entity in question. The County relies on a statement in Colquitt v. Brazoria County:

After our decision in TEX. GOV’T CODE § 311.034).

Id. at 541–43.

The County also relies on Chatha.

Finally, the County asserts that 28 U.S.C. § 2675.

Chapter 89 of the Local Government Code, relied upon by the County, is entitled “General Provisions Relating to County Administration.” Id.

In contrast, Chapter 101 of the Civil Practice and Remedies Code is entitled “Tort Claims.” See Green v. City of Houston, No. 01-14-00808-CV, 2015 WL 1967582, at *2 (Tex. App.—Houston [1st Dist.] Apr. 30, 2015, no pet.) (mem. op.).

We conclude that the statutory prerequisites for this suit are found in the Tort Claims Act, not in Local Government Code section 89.004. Because we have concluded that the Chapter 89 presentment requirement was not a statutory prerequisite, we hold that the trial court did not err by denying the plea to the jurisdiction on this basis.

V. Exemplary damages

The County argues that the trial court erred by not dismissing the claim for punitive damages. Mrs. Farris agrees that punitive damages are not available under the TTCA. Because the TTCA “does not authorize exemplary damages,” we sustain the argument and render judgment dismissing the claim for punitive damages from the County. See TEX. CIV. PRAC. & REM. CODE § 101.024.

VI. Use of tangible personal property

The County argues that the trial court should have dismissed the claim based on the absence of use or misuse of tangible personal property. In its amended plea to the jurisdiction, the County stated, “Plaintiff has no claim for use or misuse of personal property.” It argued that a claim cannot be “both a premises defect claim and a claim relating to a condition or use of tangible property.” See Sampson, 500 S.W.3d at 389. This is essence of Mrs. Farris’s claim: tangible personal property (asbestos-containing materials) created a dangerous condition of the premises (the courthouse and annex). We agree that Mrs. Farris did not state a claim for use or misuse of tangible personal property—not because her pleading is deficient, but because she chose to proceed on a premises liability theory.

Because she did not plead a claim for the use or misuse of tangible personal property under the TTCA, the trial court did not err by denying the plea to the jurisdiction on this basis.

VII. Policy claims

The County contends that the trial court should have dismissed the claims for failure to create a policy regarding asbestos safety and for negligent implementation of *829 policy. Mrs. Farris responds that she does not have separate claims for failure to create an asbestos-safety policy and failure-to-implement policy. She contends that these allegations were part of her premises liability claim.

We agree. The allegations that the County challenges were in separately numbered paragraphs under the subheading, “Count Three.” Count Three set out the TTCA claim against the County. Paragraph 23 alleged that the County “failed to timely adopt or enforce a safety plan and method of handling asbestos containing products.” (Emphasis supplied.) Paragraph 26 alleged that the County was “grossly negligent in implementing its policy decision to renovate” the courthouse, and that the “gross negligence includes Defendant, Jefferson County’s operational level decisions, such as using, installing, and disturbing asbestos-containing materials that it knew were dangerous.” These allegations pertain to the elements of the premises liability claim. Because we conclude that these are not separate claims, we hold that the trial court did not err by not dismissing them.

Conclusion

We reverse the order of the trial court in part, rendering judgment dismissing any claim for exemplary damages, and we affirm the remainder of the trial court’s order.

Justice Jennings, concurring.

CONCURRING OPINION

Terry Jennings, Justice

[Judge James] Farris, who was 72 when he died, spent almost his entire legal career[, until retiring in 1996,] in the Jefferson County courthouse[, where he was allegedly exposed to asbestos fibers during a period of remediation] ....

....

“He had just given a speech in Idaho in October 2004,” Ellarene Farris said. “He came home and said he couldn’t do it any more. He went into the hospital and nine days later, he was dead.”

She said her husband had no idea he suffered from cancer of the lining of the lungs. The symptoms began as an abdominal pain that wouldn’t quit and ended soon after with a struggle to breathe.[1]

I join the majority opinion. However, I write separately to note the irrationality of the argument of appellant, Jefferson County, Texas, that the wrongful death and survival action of appellee, Ellarene Farris, against it should be dismissed for failure to provide “timely” notice in 1997 of a non-existent claim.

The Texas Tort Claims Act waives governmental immunity to suit in certain specified circumstances. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 101.021–.29 (Vernon 2011). And the statute provides:

A governmental unit is entitled to receive notice of a claim against it under this chapter not later than six months after the day that the incident giving rise to the claim occurred. The notice must reasonably describe:

(1) the damage or injury claimed;

(2) the time and place of the incident; and

*830 (3) the incident.

Id. Univ. of Tex. Sw. Med. Ctr. at Dall. v. Loutzenhiser, 140 S.W.3d 351, 356 (Tex. 2004) ).

Judge Farris died of TEX. CIV. PRAC. & REM. CODE § 101.101(a).

Based on Jefferson County’s logic, Judge Farris would have been required to provide it with notice of a premature and speculative claim within six months of December 1996. See Childs, 974 S.W.2d at 33 (accrual of damages in latent-disease cases not until “plaintiff’s symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice”).

Here, as previously explained by the Texas Supreme Court, Judge Farris’s exposure to asbestos in the Jefferson County courthouse and annex “was only an incident—one of two—giving rise to [any] claim” he might have against Jefferson County. Id. at 356. The court explained:

The Medical Center argues that “the incident giving rise to the claim” was the CVS, but the CVS was only an incident—one of two—giving rise to the claim. The other such incident, and one equally necessary to the existence of the claim, was [the child’s] live birth. If the notice period ran from the CVS, the statute required notice of a nonexistent claim. [ ]Courts should not read a statute to create such an absurd result.[ ] We decline to do so here when there is a *831 reasonable alternative construction of the statutory language. Because [the child’s] live birth was an incident giving rise to his claim, and one essential to the existence of the claim, we hold that the six-month period for giving notice began when [the child] was born.[2]

Id. at 356–57 (internal quotations omitted).

As in section 101.101(a)’s notice period must run from the date that Judge Farris’s injuries and damages arose, nine days before his death. Because Judge Farris had not suffered any damage or injury, and did not even arguably have a claim against Jefferson County, until nine days before his death, notice in this case was timely provided.

Footnotes

* We withdraw our opinions and judgment dated August 31, 2018 and issue this substitute opinion.
1 The trial court also denied the motions for summary judgment based on contributory negligence, limitations, and no evidence of premises liability.
2 The County’s plea to the jurisdiction evidence consisted of: an affidavit from the director of the County’s engineering department establishing that the courthouse and the annex were built before 1970, minutes from a 1977 Commissioners Court meeting calling for a bond election to finance the renovations that occurred in the late 1970s and early 1980s, a local newspaper article in which plaintiff’s counsel stated that it would be hard to prove the case due to the long latency period and near impossibility of finding another similarly situated person, 1989 Commissioners Court meeting reports regarding asbestos inspection and abatement, contracts for the asbestos inspection and abatement, a letter from the contractor regarding compliance with state and federal regulations, a 1977 Commissioners Court resolution to provide workers’ compensation benefits to elected officials, and seven documents regarding the County’s participation in an interlocal agreement to provide self-funded workers’ compensation insurance from 1995–97.
3 See Act of May 25, 2003, 78th Leg., R.S., ch. 1203, § 1(a), 2003 Tex. Gen. Laws 3418, 3418 (codified at Anderson v. Ashe, 99 Tex. 447, 90 S.W. 872, 874 (1906) (quoting then-current statute, Article 790, Rev. St. 1895, as follows: “No county shall be sued unless the claim upon which such suit is founded shall have first been presented to the county comissioners’ court for allowance, and such court shall have neglected or refused to audit and allow the same or any part thereof.”).
1 Dan Wallach, Death Suit Blaming Asbestos in Jefferson County Courthouse Could End, BEAUMONT ENTER. (Sept. 12, 2016, 9:45 AM), https://www.beaumontenterprise.com/news/article/Death-suit-blaming-asbestosin-Jefferson-County-9217178.php (emphasis added) (Exhibit 3 to Jefferson County’s Amended Plea to the Jurisdiction and Amended Motion for Summary Judgment and Amended No Evidence Motion for Summary Judgment).
2 The baby, until born, legally had no claim because of “the longstanding common law rule ... that the rights of a fetus [are] contingent on live birth.” Univ. of Tex. Sw. Med. Ctr. at Dall. v. Loutzenhiser, 140 S.W.3d 351, 356 (Tex. 2004) (second alteration in original) (internal quotations omitted).

Court of Appeals of Texas, Houston (1st Dist.).

Raul Amparo Zuniga RODRIGUEZ and Ana Maria Ortiz Martinez, Individually and as Personal Representatives, and Heirs of the Estate of Raul Amparo Zuniga Ortiz Jr., and Juana Guadalupe Martinez, as Next Friend of Sebastian Zuniga and Wendy Zuniga, Heirs of the Estate of Raul Amparo Zuniga Ortiz Jr., Appellants

v.

Conway WAAK Jr. and Marlene Waak, d/b/a Carmine Charolais Ranch, and Carmine Charolais Ranch, Appellees

NO. 01-17-00755-CV

|

Opinion issued August 21, 2018

|

Rehearing En Banc Denied December 31, 2018

*573 On Appeal from the 155th District Court, Fayette County, Texas1, Trial Court Case No. 2014V-262, Hon. Jeff R. Steinhauser, Judge

Attorneys & Firms

James C. Marrow, Hogan & Hogan, 711 Louisiana, Suite 500, Houston, Texas 77002, for Appellants.

Stewart K. Schmella, LANZA LAW FIRM, PC, 4950 Bissonnet, Houston, TX 77401, for Appellees.

Panel consists of Justices Higley.

OPINION

Evelyn V. Keyes, Justice

Raul Amparo Zuniga Rodriguez, Ana Maria Ortiz Martinez, and Juana Guadalupe *574 Martinez (the Zunigas) filed suit against Conway Waak, Jr. and Marlene Waak, asserting claims arising from the death of Raul Amparo Zuniga Ortiz, Jr. (Zuniga). The Waaks sought summary judgment, arguing that the Zunigas’ claims were governed by the Farm Animal Activities Act (FAAA or the Act).2 The trial court granted summary judgment in full, holding the Zunigas’ claims were barred by the Act. In three issues on appeal, the Zunigas argue that the Act does not bar their claims.

We reverse and remand.

Background

The Waaks own a ranch in Fayette County, Texas. They breed, raise, and sell purebred Charolais and Braford cattle on the ranch. Both have worked with cattle their entire lives.

Zuniga began working for the Waaks in 2005. He moved onto the ranch and began working for the Waaks full time in 2007 or 2008. His responsibilities involved feeding, moving, and monitoring the cattle. He frequently performed those duties alone.

Zuniga died on October 2, 2013. The day before he died, the Waaks instructed Zuniga to move some cattle to a different pasture. Conway Waak asked Zuniga if he needed help. Zuniga said he did not. There were about twenty cattle to be moved, including one calf and one bull. The bull had been with the cows to breed for about two to three months. On October 2, Zuniga began to move the cows to a different pasture. Zuniga had moved all of the cows except for the bull, the calf, and the calf’s mother before he was eventually found dead from severe blunt-force impact wounds determined to have been caused by the bull.

The Waaks did not carry workers’ compensation insurance for their employees. The Zunigas brought suit against the Waaks to recover damages for Zuniga’s personal injuries and death. In their live petition, the Zunigas asserted wrongful death and survival claims. Specifically, the family asserted that the Waaks were negligent by failing to provide proper safety equipment and failing to adequately warn Zuniga of dangers existing on the premises, among other things.

The Waaks eventually filed a partial motion for traditional summary judgment. In it, the Waaks argued that the FAAA—which provides liability protection for injuries arising out of certain farm activities in the form of a waiver of liability—applied to Zuniga as an employee of the ranch and thereby governed the Zunigas’ claims and waived the Waaks’ liability to the Zunigas. The Waaks recognized in the motion that the Act has exceptions to the waiver of liability. They asked the court to grant summary judgment on the Zunigas’ claims except to the extent that the claims fell within the exceptions to the FAAA.

In their summary judgment motion, the Waaks acknowledged Dodge v. Durdin, 187 S.W.3d 523 (Tex. App.—Houston [1st Dist.] 2005, no pet.), a case from this Court which held that the Equine Act, the predecessor to the FAAA, did not apply to employees. The Waaks urged the trial court not to adopt the reasoning of the case, critiquing the justifications this Court used to reach our holding. They argued that Zuniga was an independent contractor and, as such, a “participant” engaged in a farm animal activity under the FAAA when he died, and thus their liability for claims for his injuries was waived.

The Zunigas responded to the motion. They argued that Zuniga was an employee *575 of the Waaks. As a result, they urged the trial court to apply the reasoning from this Court in Dodge and to rule that, like the Equine Act, the FAAA does not apply to their claims and does not waive the Waaks’ liability for Zuniga’s injuries. They are, instead, that Zuniga was a “farm and ranch employee” for whom the Waaks were required to maintain workers compensation insurance and did not, subjecting them to the Zunigas’ common law claims.

The trial court ruled that the Zunigas’ claims were governed by the FAAA and that the Act waived the Waaks’ liability to the Zunigas. It granted complete summary judgment in favor of the Waaks on their claims. The Zunigas appealed.

Standard of Review

A summary-judgment movant must conclusively establish its right to judgment as a matter of law. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).

To prevail on a traditional summary-judgment motion asserted under Rule 166a(c), a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

A party moving for traditional summary judgment on a claim for which it does not bear the burden of proof must either (1) disprove at least one element of the plaintiff’s cause of action or (2) plead and conclusively establish each essential element of an affirmative defense to rebut the plaintiff’s cause. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

Applicability of the FAAA

In their first issue, the Zunigas argue that the trial court erred by determining that their claims were waived by the FAAA’s waiver of liability. In their second issue, they argue that Zuniga was not a “participant” in a farm animal activity as that term is defined within the Act, but an employee of the Waaks, and therefore, under Dodge. The third concerns the construction of the Workers’ Compensation Act and its application to this case. All three issues require us to construe the applicable statutes.

A. Standard of Review of Statutory Interpretation

Statutory interpretation is subject to de novo review. Molinet v. Kimbrell, 356 S.W.3d 407, 414 (Tex. 2011).

“A court may not judicially amend a statute and add words that are not implicitly contained in the language of the statute. Only when it is necessary to give effect to the clear legislative intent can we insert additional words into a statutory provision.” Id. at 838–39.

B. The Farm Animals Activities Act

The FAAA was originally known as the Equine Act and waived liability of “equine activity sponsors” and “equine professionals,” among other persons, for damages resulting from dangers or conditions that are an inherent risk of an equine activity. See TEX. CIV. PRAC. & REM. CODE ANN. § 87.001(2-a)(B) (West 2017).

As updated, section 87.003 of the FAAA waives liability against “any person, including a farm animal activity sponsor, farm animal professional, livestock producer, livestock show participant, or livestock show sponsor,” for “property damage or *577 damages arising from the personal injury or death of a participant in a farm animal activity or livestock show if the property damage, injury, or death results from the dangers or conditions that are an inherent risk of a farm animal activity or the showing of an animal on a competitive basis in a livestock show.” Id. § 87.003 (West 2017). Section 87.003 explicitly identifies “dangers or conditions that are an inherent risk of a farm animal activity” to include “the propensity of a farm animal or livestock animal to behave in ways that may result in personal injury or death to a person on or around it,” and “the potential of a participant to act in a negligent manner that may contribute to injury to the participant or another, including failing to maintain control over a farm animal or livestock animal or not acting within the participant’s ability.” Id. § 87.003(1), (5).

Id. § 87.001(1).

“Farm animal activity,” in turn, is defined to include a broad number of activities. See id. § 87.001(3). It includes, for example, training or teaching activities that involve a farm animal, boarding a farm animal, “riding, inspecting, evaluating, handling, loading or unloading a farm animal belonging to another,” and providing medical treatment for a farm animal. Id. § 87.001(3)(B)–(D), (G).

“Farm animal activity sponsor” is defined as including “a person or group who sponsors, organizes, or provides the facilities for a farm animal activity, including facilities for a pony club, 4-H club, hunt club, therapeutic riding program, or high school or college class, program, or activity, without regard to whether the person operates for profit.” Id. § 87.001(4)(A).

“Farm animal professional” is defined as “a person engaged for compensation: (A) to instruct a participant or rent to a participant a farm animal for the purpose of riding, driving, or being a passenger on the farm animal; (B) to rent equipment or tack to a participant; (C) to examine or administer medical treatment to a farm animal as a veterinarian: or (D) to provide veterinarian or farrier services.” Id. § 87.001(5).

“Livestock producer” is defined as “a person who owns, breeds, raises, or feeds livestock animals.” Id. § 87.001(6-a).

“Participant” is defined to mean “with respect to a farm animal activity, a person who engages in the activity, without regard to whether the person is an amateur or professional or whether the person pays for the activity or participates in the activity for free.” Id. § 87.001(9)(A).

Finally, section 87.004 provides certain exceptions to the exemption from liability provided to a “person” defined by section 87.003. See id. § 87.004 (West 2017). In relevant part, it limits the circumstances under which “[a] person, including a farm animal activity sponsor, farm animal professional, livestock show participant, or livestock show sponsor, is liable for property damage or damages arising from the personal injury or death caused by a participant in a farm animal activity or livestock show,” if, among other things, “the person provided the farm animal or livestock animal and the person did not make a reasonable and prudent effort to determine the ability of the participant to engage safely in the farm animal activity ... and determine the ability of the participant to safely manage the farm animal or livestock animal, taking into account the participant’s representations of ability.” Id. § 87.004(2).

*578 C. Zuniga’s Status as a “Participant” Under the FAAA

The parties disputed before the trial court whether Zuniga was a “participant” in a “farm animal activity” for which liability was waived for the Waaks under the terms of the FAAA.

With the statutory terms set out above in mind, we hold that Zuniga was not a “participant” in a farm animal activity as contemplated by the FAAA. First, we observe that the definition of a “farm animal activity sponsor” in section 87.001(4) does not expressly or impliedly include a ranch owner who raises livestock for consumption and employs ranch hands to handle them. A ranch owner, such as the Waaks, could be exempted from liability for the personal injuries and death of a plaintiff, such as Zuniga, under the FAAA only as a “livestock producer,” or “a person who owns, breeds, raises, or feeds livestock animals,” and then only if the plaintiff who was injured or killed was a “participant” in a farm animal activity. See id. §§ 87.001(6-a), (9), 87.003.

We further observe that the definition of a “participant” in a farm animal activity in section 87.001(9) does not include a person employed on a ranch or farm for compensation to perform the activities of a ranch hand, as Zuniga was here. Rather, a participant is clearly defined by the plain meaning of the statute as a person who engages in the activity as “an amateur or professional,” a person who pays for the activity, or a person who participates in a “farm animal activity” for free. A “farm animal professional” is then further defined as “a person engaged for compensation: (A) to instruct a participant or rent to a participant a farm animal for the purpose of riding, driving, or being a passenger on the farm animal; (B) to rent equipment or tack to a participant; (C) to examine or administer medical treatment to a farm animal as a veterinarian: or (D) to provide veterinarian or farrier services.” Id. § 87.001(5).

We “may not judicially amend a statute and add words that are not implicitly contained in the language of the statute.” Jones, 745 S.W.2d at 902. Thus, Zuniga—as a hired ranch hand—was not a “participant” in a farm animal activity, as defined by the FAAA; and, therefore, the FAAA does not apply to this case and waive the Waaks’ liability for the Zunigas’ claims.

Our construction of the FAAA in this case accords with our construction of the predecessor statute, the Equine Act, in Dodge.

In Id. at 526.

We held in Id. at 527–30.

For statutory construction, we focused on the phrase “without regard to whether ... the person pays for the activity or participates in the activity for free” within the definition of “participant.” Id.

We supported our reasoning as to the Legislature’s intent in enacting the Equine Act by reference to the legislative history of the statute and the circumstances under which it was enacted. We observed that a legislative report had cited the negative impact of liability for horses on the tourism industry, which “ ‘ha[d] been adversely affected by the expansion of liability as well as charitable, philanthropic and educational organizations,’ ” and was “silent about any intent to affect the employer-employee relationship.” Id. at 529.

We further reasoned that “the Equine Act lacks express legislative intent to abrogate employer duties as delineated in the Workers’ Compensation Act.” Kroger Co. v. Keng, 23 S.W.3d 347, 349 (Tex. 2000) ).

We specifically observed that the Workers’ Compensation Act allows injured workers whose employers provide workers’ compensation insurance to recover damages without establishing the employer’s fault and without regard to their own negligence; and, in exchange, employees receive “a lower but more certain recovery than would have been possible under the common law.” Kroger, 23 S.W.3d at 349).

We concluded in Id.

Finally, we observed in Id. at 532.

The Waaks urge us to overrule Id. at 530. We decline the invitation.

The most recent case to construe the meaning of “participant” under the FAAA, Id.

On appeal, Young argued that she was not a “participant” in an “equine activity” when she was injured, and, therefore, the Equine Act did not apply to preclude her claims against the stable owners. Id. at 780–81. It reasoned:

The Equine Act is a comprehensive limitation of liability for equine activities of all kinds. The Equine Act applies to all “participants.” A “participant” in an equine activity is defined in the statute as “a person who engages in the activity, without regard to whether the person is an amateur or professional or whether the person pays for the activity or participates in the activity for free.” Under the statute, “ ‘engages in an equine activity’ means riding, handling, training, driving, assisting in the medical treatment of, being a passenger on, or assisting a participant or sponsor with an equine animal.”

Id.

The court of appeals then addressed whether Young was the McKims’ employee and therefore entitled to bring her negligence claims against them, since they had not subscribed to the Workers’ Compensation Act, which would have provided insurance coverage for her injuries, or whether she was an independent contractor and therefore not entitled to workers’ compensation insurance coverage. Id.

The court applied the test established by the Texas Supreme Court to determine whether a worker such as Young was an *582 employee rather than an independent contractor under the facts of the case, namely “whether the employer has the right to control the progress, details, and methods of operations of the work,” and concluded that “the summary-judgment evidence conclusively shows that Young was an independent contractor when [the horse] Jasper kicked her.” Limestone Prods. Distribution, Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) (establishing test) ).

The court reasoned that because Young was not an employee of the stables but rather an independent contractor, she was not excluded as a participant in an equine activity covered by Equine Act Id. at 784.

The Waaks argue in this case that Dodge should be overruled. We reject this argument for two reasons.

First, the FAAA expressly broadened the scope of activities covered by the Equine Act,6 so those portions of the legislative history of the Equine Act that apply to conditions prevailing when that predecessor statute was enacted that are inconsistent with the language of the FAAA were overridden by the amendments to the Act and are moot. See Jones, 745 S.W.2d at 902 (“A court may not judicially amend a statute and add words that are not implicitly contained in the language of the statute. Only when it is necessary to give effect to the clear legislative intent can we insert additional words into a statutory provision.”) (citations omitted).

Second, regardless of whether the Legislature “suggested” its intent to limit the definition of participants under the Equine Act to “consumers of equine activities,” we did not rest our holding in Rodriguez, 547 S.W.3d at 838–39 (“[W]e consider the context and framework of the entire statute and meld its words into a cohesive reflection of legislative intent, [and we] construe statutes so as to harmonize [them] with other relevant laws, if possible.”).

The Waaks’ argument that Johnson, 88 S.W.3d at 732).

We have held that Zuniga was not a participant in a farm animal activity at the time of his death and that, therefore, the FAAA does not bar the Zunigas’ claims. Accordingly, we turn to whether the Zunigas have raised a fact issue as to whether Zuniga was an employee of the Waaks under the terms of the Workers’ Compensation Act, and, if so, whether the Zunigas have raised a fact issue as to every element of their claims against the Waaks, requiring reversal of the summary judgment against them.

*584 D. The Texas Workers’ Compensation Act

The Texas Workers’ Compensation Act (TWCA) provides for elective workers’ compensation insurance coverage of employees by their employers. id. § 406.165 (West 2015).

It is undisputed that three ranch hands were working on the Waaks’ ranch at the time of Zuniga’s death. It is also undisputed that the Waaks did not provide workers’ compensation insurance for these workers. Under the terms of section 406.162,(a)(3)(B)(k) and (ii), the TWCA did not apply to the Waaks if they had fewer than three employees.7 The TWCA also did not apply if the workers were independent contractors. The Waaks concede that one of these three workers was an employee, but they argue that the other two workers, including Zuniga, were independent contractors.

Under TWCA Young, 373 S.W.3d at 782 (holding that Young was independent contractor where she controlled details of her work for stable owners feeding several horses and cleaning stables; stable owners employed at least two other persons to feed Jasper; Young operated independent business which she advertised; and Young was paid per feeding and stall cleaning).

We conclude that, under the TWCA’s plain terms, Zuniga was an employee of the Waaks and entitled to coverage under the TWCA because the summary judgment evidence established that the Waaks employed at least three people to work on the ranch. None of these workers were seasonal or migrant workers subject to different requirements, and none qualified as independent contractors. Thus, Zuniga was an employee of the Waaks for purposes of the TWCA as a matter of law. Moreover, the summary judgment evidence—including the depositions of the Waaks regarding the events on the day Zuniga was killed, the local sheriff’s office report, and the medical examiner’s report—raises fact questions as to whether *585 Zuniga was killed while performing work within the scope of his employment; whether the Waaks owed him a duty of ordinary care as his employers, which they breached; and whether his injuries were proximately caused by the breach. Therefore, the Zunigas have satisfied their burden of proof in avoidance of summary judgment. See Little, 148 S.W.3d at 381.

Accordingly, we sustain each of the Zunigas’ three issues.

Conclusion

We reverse the trial court’s grant of summary judgment and remand the case to the trial court for further proceedings consistent with this opinion.

Justice Higley, concurring in part and dissenting in part.

CONCURRING & DISSENTING OPINION

Laura Carter Higley, Justice

In 2005, this Court incorrectly held that the Farm Animals Activities Act (then called the Equine Act) did not apply to employees. Because the majority upholds this incorrect holding, I respectfully dissent, in part. Because the trial court granted greater relief than was sought in its grant of summary judgment, I also concur in the judgment only, in part.

As the majority observes, Zuniga died from injuries inflicted by one of the Waaks’ bulls. His family sued the Waaks. The Waaks filed a motion for summary judgment, arguing the claims were barred by the Farm Animals Activities Act. Zuniga’s family responded, urging the trial court to adopt this Court’s holding that the Farm Animals Activities Act did not apply to employees.2 See Dodge and granted summary judgment in full, even though the Waaks had moved only for a partial summary judgment.

In their first issue, Zuniga’s family argues the trial court erred by determining their claims were waived by the Farm Animals Activities Act. In their second issue, they argue Zuniga was not a “participant” in a farm animal activity as that term is defined within the act. In their third issue, they argue that there is a fact issue about whether the Waaks were exempt from the application of the Texas Workers Compensation Act. All three of these issues concern the Farm Animals Activities Act and our interpretation of the act’s definition of “participant” in Dodge.

The act originally was known as the Equine Act and waived liability for owners of horses. See CIV. PRAC. & REM. § 87.001(2-a)(B).

Section 87.003 of the act waives liability against any person for damage incurred by “a participant in a farm animal activity or livestock show” when the damage “results from the dangers or conditions that are an inherent risk of a farm animal activity or  *586 the showing of an animal on a competitive basis in a livestock show.” Id. section 87.003. See id. § 87.004.

“Farm animal activity” is defined to include a broad number of activities. See Id. § 87.001(3)(B)–(D), (G).

“Participant” is defined to mean, “with respect to a farm animal activity, a person who engages in the activity, without regard to whether the person is an amateur or professional or whether the person pays for the activity or participates in the activity for free.” Id. § 87.001(9). The parties disputed before the trial court whether Zuniga was a participant.

Only a few courts have construed the meaning of “participant” under the act. The first to do so was the Corpus Christi-Edinburg Court of Appeals. See CIV. PRAC. & REM. § 87.001(9) ).

Next, we construed the meaning of “participant” in Id. at 527–30.

For statutory construction, we focused on the phrase “without regard to ... whether the person pays for the activity or participates in the activity for free” within the definition. Id.

We distinguished the contrary holding in Johnson ], where, in dicta, we stated that Johnston was an independent contractor.”). Further, independent contractors, like employees, get paid for their activities. So this was not a distinction that aided in supporting our construction of the plain language of the provision.

In addition, the definition of participant under the act says the general definition (“a person who engages in the activity”) also applies “without regard to whether the person is an amateur or professional.” Dodge, 187 S.W.3d at 528.

For legislative intent, we observed in Id. at 529.

Since Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 652 n.4 (Tex. 2006).

For consequences of alternative construction, we reasoned in Id.

In 23 S.W.3d at 349. Even so, enacting a new set of statutes is “express legislative action.”

The Legislature knows how to exempt a law’s application to other laws. In fact, the Legislature did just that within the Farm Animals Activities Act. “This chapter does not apply to an activity regulated by the Texas Racing Commission.” Steering Comms. for Cities Served by TXU Elec. v. Pub. Util. Comm’n, 42 S.W.3d 296, 302 (Tex. App.—Austin 2001, no pet.) (applying presumption “that the purposeful inclusion of certain terms in a statute implies the purposeful exclusion of terms that are absent”).

Since Combs, 401 S.W.3d at 629.

It does not lead to an absurd result to exempt injuries sustained from a farm animal from the liability an employer would otherwise face for its employees. Even if there were proof that the Legislature did not intend to include employees in its definition of participants under the act, this is not sufficient. See Choice! Power, 501 S.W.3d at 214 (holding construing plain language of statute to allow attorneys’ fees for individuals and corporations but not for limited partnerships, even if unintentional, did not lead to absurd result).

The most recent case to construe the meaning of “participant” under the act comes from the Fourteenth Court of Appeals. See Id. at 780.

The court “disagree[d] that only consumers of equine activities qualify as participants in equine activities as defined in the Equine Act.” Id.

The court also cited to law in its analysis recognizing that statutes are construed according to their plain meaning without regard to extrinsic sources and that such sources “may not be used to create an ambiguity in a statute.” Fitzgerald v. Advanced Spine Fixation Sys. Inc., 996 S.W.2d 864, 865–66 (Tex. 1999) ).

The court did not reach our reliance on the Workers’ Compensation Act as a basis to hold employees were not participants under the Farm Animals Activities Act. See Id. at 782.

The majority’s holding does not cure the ills of id. § 87.001(9). The majority, then, is substituting a general word that is present in the definition for a defined phrase that is not present and is basing Zuniga’s exemption on this misconstruction.

For support that it can substitute “farm animal professional” for “professional,” the majority relies on the proposition that courts “may not judicially amend a statute and add words that are not implicitly contained in the language of the statute.” Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988). Without explaining its reasoning, the majority is suggesting that the Legislature implicitly meant to write “farm animal professional” when it wrote “professional.”

The Supreme Court of Texas has admonished courts to sparingly apply the rule of finding words or phrases “implicitly contained” in a statute. R.R. Comm’n of Texas v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 628 (Tex. 2011). Accordingly, the majority’s construction of the definition of “participant” is impermissible.

The majority further relies on stare decisis in reaching its decision. As the majority correctly observes, stare decisis allows parties to justifiably rely on our past opinions, which promotes predictability in the law. Mitchell, 276 S.W.3d at 447.

Even so, “the doctrine is not absolute.” Arizona v. Gant, 556 U.S. 332, 348, 129 S.Ct. 1710, 1722, 173 L.Ed.2d 485 (2009) ).

For allowing parties to justifiably rely on our past decisions, I have little reason to believe that many parties have come to rely on our holding. See Dodge as a ground to deny the motion for summary judgment.

For the Legislature modifying the act without changing the definition of “participant,” there is a split of authority on the definition of “participant.” Compare Dodge, 187 S.W.3d at 530.3 We have no reason to believe the Legislature meant for both, conflicting definitions to apply. Accordingly, we cannot construe silence by the Legislature as approving one construction over the other.

Because the plain language of the statute does not support our interpretation in Dodge and hold that employees are not excluded from the definition of “participant” under the Farm Animals Activities Act. As a result, I would overrule Zuniga’s family’s second issue.

In their third issue, Zuniga’s family argues that the Waaks failed to establish as a matter of law that they were exempt from the Workers’ Compensation Act. Because I believe we should no longer draw a distinction between employees and non-employees under the act, I would not need to reach this point.

In their first issue, Zuniga’s family argues that the trial court erred in granting summary judgment on their claims based on the Farm Animals Activities Act. The Waaks moved for partial summary judgment on Zuniga’s family’s claims, arguing the Farm Animal Activities Act governed Zuniga’s family’s claims and waived their liability to Zuniga’s family. The Waaks recognized in the motion that the act has exceptions to the waiver of liability. They *591 did not seek summary judgment on the application of the waivers. Instead, they asked the court to grant summary judgment on Zuniga’s family’s claims except to the extent that the claims fell within the exceptions to the Farm Animals Activities Act. Instead, the trial court granted complete summary judgment on the claims. “A judgment that grants more relief than a party is entitled to is subject to reversal.” Lehmann, 39 S.W.3d at 200. Accordingly, I would sustain Zuniga’s family’s first issue as it applies to the exceptions to waiver of liability under the Farm Animals Activities Act and otherwise overrule the issue.

I would overrule Dodge and reverses the trial court’s summary judgment in whole, I dissent, in part, and concur in the judgment only, in part.

Footnotes

1 The Texas Supreme Court transferred this appeal from the Court of Appeals for the Third District of Texas. Misc. Docket No. 17-9128 (Tex. Sept. 28, 2017); see also TEX. R. APP. P. 41.3 (requiring reviewing court to “decide the case in accordance with the precedent of the transferor court” when courts’ precedents are inconsistent).
2 See TEX. CIV. PRAC. & REM. CODE ANN. §§ 87.001–.005 (West 2017).
3 We note, however, that “the doctrine [of stare decisis] is not absolute.” Marsh USA Inc. v. Cook, 354 S.W.3d 764, 779 (Tex. 2011).
4 We note that Dodge’s status as an employee was not contested. Dodge v. Durdin, 187 S.W.3d 523, 529–31 (Tex. App.—Houston [1st Dist.] 2005, no pet.).
5 The Equine Act defined “equine activity” as:

(A) an equine animal show, fair, competition, performance, or parade involves any breed of equine animal and any equine discipline ...;

(B) equine training or teaching activities;

(C) boarding equine animals;

(D) riding, inspecting, or evaluating an equine animal belonging to another, without regard to whether the owner receives monetary consideration or other thing of value for the use of the equine animal ...;

(E) informal equine activity, including a ride, trip, or hunt that is sponsored by an equine activity sponsor;

(F) placing or replacing horseshoes on an equine animal; or

(G) without regard to whether the participants are compensated, rodeos and single event competitions, including team roping, calf roping, and single steer roping.

section 87.001 of Equine Act, which has since been amended to create FAAA).

6 See the meaning of “equine activity” as defined in the Equine Act, set out in note 4.
7 The parties also discuss the minimum payroll. The statute they are disputing says the Workers’ Compensation Act applies to ranch employees if any of the listed, disjunctive tests are true. TEX. LAB. CODE ANN. § 406.162(a) (West 2015). Because the number-of-employees test applies, we do not need to determine whether the minimum-payroll test also applies.
2 The Austin Court of Appeals, from which this case was transferred, does not have any controlling authority on this matter.
3 Zuniga’s family argues in their reply brief that the Corpus Christi-Edinburg Court of Appeals has since endorsed our holding in id.
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