Court of Appeals of Texas, Austin.
PHI Air Medical, LLC, Appellant
Texas Mutual Insurance Company; Hartford Underwriters Insurance Company; TASB Risk Management Fund; Transportation Insurance Company; Truck Insurance Exchange; Twin City Fire Insurance Company; Valley Forge Insurance Company; Zenith Insurance Company; and Texas Department of Insurance, Division of Workers’ Compensation, Appellees
Filed: December 17, 2020
FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-004940, THE HONORABLE JAN SOIFER, JUDGE PRESIDING
Before Justices Goodwin, Baker, and Kelly
*1 Appellant PHI Air Medical, LLC, appealed the trial court’s judgment in favor of Texas Mutual Insurance Company, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, and Zenith Insurance Company (collectively “the Insurers”). This Court reversed the trial court’s judgment. See PHI Air Med., LLC v. Texas Mut. Ins., 549 S.W.3d 804 (Tex. App.—Austin 2018). The Insurers and the Department of Insurance, Division of Workers’ Compensation appealed, and the Texas Supreme Court reversed this Court’s decision and remanded to this Court. Texas Mut. Ins. v. PHI Air Med., LLC, __ S.W.3d __, 2020 WL 3477002 (Tex. June 26, 2020). PHI then filed a petition for writ of certiorari with the Supreme Court of the United States (SCOTUS).
PHI has now filed an unopposed motion to stay proceedings until after SCOTUS has reviewed the petition. We grant the motion and abate the appeal pending review by SCOTUS. The parties are instructed to notify this Court within thirty days of SCOTUS’s decision regarding whether to grant the petition. Failure to timely comply may result in the case being dismissed for want of prosecution. See Tex. R. App. P. 42.3(b).
Court of Appeals of Texas, Austin.
Alvy CHILDRESS, Appellant
TEXAS MUTUAL INSURANCE COMPANY, Appellee
Filed: August 27, 2020
Attorneys & Firms
Alvy Childress, 3526 Lakeview Pkwy, Suite B #128, Rowlett, TX 75088, pro se.
Mary A. Keeney, Graves, Dougherty, Hearon & Moody, PC, 401 Congress Avenue, Suite 2700, Austin, TX 78701, for Appellee.
Before Chief Justice Rose, Justices Baker and Triana
Jeff Rose, Chief Justice
*1 Pro se appellant Alvy Childress suffered an on-the-job injury in 2015. Appellee Texas Mutual Insurance Company, his workers’ compensation carrier, determined that a torn tendon in his shoulder was not compensable. An administrative law judge (ALJ) with the Texas Department of Insurance, Division of Workers’ Compensation (the Division), held a contested case hearing and agreed with Texas Mutual; her decision was upheld by an Appeals Panel. See Tex. Lab. Code §§ 410.151-.169 (Contested Case Hearing), .201-.209 (Appeals Panel). Childress sought judicial review, see id. §§ 410.251-.308, and the trial court granted summary judgment in favor of Texas Mutual. We will affirm the trial court’s order.
FACTUAL AND PROCEDURAL SUMMARY
Childress owns a steel-fabrication-and-erection business called ACE Fab, and in May 2015, while moving an iron beam weighing between 2,000 and 3,000 pounds, he ruptured his right bicep tendon. Texas Mutual accepted the bicep injury as compensable but determined that a “full thickness tear of his distal supraspinatus tendon” in his right shoulder was “degenerative in nature and not caused or aggravated by the work place injury.” Childress appealed, and on September 27, 2017, the ALJ held a contested case hearing to decide: whether the supraspinatus tear was compensable; whether Childress had reached maximum medical improvement (MMI) and, if so, when; his impairment rating (IR) if he had reached MMI; and whether he had disability starting July 25, 2016.1
In her Decision and Order, the ALJ stated that she had considered Childress’s proffered “letters of causation” from Dr. Cynthia Goodman, Dr. Johann Van Beest, and Dr. Paul Vu, as well as testimony by Dr. Brett Bolte, an expert provided by Texas Mutual. The ALJ summarized Dr. Goodman’s report as opining that “the supraspinatus muscle and tendon are commonly injured when a person attempts to lift a heavy object” and that the “pulling and jerking motion” described by Childress “created the supraspinatus injury, which [Dr. Goodman] characterized as a spontaneous rupture of the flexor tendon in the right upper arm.” She said that Dr. Vu had “described the traction force” that caused that damaged Childress’s right upper arm, “point[ing] to” a September 3, 2015 MRI that identified “a full thickness tear of the distal supraspinatus tendon at its insertion.” However, the ALJ noted, Dr. Vu had not explained how Childress “was able to continue working for 3 months after his date of injury,” nor had the doctor “persuasively explain[ed]” how, if the tear was a pre-existing condition aggravated by the workplace injury, “the condition was enhanced, accelerated, or worsened.” Finally, the ALJ found Dr. Van Beest’s evidence unpersuasive because although he stated that the workplace injury “caused injury to the right shoulder,” his report “limits this damage to a rotator cuff strain, which is not the disputed condition.”
*2 Dr. Bolte, on the other hand, opined that “the right shoulder conditions were degenerative in nature” and not caused or worsened by the workplace injury. He stated that “an acute tear of the supraspinatus tendon would be very painful,” would be “unlikely to go unnoticed for long after an injury,” and would not typically be caused by the kind of injuring event Childress described. The ALJ summarized Childress’s medical records as starting more than three months after the date of injury and as stating that Childress “uses arm normally—concerned about further damage.” She said the first record diagnosed “only a non-traumatic rupture of the bicep tendon” and stated that Childress’s symptoms and pain levels were “mild”; that at the time, Childress told medical staff that he had “full range of motion”; and that an exam confirmed that his range of motion was “intact in all extremities.” The ALJ concluded:
After review, there was no qualified expert opinion evidence, based on reasonable medical probability, which provided a persuasive explanation of the causal link between the mechanism of the compensable injury and the right shoulder full thickness tear of the distal supraspinatus tendon. Thus, it is not part of the compensable injury.
The ALJ noted that although Childress had asserted that he had not reached MMI “because he needs further treatment,” Designated Doctor Clayton Clark determined in September 2016 that Childress had reached MMI on June 22, 2016, and assigned a 1% IR, while Dr. Van Beest determined Childress reached MMI on July 25, 2016, with a 7% IR. However, the ALJ observed that Dr. Van Beest “rated a bicep muscle strain, which is not the compensable injury[, s]o his certification could not be adopted.” She also stated that Childress reached “statutory MMI on August 19, 2017.” See id. § 401.011(30)(B) (MMI is reached no later than two years from date on which income benefits begin to accrue). The ALJ recited that Dr. Clark’s “certification was not contrary to the preponderance of the other medical evidence and is adopted.” The ALJ determined:
The May 2, 2015, compensable injury does not extend to and include a right shoulder full thickness tear of the distal supraspinatus tendon. Claimant reached maximum medical improvement on June 22, 2016. Claimant’s impairment rating is 1%. Claimant had disability beginning on July 25, 2016, and continuing through September 2, 2016, but not from September 2, 2016, continuing through September 27, 2017, the date of the contested case hearing.
After Childress appealed, a Division Appeals Panel issued a notice stating that the ALJ’s decision was final, the effect of which was the ALJ’s Decision and Order became “the final decision of the appeals panel.” See id. § 410.204(c). Childress then sought judicial review, and in his first amended petition stated that he was bringing the suit in his own name and “d/b/a ACE Fab party to this proceeding ... as Employer, Employee and Claimant.” He argued that his supraspinatus tear should be considered part of his compensable injury and that he had not reached MMI; contested the 1% IR; sought disability from June 22, 2016; and asserted claims for breach of contract, negligence, bad faith, and statutory violations.
Texas Mutual filed special exceptions, arguing that ACE Fab was not a party to the administrative proceeding, was not aggrieved by the Appeals Panel’s decision, and had not exhausted its administrative remedies, and asking the trial court to therefore strike ACE Fab’s claims. It also excepted to Childress’s statement that he was seeking to appeal “all portions of the judgment,” arguing that he was limited to challenging the findings and conclusions he contested before the Appeals Panel. See id. § 410.302(b) (suit for judicial review “is limited to issues decided by the appeals panel and on which judicial review is sought”). After a hearing on Texas Mutual’s special exceptions, Childress again amended his petition, dropping ACE Fab as a claimant and asserting that Texas Mutual was liable for negligence for violations of the insurance code and the administrative code. He further argued that Texas Mutual had waived its right to specially object to ACE Fab as a party and stated that his pleadings “will reference Alvy Childress d/b/a ACE Fab only for substance rights to argument and credibility.”
*3 In January 2019, Texas Mutual filed a motion for summary judgment, arguing first that Childress had not stated a claim on which relief can be granted because his amended petition only leveled claims for negligence and violations of various statutes and rules, rather than seeking judicial review of the appeals panel’s final decision. Texas Mutual further contended that it was entitled to dismissal of “all claims brought by or on behalf of the employer, ACE Fab,” because it was not a party to the administrative proceeding, noting that Childress is “both the employer and the injured employee, but the issues before the Appeals Panel pertain only to the employee.” Texas Mutual argued in the alternative that “to the extent [Childress’s] lawsuit seeks judicial review of the final decision” of the Appeals Panel, Texas Mutual was entitled to dismissal of Childress’s claims for negligence and statutory violations because Childress’s suit for judicial review is limited to the issues before the Appeals Panel. It also argued that Childress’s claims for damages beyond workers’ compensation benefits were barred by section 408.001 of the labor code. See id. § 408.001(a) (workers’ compensation benefits are “the exclusive remedy” for employee covered by workers’ compensation insurance who suffers work-related injury). Finally, Texas Mutual asserted a no-evidence motion arguing that Childress could not present evidence: that his supraspinatus tear is compensable; that his MMI was not June 22, 2016, or that his IR is something other than 1%; that Dr. Clark’s certification was contrary to the evidence; or that Childress had a disability sometime after September 2, 2016.
Following a hearing in March 2019, the trial court signed an order granting Texas Mutual’s motion for summary judgment. In its order, the trial court stated that Childress’s second response, second supplemental response, and third supplemental response, all filed on the day of the hearing, were untimely and thus were not considered by the court. It affirmed the Appeals Panel’s decision in its entirety, decreeing that Childress’s compensable injury did not include his supraspinatus tear; that he reached MMI on June 22, 2016, with a 1% IR; that he had disability from July 25, 2016, through September 2, 2016; and that he did not have disability from September 3 forward. This appeal followed.
STANDARD OF REVIEW
A proceeding seeking judicial review from an appeals panel’s decision related to compensability or eligibility for or the amount of benefits is conducted under a “modified de novo” standard. National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 528 (Tex. 2000) (citing Tex. Lab. Code § 410.301(a)); Deleon v. Royal Indem. Co., 396 S.W.3d 597, 600 (Tex. App.—Austin 2010), rev’d on other grounds, 396 S.W.3d 527 (Tex. 2012). The appealing party has the burden of proof by a preponderance of the evidence. Tex. Lab. Code § 410.303; Deleon, 396 S.W.3d at 600; Texas Builders Ins. Co. v. Molder, 311 S.W.3d 513, 518 (Tex. App.—El Paso 2009, no pet.). In conducting such a case:
(1) the trial court is informed of the TWCC Appeals Panel’s decision; (2) evidence of the extent of impairment is limited to that presented to the TWCC, unless the court makes a threshold finding that the claimant’s condition has substantially changed; and (3) the court is required to adopt the specific impairment rating arrived at by one of the physicians in the case.
Molder, 311 S.W.3d at 518; see Deleon, 396 S.W.3d at 600-01 (“Evidence of the extent of impairment is limited to that presented to the Division absent a finding that the claimant’s condition has substantially changed, and the court can only adopt a specific impairment rating arrived at by one of the doctors in the case.”). “The fact finder, although informed of the [appeals panel] decision, does not review it for ‘reasonableness,’ but rather independently decides the issues by a preponderance of the evidence.” Texas Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 531 (Tex. 1995); see Deleon, 396 S.W.3d at 600-01 (fact finder considers administrative decision but need not give it any particular weight, nor is opinion of “designated doctor regarding impairment” given special weight).
We review the trial court’s granting of summary judgment de novo, taking as true all evidence favorable to the non-movant, indulging every reasonable inference in his favor, and resolving any doubts in his favor. First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 219 (Tex. 2017). When a party moves for both traditional and no-evidence summary judgments, we consider the no-evidence motion first because if the non-movant did not produce evidence raising a genuine issue of material fact as to the challenged elements, a no-evidence summary judgment is proper and there is no need to address the challenge to the traditional motion. Id. at 219-20. Any claims that survive the no-evidence review are reviewed under the traditional standard, asking whether the movant proved that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Id. at 220 (citing Tex. R. Civ. P. 166a(c)). “A genuine issue of material fact exists if the evidence ‘rises to a level that would enable reasonable and fair-minded people to differ in their conclusions,’ ” and the evidence must do more than create a mere surmise or suspicion of the fact. Id. (quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).
*4 As for summary-judgment procedure, a non-movant must file his response, along with the evidence on which he seeks to rely, at least seven days before the summary-judgment hearing or obtain the trial court’s leave to file it late. Tex. R. Civ. P. 166a(c), (d). We review a trial court’s ruling on whether to accept a late response for an abuse of discretion. Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 686 (Tex. 2002); Bierwirth v. TIB, No. 03-11-00336-CV, 2012 WL 3239121, at *3 (Tex. App.—Austin Aug. 10, 2012, no pet.) (mem. op.). We also review a trial court’s decisions related to the admission or exclusion of evidence for an abuse of discretion. U-Haul Int’l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012). A trial court abuses its discretion when it acts without reference to any guiding rules or principles. Id.
In Childress’s briefing, he asserts that the trial court erred in refusing to admit certain documents into the record; in not allowing ACE Fab to proceed as a party or bringing its claims for breach of contract or statutory violations; and in affirming the Appeals Panel’s decision, contending that the Decision and Order “is clearly against the great weight and preponderance of the evidence.”2 He asks this Court to render judgment that he has a 7% IR and to declare his date of MMI as July 25, 2016, as recited in a report by Dr. Van Beest, and seems to seek a declaration of disability starting on August 18, 2017. Finally, he asks that we remand the case for the trial court to address his claims for breach of contract and statutory violations.
Texas Mutual filed its motion for summary judgment in January, and the motion was heard by the trial court on March 14. Childress filed his first response on March 6, attaching three hundred pages of exhibits, some of which were his own pleadings, and in contesting his date of MMI or his IR, he states only, “The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist attached herein. This court should take judicial notice of such pleadings attached with attached evidence herein.” On the date of the hearing, he filed two affidavits referring to exhibits that he intended to use for summary judgment and attaching forty-seven pages of documents without any explanation of their relevance.3 He also filed a second response, a second supplemental response, and a third supplemental response. In his second response, Childress stated that his March 6 response had a “clerical error” and asked to amend that error. He also asked for “Leave of Court pursuant to” rule 166a(c) as follows: “DWC 15315468 filed returned incomplete, completed and sent back overnight 3-11-19. DWC 15315468 sent from the Texas Department of Insurance 2-08-18 if necessary, to stand in the shoes of DWC 15315483 resubmitted 3-11-2019.”
*5 Although it is not entirely clear, it appears that Childress is arguing that the underlying administrative record was wrongfully excluded from evidence. However, in the November 2018 hearing on Texas Mutual’s special exceptions, the trial court explained to Childress that to file the administrative record, he had to review and follow the rules of evidence related to governmental documents. It does not appear that Childress arranged to have the record filed in accordance with those rules. Further, it is unclear exactly what evidence Childress wanted admitted and how it would have been necessary to his case.4 See State v. Central Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009) (complaining party must show that exclusion of evidence probably resulted in rendition of improper judgment). On this record, we cannot conclude that the trial court abused its discretion in excluding evidence. We overrule Childress’s arguments related to the trial court’s evidentiary rulings.
ACE Fab as Would-Be Party
Childress complains of the trial court’s rulings barring ACE Fab from proceeding as a party and bringing claims for breach of contract or statutory violations. He insists that ACE Fab could not have been a party to the administrative proceeding because the “Division of Workers Compensation does not have jurisdiction over Contract law” and that it should have been allowed to join the proceeding in the trial court to pursue its non-benefits-related claims. However, the proceeding before the trial court was a suit for judicial review. Such a proceeding is brought by a party “that has exhausted its administrative remedies under this subtitle and that is aggrieved by a final decision of the appeals panel,” Tex. Lab. Code § 410.251, and it is “limited to issues decided by the appeals panel and on which judicial review is sought,” id. § 410.302(b). ACE Fab was not a party to the contested case—that addressed which of Childress’s injuries were compensable, when he reached MMI, the IR that should be assigned, and whether he had disability after September 2, 2016—and is not aggrieved by Childress’s benefits decision. See Just Energy Texas I Corp. v. Texas Workforce Comm’n, 472 S.W.3d 437, 443 (Tex. App.—Dallas 2015, no pet.). ACE Fab’s claims against its insurance carrier for breach of contract or statutory violations were not a part of the contested case, nor could they have been, and they therefore cannot be raised in this suit for judicial review, which has a limited scope. See Tex. Lab. Code § 410.302(b); State Office of Risk Mgmt. v. Martinez, 539 S.W.3d 266, 274 (Tex. 2017) (“issues” identified by administrative review officer “remain the same through hearing, appeal, and judicial review”). Because the trial court could only address compensability, MMI, and IR, it correctly disallowed ACE Fab as a party as well as its contract- and statute-based claims. We overrule Childress’s claims related to ACE Fab as a party.
Affirmance of Appeals Panel Decision
Finally, we consider whether the trial court properly granted summary judgment affirming the Appeals Panel’s decision.
As noted by Texas Mutual in its special exceptions, motion for summary judgment, and appellate brief, Childress’s amended petition seems only to assert a claim for negligence, contending that Texas Mutual knowingly violated provisions of the insurance code, labor code, and administrative code and that as a result, Childress suffered an “under treated, under diagnosed, under documented biceps and shoulder injury which produced by causation the manifestly unjust [ALJ’s] Decision and Order, Independent Injury actual damages, Physical harm on 1-24-17 a new injury as a direct result of one or more of the above stated violations.” He therefore arguably abandoned his request for judicial review of the Appeals Panel’s decision. However, construing his pleadings liberally and in the interest of justice, we will consider whether Texas Mutual showed itself entitled to a summary judgment affirming the Appeals Panel’s order.
*6 Childress, as the party challenging the decision, had the burden of proving by a preponderance of the evidence that the decision should be overturned. See Tex. Lab. Code § 410.303; Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514, 516 (Tex. 2007). The issues before the trial court were whether Childress’s supraspinatus tear was part of his compensable injury; whether he had reached MMI and, if so, when; if he had reached MMI, his IR; and whether he had disability after September 2, 2016, and Texas Mutual’s no-evidence motion required Childress to put on evidence to rebut the Appeals Panel’s decision on those issues.
In the portion of Childress’s summary-judgment response addressing the extent of his compensable injury, he referred to reports by Drs. Van Beest, Goodman, and Vu and stated:
The great weight and substantial medical records, Plaintiff inserts [sic] the four doctors is by all standards have established the burden of proof and should have presumptive weight. Plaintiff asserts this fact has great weight and is controlling. [Texas Mutual’s] argument is plainly erroneous and is inconsistent with the facts. The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist attached herein[.] This court should take judicial notice of such pleadings attached with attached evidence herein.
As to the issues of MMI and IR, Childress stated:
The claimant received improper and inadequate treatment leading to a under diagnosed and under documented bicep’s injury, and shoulder torn tendon. Critical evidence and the factual sufficiency of the evidence presented in relation to; Impairment, MMI. The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist attached herein. This court should take judicial notice of such pleadings attached with attached evidence herein.
Finally, as to disability, Childress referred to a report by Designated Doctor Daniel Lerma in September 2018, which Childress said “disputed” the ALJ’s finding as to disability and which he asserted should be given “presumptive weight.”6 He also stated, “Statutory dates are 6-22-16 to 8-18-17. Material fact. This court should take judicial notice of such pleadings attached with attached evidence herein.” Childress included an affidavit stating that he was attaching 285 pages of records that were “the original records or exact duplicates” and that the records “were made at or near the time of each act, event, condition, opinion, or diagnosis set forth” and were kept as part of ACE Fab’s business records. He then attached over 300 pages of documents, which included his own pleadings; photographs of his arm (apparently taken in 2018); ACE Fab’s sales tax permit; Texas Mutual’s quote for ACE Fab’s workers’ compensation insurance; Dr. Clark’s report; Texas Mutual’s form disputing the compensability of the supraspinatus tear; several pages of medical records with handwritten notes on them; MRI reports and a summary of some of those results; a report made after Childress’s December 2015 surgery to repair his biceps tendon; reports by Drs. Van Beest, Goodman, and Vu; documents showing poor online reviews for Dr. Bolte; Dr. Lerma’s September 2018 Designated Doctor report; and medical records and reports pertaining to a January 2017 injury to his left shoulder.
*7 As our sister court has explained, “When faced with a no-evidence motion for summary judgment, a nonmovant cannot avoid judgment by simply filing voluminous evidence and stating generally that a genuine fact issue has been raised.” Kimbrell v. Memorial Hermann Hosp. Sys., 407 S.W.3d 871, 878 (Tex. App.—Houston [14th Dist.] 2013, no pet.); see also Burns v. Canales, No. 14-04-00786-CV, 2006 WL 461518, at *5–6 (Tex. App.—Houston [14th Dist.] Feb. 28, 2006, pet. denied) (mem. op.) (response to no-evidence motion lacked argument and citation to evidence or authority and attached 122 pages of evidence; “The number of pages, however, is not dispositive. The issue is whether the trial court must search through all of the non-movant’s evidence to determine if a fact issue exists without any guidance concerning what evidence creates an issue on a particular element.”). “Mere reference to attached evidence is insufficient to avoid” a motion for no-evidence summary judgment, and the non-movant “bears the burden to file a written response that raises issues preventing summary judgment, and that points to evidence supporting those issues. Where the nonmovant fails to meet that burden, the trial court is not required to supply the deficiency, but instead must grant the motion.” Burns, 2006 WL 461518, at *5-6.
Although we have attempted to read Childress’s pleadings liberally and with patience, we cannot grant him so much leeway as to give him a procedural advantage we would not extend to a party represented by counsel. See id. at *6; Holt v. F.F. Enters., 990 S.W.2d 756, 759 (Tex. App.—Amarillo 1998, pet. denied). Childress did not present understandable argument as to how there was a genuine issue of material fact, nor did he point to evidence or authority to support any such argument. We must hold, therefore, that Childress did not meet his burden to explain to the trial court how his attached evidence raised a fact issue as to each element challenged by Texas Mutual. See Fagerberg v. Steve Madden, Ltd., No. 03-13-00286-CV, 2015 WL 4076978, at *5 & n.8 (Tex. App.—Austin July 3, 2015, pet. denied) (mem. op.) (in response to no-evidence motions, party made vague statements about effect of deposition testimony that, along with “mere ‘incorporation’ of evidence” without explanation of how it raised fact issue, were insufficient to defeat motions; although attached evidence was not voluminous, non-movant still had burden of raising fact issue, but “not only did he not specify where the court should look to find the asserted material issues of fact, he did not refer to the evidence, attempt to explain how the evidence raised such questions, or otherwise connect the evidence to the challenged elements”); Burns, 2006 WL 461518, at *5-6 (“Burns’s written response to the motion for summary judgment contains no argument, and cites to neither evidence nor authority.”); Cargill, Inc. v. Merit Distrib. Servs., Inc., No. 03-02-00718-CV, 2003 WL 21241642, at *3 (Tex. App.—Austin May 30, 2003, no pet.) (mem. op.) (response to no-evidence motion was insufficient where it listed specific affidavits and asked that they be “filed of record” but “presented no argument or explanation that makes reference to any evidence”). The trial court therefore did not err in granting Texas Mutual’s motion for no-evidence summary judgment, and we overrule Childress’s arguments to the contrary.
Having overruled Childress’s arguments on appeal, we affirm the trial court’s order granting Texas Mutual’s motion for summary judgment.
The supreme court has explained IRs and MMI as follows:
An employee receives impairment income benefits according to the employee’s impairment rating, which is the percentage of the whole body’s permanent impairment. To determine the impairment rating, an examining doctor evaluates the permanent effect of the employee’s injury under statutory guidelines. The doctor expresses the rating as a percentage of permanent impairment to the whole body. The greater this percentage, the greater the amount the employee receives as impairment income benefits....
A doctor will not certify an impairment rating until the employee reaches “maximum medical improvement,” the point at which the employee’s injury will not materially improve with additional rest or treatment. The date of maximum medical improvement is fixed when an examining doctor certifies that no further material recovery or lasting improvement can reasonably be anticipated. The [Workers’ Compensation Act] presumes that maximum medical improvement will be reached not later than two years after income benefits begin to accrue.
Until an employee reaches maximum medical improvement, he or she may receive temporary income benefits. Once an employee reaches maximum medical improvement, temporary income benefits end. Whether the injured employee receives any additional income benefits depends largely on the assigned impairment rating.
Childress’s briefing is somewhat difficult to follow. He states his issues as being: (1) “Did the Trial abuse its discretion by exclusion of critical evidence to prove a fact,” and (2) “Is this a case of First Impression where it set forth a completely original issue of law for a decision by the trial court and did the trial court error prevent appellate from properly presenting the case to the court of appeals.” We will attempt to address Childress’s arguments as fairly and thoroughly as we can, but we must also apply the same rules as we would if he were represented by counsel. See Veigel v. Texas Boll Weevil Eradication Found., Inc., 549 S.W.3d 193, 195 n.1 (Tex. App.—Austin 2018, no pet.).
Childress’s first affidavit refers to “EXHIBITS LIST A-X,” and the second refers to “EXHIBITS LIST, L.” Exhibit L—included in the clerk’s record as having been attached to the affidavit—consists of several documents filed with the Division well after the ALJ’s hearing in September 2017. The clerk’s record does not include Exhibits A through X, and according to Childress’s exhibit list, those exhibits total about 270 pages plus an unspecified number of pages contained in two exhibits described as “Court Records” for two Division cases.
We also note that the trial court was tasked with conducting a de novo review in which the evidence of the extent of impairment is limited to that presented in the administrative case. Deleon v. Royal Indem. Co., 396 S.W.3d 597, 600-01 (Tex. App.—Austin 2010), rev’d on other grounds, 396 S.W.3d 527 (Tex. 2012). It is not clear whether Childress sought to introduce the parties’ competing medical reports, but the ALJ’s opinion, summarizing the content of those reports relevant to Childress’s injuries and impairment, provided the trial court with the information relevant for its de novo evaluation of the issues.
Childress’s main summary-judgment exhibit was a “Claimant Request for Review Tex Lab Code § Sec 415.0211, Emergency Cease and Desist Order,” which he apparently filed with the Division in March 2019. That document includes twenty-two exhibits, along with a list providing a page count (the documents range from one to thirty-three pages long) and a description (such as “Right Bicep,” “Denial,” Interlocutory Order,” “Wage Statement,” “Bolte,” “Added Issues,” and “Response First Supplemental Answer to [Amended] Original”) for each of those exhibits.
In September 2018, the Division assigned Dr. Lerma to examine Childress to determine his “Return to Work Status” from September 2, 2016, through the date of the exam and his “Disability” from October 2, 2017, through the date of the exam. However, the ALJ’s Decision was made after considering a report by Dr. Clark as Designated Doctor, not Dr. Lerma, whose examination occurred about nine months after Childress filed his suit for judicial review. Thus, it appears Childress was granted permission to seek a change to his status, but we have no information about what has transpired in the Division since Dr. Lerma’s exam and report.
Court of Appeals of Texas, Austin.
Rhonda Yvonne DAVILA, Appellant
TEXAS MUTUAL INSURANCE COMPANY, Appellee
Filed: March 12, 2020
FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-18-000354, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING
Attorneys & Firms
Rhonda Yvonne Davila, pro se.
Bryan W. Jones, for Appellee.
Before Chief Justice Triana
Thomas J. Baker, Justice
*1 Appellant Rhonda Yvonne Davila, pro se, filed a suit for judicial review of a final decision of the Texas Department of Insurance, Division of Workers’ Compensation (DWC). Appellee Texas Mutual Insurance Company is the workers’ compensation carrier of Davila’s employer. Texas Mutual filed a no-evidence motion for summary judgment, which the trial court granted after sustaining Texas Mutual’s objections to Davila’s summary-judgment evidence. We will affirm the trial court’s summary judgment.
In April 2016 Davila sustained a compensable work-related injury. Texas Mutual accepted liability for her injury, but a dispute arose between the parties concerning the extent of her compensable injury (i.e., whether it includes Tex. Lab. Code §§ 408.001(a) (“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.”), 413.031 (providing procedures for resolution of medical disputes involving workers’ compensation).
After a contested-case hearing, the administrative law judge (ALJ) issued a decision and order finding that Davila’s compensable injury did not extend to or include lumbar sprain/strain and that she reached MMI on May 19, 2016 with a 0% impairment rating. Davila appealed the ALJ’s order to the DWC Appeals Panel, which affirmed the ALJ’s decision. See id. § 410.202 (providing for appeal of ALJ’s decision to Appeals Panel). Davila then filed this suit for judicial review specifically challenging the DWC’s findings on all three disputed issues. See id. § 410.251 (providing for judicial review of decision of DWC Appeals Panel).
Texas Mutual filed a no-evidence summary-judgment motion. Davila filed a response, attaching several exhibits (A through J) as evidence, much of which appears to be excerpts from the administrative hearing. Texas Mutual filed objections to all of Davila’s exhibits and a motion to strike them, raising several grounds: lack of proper authentication and predicate; hearsay; and failure to meet the “producing cause standard” of causation. Davila did not file a response to Texas Mutual’s objections and motion to strike. At the hearing on the motion to strike and motion for summary judgment, Davila argued that the documents comprising her evidence were “authenticated” because they had stamps at the bottom denoting they had been admitted as exhibits at the administrative hearing. The trial court responded, “because these [documents] were admitted in that administrative hearing does not mean they are authenticated for purposes of Summary Judgment evidence.” Davila’s only response was that, contrary to Texas Mutual’s contention that she had “no evidence” to support her claims, she had “tons of evidence.” Davila did not otherwise respond to Texas Mutual’s evidentiary objections.
*2 In separate orders rendered after the hearing, the trial court (1) sustained all of Texas Mutual’s evidentiary objections without stating the basis of its ruling and struck all of Davila’s summary-judgment evidence from the record, and (2) granted Texas Mutual’s summary-judgment motion.
On appeal, Davila contends that (1) the trial court abused its discretion in excluding all of her summary-judgment evidence, and (2) the evidence was legally insufficient to support the trial court’s summary judgment. Although we review the trial court’s summary judgment de novo, Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 673, 678 (Tex. 2017) (per curiam).
In reviewing the grant of summary judgment, the scope of our review is limited to the summary-judgment record upon which the trial court’s ruling was based. See Dees v. Thomas, No. 03-18-00372-CV, 2019 WL 2847438, at *4 (Tex. App.—Austin July 3, 2019, no pet.) (mem. op.). In determining what constitutes the summary-judgment record, we begin with Davila’s first issue regarding the trial court’s excluding her evidence. As relevant here, Texas Mutual made the following three objections to Davila’s summary-judgment evidence: (1) “Texas Mutual objects to Exhibits A through J on the ground that they have not been properly authenticated,” (2) “Exhibits A through J, as outlined below, contain hearsay statements and hearsay within hearsay,” and (3) “Texas Mutual objects to Davila’s Exhibits A through J because they do not meet the producing cause standard [citations omitted].”
Davila did not file a written response to Texas Mutual’s objections; object to the trial court’s ruling; request the trial court to reconsider its decision to strike her exhibits; or request an opportunity to amend her summary-judgment response via a motion for new trial, for rehearing, or to set aside the judgment. Now, for the first time in briefing before this Court, Davila asserts that the trial court “erred by omitting all [of her] exhibits,” “err[ed] in excluding critical evidence,” “excluded all of [her] exhibits not just the ones containing hearsay,” and that Texas Mutual “is objecting to its own self by stating the Decision and Order of the Division contain hearsay.” Other than this vague reference to hearsay, her brief contains no contention or supporting argument and authority that any of the three bases that Texas Mutual asserted for exclusion of her evidence are without merit.
As a prerequisite to presenting a complaint for appellate review, the record must show the complaint was made to the trial court by a timely request, objection, or motion. Cantu, 195 S.W.3d at 871.
*3 Furthermore, “when an appellee urges several objections to a particular piece of evidence and, on appeal, the appellant complains of its exclusion on only one of those bases, the appellant has waived that issue for appeal because [she] has not challenged all possible grounds for the trial court’s ruling that sustained the objection.” Gulley v. Davis, 321 S.W.3d 213, 218 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Read liberally, Davila’s appellate contentions address only Texas Mutual’s hearsay ground supporting the trial court’s ruling that sustained the objections. However, she fails to address the other two objections that Texas Mutual advanced (i.e., that her exhibits were not properly authenticated and did not meet the “producing cause standard”).
Because the trial court could have sustained Texas Mutual’s objections on grounds other than hearsay, and Davila has not challenged all possible grounds for sustaining the objections, we conclude that she has waived any error as to the exclusion of her summary-judgment evidence. See Murray v. Grayum, No. 03-10-00165-CV, 2011 WL 2533796, at *1 (Tex. App.—Austin June 24, 2011, pet. denied) (mem. op.) (if appellant does not “attack all independent bases or grounds that fully support a complained-of ruling or judgment,” court “must affirm the ruling or judgment on the remaining independent basis”).
Because we must review the trial court’s summary-judgment ruling on the record before it, see Jennings v. Bindseil, 258 S.W.3d 190, 194 (Tex. App.—Austin 2008, no pet.) (noting that if nonmovant fails to raise issue of material fact, court must grant no-evidence motion). Because of our disposition of Davila’s first issue, we need not address her second issue asserting that there is “factually insufficient evidence” to support the trial court’s summary judgment.
We affirm the trial court’s order granting summary judgment for Texas Mutual.
Court of Appeals of Texas, Austin.
Sabrina ISMAIL, Appellant
Mohammad Sayem KHAN, Appellee
Filed: January 24, 2020
FROM THE 425TH JUDICIAL DISTRICT COURT OF WILLIAMSON COUNTY, NO. 17-2600-F425, THE HONORABLE BETSY F. LAMBETH, JUDGE PRESIDING
Attorneys & Firms
Sabrina Ismail, 13858 N. Highway 183, #102, Austin, TX 78750, pro se.
Matthew Valley, The Law Office of Matthew Valley, 1213 W. Slaughter Ln., Ste. 100, Austin, TX 78748, for Appellant.
Mohammad Sayem Khan, 12129 Wickline Way, Austin, TX 78717, pro se.
Before Chief Justice Smith
Jeff Rose, Chief Justice
*1 Sabrina Ismail appeals the district court’s final decree of divorce in the underlying suit filed by Mohammad Sayem Khan. In three issues, Ismail contends that the district court erred by: (1) finding that her monthly net resources for calculating child support were $4,000 per month; (2) characterizing real property in Bangladesh as community property; and (3) dividing the marital estate without sufficient evidence to make a just-and-right division. We will affirm the district court’s decree.
Ismail and Khan married in 2004 and have two children. Khan filed for divorce in 2017. After a bench trial, the district court determined that Ismail had monthly net resources of $4,000 and signed a divorce decree ordering her to pay $280 in monthly child support. The decree also awarded Ismail and Khan an undivided 50% interest in “[t]he parties’ partial ownership of land in Mirpur, Bangladesh.” This appeal followed.
Monthly net resources for child-support calculation
In her first issue, Ismail contends that the district court erred by finding that her monthly net resources for calculating child support were $4,000 per month. She states that the evidence at trial showed she was “destitute,” and specifically contends that the district court should not have considered money she receives from family as part of her “resources” because her family has no obligation to continue providing that money. Thus, in her view, her monthly net resources are not $4,000, but zero.
A trial court’s child-support order will not be disturbed on appeal unless the complaining party shows a clear abuse of discretion. Ziefman v. Michels, 212 S.W.3d 582, 587 (Tex. App.—Austin 2006, pet. denied)).
The Family Code defines “resources,” for the purpose of determining child-support liability, as including:
(1) 100 percent of all wage and salary income and other compensation for personal services (including commissions, overtime pay, tips, and bonuses);
(2) interest, dividends, and royalty income;
(3) self-employment income;
(4) net rental income (defined as rent after deducting operating expenses and mortgage payments, but not including noncash items such as depreciation); and
(5) all other income actually being received, including severance pay, retirement benefits, pensions, trust income, annuities, capital gains, social security benefits other than supplemental security income, United States Department of Veterans Affairs disability benefits other than non-service-connected disability pension benefits, as defined by 38 U.S.C. Section 101(17), unemployment benefits, disability and workers’ compensation benefits, interest income from notes regardless of the source, gifts and prizes, spousal maintenance, and alimony.
*2 section 154.062(b)(5) includes “gifts” and “all other income actually being received” in definition of “resources”).
Here, Khan, Ismail, and Ismail’s sister testified about Ismail’s financial resources. Khan testified that Ismail has an extensive inheritance from her parents. But Ismail’s sister denied knowing of any assets that Ismail inherited or would inherit. Ismail testified that she receives financial assistance from her family each month:
Court: How much money do you receive from your family on a monthly basis?
Ismail: The thing is that Mohammad Khan gives me $1,800 and after that if I need something, they do grocery and sometimes they pay money like $300 or $200 like that.
Ismail further testified that because of her family’s financial assistance, money does not matter to her:
Ismail’s counsel: Do you have a job that pays you money?
Ismail: No, I am not getting money but I will give [sic] some money from Mohammad Khan and my family members are helping me so money doesn’t matter for me.
Ismail’s counsel: Do you have any cash yourself?
Ismail: Right now in my bank statement in bank account are you asking?
Ismail’s counsel: Yes, approximately how much do you have?
Ismail: $1,800 and if I need more money I would get it from Mohammad Khan and if don’t get it from Mohammad Khan I’ll take it from my family members so I don’t need to think about money, actually.
At the hearing on the motion to enter the final decree, Ismail’s counsel contended that Ismail’s “testified-to income was zero” but the district court recalled that “[Ismail] testified as to money that was coming in from other sources and that’s what I based it on.” Thus, the record disproves Ismail’s contention that her “testified-to income was zero” by showing that Ismail receives monthly “resources,” statutorily defined as including “gifts,” from her family members that may be considered in calculating child support. See In re L.R.P., 98 S.W.3d at 314.
However, the district court stated that it was “not comfortable with the information” it had “regarding what [Ismail] receives or what she’s able to receive from her family.” Using the wage-and-salary presumption under Id. Application of the wage-and-salary presumption here yields a monthly child support obligation of $280.91, which is slightly greater than the $280 child support that the district court ordered in its final decree.1 Unsurprisingly, Ismail does not complain that the district court ordered her to pay less child support than that authorized by application of the wage-and-salary presumption in the Family Code.
*3 Rather, Ismail complains about the finding that her monthly net resources were any amount greater than zero. But Ismail acknowledges that when determining her monthly net resources available for child support, the trial court was authorized to assign a reasonable amount of deemed income attributable to assets that do not currently produce income. See id. § 154.067(a). Section 154.067(a) of the Family Code provides that:
[w]hen appropriate, in order to determine the net resources available for child support, the court may assign a reasonable amount of deemed income attributable to assets that do not currently produce income. The court shall also consider whether certain property that is not producing income can be liquidated without an unreasonable financial sacrifice because of cyclical or other market conditions. If there is no effective market for the property, the carrying costs of such an investment, including property taxes and note payments, shall be offset against the income attributed to the property.
Id. Here, the court’s marital-property division (excluding clothing, jewelry, and furniture with a net value of $22,500) awarded Ismail assets with net values in excess of $85,801.97. Ismail received liquid assets, an income-producing asset, and other assets that do not currently produce income:
• real property in Temple, Texas with a net value of $45,789.65 that generates $1,200 in rent (after deducting $150 payment to property-management entity);
• an Employee Retirement System account with a net value of $9,979.19;
• a Baylor Scott & White Health Retirement Savings Plan with a net value of $15,368.94;
• half of a Canadian Local Authority pension plan with Ismail’s share of net value at $13,664.19; and
• a Wells Fargo joint checking account with a balance of $1,000.
Further, Khan was ordered to pay Ismail $1,000 monthly for spousal maintenance.
The district court could have considered these assets and spousal-maintenance income—in addition to the $200 to $300 monthly financial support that Ismail’s family provides to her—when determining Ismail’s net resources available for child support. See id. Norris v. Norris, No. 03-12-00108-CV, 2013 WL 812110, at *8, 2013 Tex. App. LEXIS 1884, at *24 (Tex. App.—Austin Feb. 27, 2013, no pet.) (mem. op.) (rejecting father’s complaint about trial court’s conclusion that his assets provided him with net monthly income of $3,300 because evidence indicated that he had assets in excess of $500,000 and trial court could have reasonably determined that those assets could produce $3,300 monthly).
*4 Because this record contains some evidence of a substantive and probative character supporting the district court’s net-resources finding, Ismail failed to meet her burden of showing that the district court abused its discretion in making that finding. See Ziefman, 212 S.W.3d at 587. And in any event, the district court set Ismail’s child support amount at a figure well below this, applying the wage-and-salary presumption for minimum-wage income from the Family Code. We overrule Ismail’s first issue.
Characterization of real property in Bangladesh
In her second issue, Ismail contends that the district court erred by characterizing real property in Bangladesh as community property. She states that testimony in the record “indicated that the Bangladesh property, if it exists,” is her sole and separate property. All property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Id. § 3.003(b).
However, the district court’s decree does not purport to divide any spouse’s separate property. Rather, the decree specifies that Ismail and Khan are each awarded 50% interest in land in which they have “partial”—not sole—ownership. Unlike the other references to real property in the decree, there is no property description for the reference to land in Bangladesh, and Ismail herself questions the Bangladesh property’s existence.
Further, the partial ownership of land referenced during Khan’s closing argument was “land in Pakistan,” not in Bangladesh.2 Khan testified that Ismail would inherit certain real property in unspecified cities—“two four-story building[s]” located “in the capital” and “the home [where] she was born and grew up, it’s in another city and they have acres and acres and acres of land”—but there was conflicting testimony on the inheritance issue and nothing in the record to establish that Ismail actually owned any such properties. When Ismail’s sister was asked what happened to her parents’ property after their deaths, she testified, “We don’t have any specific property. My parents used to live in a house, that house now belongs to my brother who lives in Bangladesh.” Ismail’s sister denied knowing of any assets that Ismail inherited or would inherit.3
*5 Moreover, the decree specifies that “any assets of the parties not awarded or divided by this Final Decree of Divorce are subject to future division as provided in the Texas Family Code.” If Ismail has any separate property assets in Bangladesh, this decree—which is limited to the land in which Ismail and Khan have “partial” ownership—on its face does not purport to divide those assets. Thus, Ismail is incorrect in her contention that the district court characterized any separate property in Bangladesh as community property. On this record, we conclude that the district court did not abuse its discretion by dividing “[t]he parties’ partial ownership of land in Mirpur, Bangladesh” equally between the spouses. We overrule Ismail’s second issue.
Just-and-right division of marital estate
In her third issue, Ismail contends that the district court erred by dividing the marital estate without sufficient evidence to make a just-and-right division. She specifically contends that absent evidence about the value of “the land” in Bangladesh, the district court was unable to determine “the size of the community pie.”
A trial court must make a just-and-right division of the community estate upon divorce. Henry v. Henry, No. 03-11-00253-CV, 2014 WL 1572478, at *1, 2014 Tex. App. LEXIS 4233, at *2 (Tex. App.—Austin Apr. 18, 2014, no pet.) (mem. op.).
In support of this issue, Ismail relies exclusively on two cases in which the parties presented no evidence of the value of the community estate or any of its component parts. See Sandone v. Miller Sandone, 116 S.W.3d 204, 206-08 (Tex. App.—El Paso 2003, no pet.) (concluding that trial court abused its discretion by dividing marital property when there was no evidence as to value of assets or amount of liabilities; “a complete absence of evidence to support the division of property”). Unlike those cases, this case does not concern a default divorce decree or a record devoid of evidence about the value of assets and amount of liabilities in the marital estate. Thus, neither of Ismail’s cited authorities supports her contention that the trial court abused its discretion in its division of the marital estate.
Moreover, each party in a divorce proceeding has a burden to present sufficient evidence of the value of the community estate to enable the trial court to make a just-and-right division. Deltuva v. Deltuva, 113 S.W.3d 882, 887 (Tex. App.—Dallas 2003, no pet.). Because Ismail failed to provide a value for any real property in Bangladesh, she may not now complain that the district court had insufficient information to divide the marital estate in a just-and-right manner. We overrule Ismail’s third issue.
*6 We affirm the district court’s final decree of divorce.
Dissenting Opinion by Justice Smith
Edward Smith, Justice, dissenting.
The divorce decree in this case awards each of the parties an undivided 50% interest “[i]n the parties’ partial ownership of land in Mirpur, Bangladesh.” Sabrina Ismail contends the district court erred by characterizing this land, if it exists, as community property. I disagree with the majority that Ismail failed to establish an abuse of discretion and would reverse and remand for a new property division. For that reason, I respectfully dissent.
The Family Code directs the trial court presiding over a divorce to make a “just and right” division of the parties’ community property. Id.
All property possessed by a spouse on divorce is presumed to be community property. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).
*7 The majority concludes the decree does not purport to divide any spouse’s separate property. Instead, the majority construes the decree as dividing their joint, partial ownership interest in land in Bangladesh. But Ismail argues that there is no evidence that the land divided by the decree was in fact jointly owned. In response, Khan argues that the parties jointly purchased the land. He claims that he “provided a copy of an email to the [trial] court [showing] that he paid money to purchase the land.” But Khan did not mention this purchase in his testimony at trial, and he did not offer that email into evidence. In fact, the only evidence regarding the character of the land in Bangladesh is Khan’s own testimony. He testified that Ismail inherited some of her family’s extensive landholdings in Bangladesh and that he saw the property while traveling there. Khan’s testimony regarding how Ismail acquired the land is undisputed and thus conclusively establishes it as her separate property. See id. at 815 (holding undisputed evidence may “become conclusive when a party admits it is true”).
If a court mischaracterizes a spouse’s separate property as community property and awards some of it to the other spouse, as the district court did here, “the error is by definition harmful, and we must reverse and remand because the subsequent division of the community estate would divest the spouse of his or her separate property.” Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140–41 (Tex. 1977))). I therefore would sustain Ismail’s second issue and reverse and remand the division of the community estate.
This disposition makes it unnecessary to address Ismail’s third issue, in which she alleges that the district court divided the community estate without evidence of its value. See Wilson v. Wilson, 132 S.W.3d 533, 539 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (same).
I respectfully dissent.
The statutory chart in the Family Code lists $1123.62 as the net monthly income for a person earning the federal minimum wage. See Tex. Fam. Code § 154.061 (containing chart for computing net monthly income). Applying to that amount the 25% guideline for two children results in a total of $280.91. See id. § 154.125 (providing schedule of percentage guidelines which for two children is 25% of obligor’s net resources).
Khan’s counsel stated, “We have partial ownership of the land in Pakistan which is 100 percent to the wife but there is no valuation on that because we don’t have a value so Ms. Ismail is not exactly getting a 43 percent split compared to Mr. Khan’s 56 percent split as shown on this spreadsheet.” (The spreadsheet referenced here is not in the record.). Ismail’s counsel responded, “[T]here was no testimony before [the court] about a piece of property in Pakistan.”
Given the testimony at trial, evidence as to Ismail’s separate-property claim was not conclusive. We defer to the district court’s resolution of evidentiary conflicts as the factfinder. See 2019 WL 2078173, 2019 U.S. LEXIS 2051 (May 13, 2019).
I express no opinion on whether the majority’s analysis of the merits of Ismail’s first issue is correct.
Court of Appeals of Texas, Austin.
FACILITY INSURANCE COMPANY; Midwest Employers Casualty Company; ACE American Insurance Company; Houston General Insurance Company; UPS Ground Freight Inc.; Hartford Casualty Insurance Company; WC Solutions; Poly-America, LP; British American Insurance Company; Clarendon National Insurance Company; Sentry Insurance, A Mutual Company; St. Paul Fire & Marine Insurance Company; American Zurich Insurance Company; Employers Insurance Company of Wausau; Zurich American Insurance Company; CompPac Trust of Texas; Netherlands Insurance Company; American Home Assurance Company; and Fidelity & Guaranty Insurance Company, Appellants
VISTA HOSPITAL OF DALLAS, Vista Medical Center Hospital, and Surgery Specialty Hospitals of America, Appellees
Filed: December 5, 2019
FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-005812, HONORABLE KARIN CRUMP, JUDGE PRESIDING
Attorneys & Firms
Steven M. Tipton, Flahive Ogden & Latson, P.O. Box 201329, Austin, TX 78720, for Appellants.
David F. Bragg, Law Offices of David F. Bragg, P.C., P.O. Box 2047, Bastrop, TX 78602, for Appellees.
Before Chief Justice Smith
Chari L. Kelly, Justice
*1 This is an appeal in a suit for judicial review of an administrative decision.1 The administrative decision arose from a dispute over reimbursement for workers’ compensation medical benefits. Appellants are insurance companies, or “certified self-insureds,” who provide coverage under the Texas workers’ compensation system (collectively, the Carriers). Appellees are Vista Hospital of Dallas, Vista Medical Center Hospital, and Surgery Specialty Hospitals of America (collectively, Vista). Vista alleged systematic underpayment of claims by the Carriers beginning in 2002. Vista initially claimed a “fair and reasonable” payment of 70%–100% of their billed charges. After a 2008 regulatory change required the kind of services that Vista rendered to be reimbursed at 200% of the Medicare allowable reimbursement going forward, Vista revised its calculations to that amount. A panel of State Office of Administrative Hearings (SOAH) judges issued a Decision and Order, awarding reimbursement to Vista based on its revised calculations because SOAH determined those amounts to be “fair and reasonable.” The trial court affirmed SOAH’s decision, and this appeal ensued.
In nine issues, which can be grouped into three categories, the Carriers challenge (1) alleged procedural problems with Vista’s presentation of its case before SOAH, (2) the evidence supporting SOAH’s findings and conclusions that the Carriers’ reimbursement calculations did not result in “fair and reasonable” reimbursement to Vista (and that Vista’s competing calculations did), and (3) SOAH’s award of interest to Vista. We affirm.
The underlying disputes are the latest in a long-running series between Vista and carriers of workers’ compensation policies over reimbursement for covered medical expenses. See generally Vista Healthcare, Inc. v. Texas Mut. Ins. Co., 324 S.W.3d 264 (Tex. App.—Austin 2010, pet. denied).
Legal Framework for Medical Reimbursement
State law requires that “health care reimbursement policies and guidelines” govern reimbursement of health care providers who provide services to injured workers covered by workers’ compensation. See Vista Med. Ctr. Hosp., 2018 WL 3999595, at *1.
*2 Once the Division adopts a fee guideline for a certain type of medical care, workers’ compensation carriers must reimburse providers of that type of care in accord with the guideline. See id. (citing 28 Tex. Admin. Code § 134.1(e)(3) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Reimbursement).
Vista and the Carriers’ Disputes Over Vista’s Bills
Vista provided outpatient medical services to injured workers from 2002 to 2008 under policies issued by the Carriers. In the fifty-three instances underlying this appeal, Vista billed one or more of the Carriers for these services. Vista’s original bill in each instance was on a Uniform Bill (UB) form—the standard bill form required by the Division. See id. § 133.10(b)(2) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Required Billing Forms/Formats). Vista computed its billed amounts according to its usual and customary fee schedule. Vista listed on the UBs the “procedure codes” corresponding with the services or procedures that it performed.
The Carriers paid Vista some, but not all, of the amounts requested. Vista asked the Carriers to reconsider and to reimburse it at 100% of the billed charges. When the Carriers refused, Vista requested Medical Dispute Resolution before the Division. See generally 28 Tex. Admin. Code § 133.305 (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., MDR—General). Before the Division, Vista contended that “fair and reasonable” reimbursement required compensation at no less than 70% of its billed charges in each dispute.
Ultimately, the Division determined that Vista was not entitled to any reimbursement beyond what the Carriers had already paid. So, from 2004 to 2009, Vista sought de novo contested case hearings before SOAH for each of the fifty-three disputes, again contending that reimbursement at 70%–100% of its billed charges was “fair and reasonable.”
The fifty-three disputes remained on SOAH’s docket for several years.
Legal Developments While the Disputes Were Pending Before SOAH
In the meantime, there were developments in the law affecting workers’ compensation reimbursement.
In 2006, the Division promulgated Rule 134.1, which requires “fair and reasonable” reimbursement to be, among other things, “consistent with the criteria of 28 Tex. Admin. Code § 134.1(d)(1) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Reimbursement)), renumbered to subsection 134.1(f) by 33 Tex. Reg. 364, 393 (2008).
Tex. Lab. Code § 413.011(d) (“Fee guidelines must be fair and reasonable ....”). The criteria are that fee guidelines must be “designed to ensure the quality of medical care,” must be “designed ... to achieve effective medical cost control,” and “may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual’s behalf.” Id. In the absence of a fee guideline for a certain type of medical care, that care must be reimbursed at “fair and reasonable” rates.
*3 Following promulgation of Rule 134.1, Vista took the position that, for health care services for which the Division had not yet created any fee guideline, the rule could only require “fair and reasonable” reimbursement and could not also require that reimbursement comply with id. at 272–73.
In 2008, the Division promulgated a new fee guideline to govern “medical services provided in an outpatient acute care hospital on or after March 1, 2008” (the 2008 Fee Guideline). See Labor Code section 413.011(d). See 33 Tex. Reg. at 400–28.
The 2008 Fee Guideline uses reimbursement amounts prescribed by the federal Centers for Medicare and Medicaid Services for certain procedure codes, instead of using any health care provider’s usual and customary charges for those procedure codes. The guideline also requires that outpatient facilities be reimbursed at “200 percent” of “[t]he sum of the Medicare facility specific reimbursement amount and any applicable outlier payment amount” as provided in “the most recently adopted and effective Medicare Outpatient Prospective Payment System (OPPS) reimbursement formula and factors as published annually in the Federal Register.” 28 Tex. Admin. Code § 134.403(f)(1)(A) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Hospital Facility Fee Guideline—Outpatient). The 200% figure is called a Payment Adjustment Factor (PAF) or “200% of Medicare.” An outpatient facility’s ultimate reimbursement under the 2008 Fee Guideline is, roughly, the Medicare-prescribed amount for the services performed, plus any outlier payment,3 times two.
The 2008 Fee Guideline included a Preamble explaining its origin and underlying reasoning. The Preamble explained the Division’s purpose behind promulgating the guideline; the extensive research that informed its choices; and how the guideline meets the applicable statutory requirements, including Labor Code section 413.011’s criteria. The Preamble also explained why the Division’s research supported the 200% PAF. For all this, the Preamble explains, the Division relied on data from the years preceding 2008.
Vista Changes its “Fair and Reasonable” Calculations in the Pending Disputes
When Vista presented the fifty-three fee disputes to the Division, it calculated its reimbursement requests based on its view that Rule 134.1 should not require it to satisfy Labor Code section 413.011’s criteria. Then, in response to the 2008 Fee Guideline’s promulgation and to this Court’s rejection of Vista’s position on Rule 134.1 in Vista Healthcare, Vista changed its methodology for calculating “fair and reasonable” reimbursement in the fifty-three disputes. Even though Vista’s underlying claims preceded the 2008 Fee Guideline change, Vista recalculated their reimbursement requests from their initial 70%–100% of billed charges to the Medicare-prescribed reimbursement amounts for those same procedure codes, added any applicable outlier amounts, and applied the 200% PAF. These new calculations, Vista represents, resulted in lower overall amounts requested for reimbursement than its original calculations did.
*4 Vista laid out these new calculations in “Exhibit 1” documents that it filed with SOAH in each of the fifty-three disputes. In November 2013, Jacquelyn Pham, the Vice President of Business Financial Services for Dynacq Healthcare, swore to an affidavit in support of the “Exhibit 1” documents’ new calculations. In it, she said that Vista’s use of the 200% PAF resulted in “fair and reasonable” reimbursement. And she said that using the 2008 Fee Guideline for the fifty-three disputes produced “fair and reasonable reimbursement amount[s] which take[ ] into consideration all of the factors in the Texas Labor Code that are to be considered in the development of fee guidelines in the adjudication of fair and reasonable reimbursement.”
Final Hearing Before SOAH, Evidence Presented, and Result
In April 2015 before a panel of three administrative-law judges, SOAH held its final hearing in the fifty-three disputes. Vista’s evidence included its “Exhibit 1” documents; the 2008 Fee Guideline (including its Preamble); and testimony from Pham, who had provided the affidavit in support of Vista’s position.
Pham testified about her qualifications, training, and experience to opine about Vista’s calculation methodology. She also testified about how Vista calculated the “fair and reasonable” reimbursement amount on each “Exhibit 1,” including applying the 200% PAF, and that Vista and payors have been using the same method for several years.
Vista represented that, in every dispute, its “fair and reasonable” calculations produced lower overall reimbursement amounts than its original calculations produced. But the Carriers were unwilling to reimburse Vista at the newly calculated amounts.
Pham was the only witness to testify. The Carriers’ counsel cross-examined her extensively, but the Carriers did not offer any witness of their own.
Ultimately, the SOAH panel concluded that the Carriers should reimburse Vista at the rates calculated under the 2008 Fee Guideline, less amounts that the Carriers had already paid. The panel’s Decision and Order specified that the panel “derive[d] a methodology for determining fair and reasonable reimbursement.” The Decision and Order’s fourth conclusion of law said that “Vista met its burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by the Carriers for the services provided.”
The panel included the following findings relevant here in its Decision and Order:
4. The responsible Carrier reimbursed Vista ... for the services provided to the injured worker in each case.
5. Vista requested additional reimbursement in each of the cases, and in each case the responsible Carrier denied the request.
11. At the time Vista provided the services at issue in each case, there was no applicable fee guideline.
12. The Division adopted [the 2008 Fee Guideline], found at 28 Texas Administrative Code § 134.403, effective March 1, 2008.
13. The [2008 Fee Guideline] was adopted in order to provide fair and reasonable reimbursement for hospital outpatient services.
14. The [2008 Fee Guideline] is based on nationally-recognized studies, including data from other state systems, and research conducted by the federal Centers for Medicare and Medicaid Services (CMS).
15. Pursuant to the [2008 Fee Guideline], the Division adopted a Payment Adjustment Factor (PAF) for outpatient hospital fees of 200%, effective March 1, 2008.
16. The [2008 Fee Guideline] methodology provides a reliable method for calculating fair and reasonable reimbursement for the services at issue.
The Decision and Order also awarded Vista all interest as required by law.
Proceedings in the Trial Court
The Carriers then filed this suit, seeking judicial review of the Decision and Order. See Tex. Gov’t Code §§ 2001.001–.903. Ultimately, the trial court affirmed the Decision and Order and rendered judgment against the Carriers for the amounts that SOAH had ordered to be paid. The Carriers now appeal that judgment.
STANDARD OF REVIEW
*5 The Carriers ask that we reverse the district court’s judgment affirming SOAH’s final reimbursement decision. The Carriers sought judicial review of that decision under the APA. See generally id.; see also Tex. Lab. Code § 410.255. Under those provisions, we must “reverse or remand the case for further proceedings if,” and only if,
substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency’s statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
See Vista Med. Ctr. Hosp., 2018 WL 3999595, at *2.
“Essentially, this is a rational-basis test to determine, as a matter of law, whether an agency’s order finds reasonable support in the record.” Jenkins, 537 S.W.3d at 149.
I. Procedural Issues
We will first address the Carriers’ procedural complaints about the case that Vista should or should not have been allowed to present before SOAH. The Carriers raise these complaints in their sixth and seventh appellate issues.
A. Alleged procedural problems stemming from Vista’s new calculation methodology
In their sixth issue, the Carriers put forward three alleged procedural problems with Vista’s case: (1) “Vista failed to timely submit to each Carrier its corrected, new bill”; (2) “Vista failed to request reconsideration of its corrected ‘bills’ ” by the Carriers; and (3) “Vista failed to submit a ‘complete’ bill.” The Carriers contend that these alleged failures mean that SOAH’s award cannot stand because it either violated a statutory provision, was in excess of SOAH’s authority, was made through unlawful procedure, or was arbitrary and capricious. See Tex. Gov’t Code § 2001.174(2)(A), (B), (C), (F).
1. Timely submission of medical bills and claims for payment
The Carriers rely on a statute, a former rule, and a current rule for their argument about timely bill submission. Under the statute, “[a] health care provider shall submit a claim for payment to the insurance carrier not later than the 95th day after the date on which the health care services are provided to the injured employee.” Tex. Lab. Code § 408.027(a). Failing this requirement “constitutes a forfeiture of the provider’s right to reimbursement for that claim for payment.” Id.4
*6 Under a now-repealed rule in force during the period relevant to the underlying disputes, a health care provider could not “submit a medical bill later than the first day of the eleventh month after the date the services are provided.” See 25 Tex. Reg. 2139, 2146 (2000) (formerly codified at 28 Tex. Admin. Code § 134.801(c) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Submitting Medical Bills for Payment)), repealed by 31 Tex. Reg. 3560, 3560 (2006).
And under a rule in force since 2006, a health care provider generally may not “submit a medical bill later than the 95th day after the date the services are provided.” See 28 Tex. Admin. Code § 133.20(b) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Bill Submission by Health Care Provider), adopted by 31 Tex. Reg. 3554, 3555 (2006), amended by 34 Tex. Reg. 430, 432 (2009).
The statute applies to “claim[s] for payment,” see 28 Tex. Admin. Code § 133.20(b) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Bill Submission by Health Care Provider); 25 Tex. Reg. at 2146, repealed by 31 Tex. Reg. at 3560.
The Carriers argue that the “Exhibit 1” documents’ reimbursement calculations under the 2008 Fee Guideline’s methodology were new “claims for payment” or new “medical bills.” However, the Carriers’ argument misconstrues the reimbursement process. Health care providers submit claims for payment as a billed charge, and payors may re-price the charges when reimbursing. A provider need not submit a new bill when it challenges the reimbursement amount determined by a carrier, even if the alleged underpayment changes during a regulatory proceeding. Cf. 28 Tex. Admin. Code §§ 133.250(d) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (requiring that providers’ “request[s] for reconsideration” to carriers contain simply (1) same information as original bill, (2) copy of original explanation of benefits, (3) “any necessary and related documentation not submitted with the original medical bill to support the health care provider’s position,” and (4) explanation “that provides a rational basis to modify the previous denial or payment”), 133.250(i) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (authorizing Medical Dispute Resolution for provider after carrier has denied reconsideration).
Vista’s evidence about its calculation process is substantial evidence to support the conclusion that its “Exhibit 1” documents’ calculations were not new “medical bills” or new “claims for payment.” The way Vista calculated “fair and reasonable” reimbursement may have changed, but the underlying bills, UBs, and procedure codes did not. Vista represents that its ultimate “fair and reasonable” calculations produced less in reimbursement than its earlier calculations had produced. Vista’s new calculations therefore do not constitute new claims for payment or new medical bills under the statute and two rules on which the Carriers rely. Cf. 28 Tex. Admin. Code § 133.250(d), (i) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (allowing providers to pursue reconsideration and dispute resolution with new explanations but without changing underlying bills).
2. Reconsideration of bills
The Carriers also challenge the “reconsideration” step in the underlying disputes. Generally, an aggrieved provider must request reconsideration by the carrier before proceeding to dispute resolution before the Division. See id.
*7 The Carriers rely on a former rule, which was in effect during the period relevant to the underlying disputes and which provided:
The sender of a medical bill may request medical dispute resolution in accordance with § 133.305 of this title (relating to Medical Dispute Resolution) if the sender of a medical bill has requested reconsideration in accordance with this section and:
(1) after reconsideration, the sender is still dissatisfied with the insurance carrier’s action on the medical bill; or
(2) the sender has not received the insurance carrier’s response to the request for reconsideration by the 28th day after the date the request for reconsideration was sent to the insurance carrier.
25 Tex. Reg. 2128, 2131 (2000) (formerly codified at 28 Tex. Admin. Code § 133.304(m) (Tex. Workers’ Comp. Comm’n, Medical Payments and Denials)), repealed by 31 Tex. Reg. 3543, 3544 (2006).5
The Carriers argue that Vista “could not possibly have submitted” its new calculations “for reconsideration, since it never submitted these corrected, new bills to each Carrier in the first instance.” The Carriers received Vista’s new calculations while the underlying disputes were pending before SOAH. But Vista represents—and the Carriers do not contend otherwise—that, in every dispute, Vista’s “fair and reasonable” calculations under the 2008 Fee Guideline produced lower overall reimbursement amounts than its original calculations produced. When Vista originally requested reconsideration, then, it did so at higher amounts than it ultimately sought before SOAH. We therefore conclude that Vista’s original, timely reconsideration requests were effective to support proceeding to Medical Dispute Resolution under former Rule 133.304(m). And we conclude that Vista was not required under the rule to ask for reconsideration again at the lower amount. See 25 Tex. Reg. at 2131 (formerly codified at 28 Tex. Admin. Code § 133.304(m) (Tex. Workers’ Comp. Comm’n, Medical Payments and Denials)); Texas Workers’ Comp. Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643, 654 (Tex. 2004) (describing former Rule 133.304(m) in only these terms: “A health care provider that disagrees with a carrier’s determination of the reimbursement amount may initiate the dispute resolution process.”)
3. “Complete” bills
The Carriers argue that Vista’s “Exhibit 1” in each dispute was a medical bill and that Vista therefore did not submit complete bills because the new calculation methodology reflected in the “Exhibit 1” documents (1) was not reflected in the documents originally submitted to the Carriers, (2 “does not include the correct billing codes from Division fee guidelines in effect on the date of service,” and (3) “contains charges [that] have been altered from the UBs.” The Carriers’ position, in effect, is that Vista’s bills as originally submitted were complete but only so long as Vista stuck with the “fair and reasonable” reimbursement calculation methodology reflected in those bills.
*8 We have already concluded that the “Exhibit 1” documents were not themselves new medical bills. And we have concluded that former Rule 133.304(m) did not require Vista to submit to the Carriers for reconsideration its new “fair and reasonable” reimbursement calculations when Vista’s original request for reconsideration was calculated at the higher, charged-based amounts. The Carriers do not argue that those earlier submissions were not complete in themselves, so we reject this third portion of their sixth issue.
Accordingly, we overrule the Carriers’ sixth issue.
B. Argument about barring Vista’s new calculation methodology before SOAH
In their seventh issue, the Carriers contend that Vista’s claims for “fair and reasonable” reimbursement before SOAH should have been barred for failure to meet “jurisdictional and procedural prerequisites.” The prerequisite that the Carriers contend was unmet is Vista’s failure to have presented the same reimbursement calculations to SOAH that it had presented to the Division. When Vista filed its challenges with the Division from 2004 to 2009, Vista sought reimbursement calculated at 70%–100% of its billed charges. But during the final hearing before SOAH in 2015, Vista sought reimbursement calculated at 200% of the Medicare-prescribed charges for the outpatient services that Vista performed, plus any outlier payment, as the 2008 Fee Guideline requires.
The Carriers consider the revised calculation methodology to be beyond “the claims” that Vista made “at the agency level.” Not so. Beginning with the dispute process before the Division, and continuing through the SOAH hearing, Vista has always sought reimbursement at “fair and reasonable” rates. This Court’s 2010 opinion in Vista Healthcare clarified that Rule 134.1’s incorporation of 324 S.W.3d at 269–73.
This Court issued Vista Healthcare in 2010—after Vista initiated with the Division the disputes underlying this appeal but before SOAH conducted its hearing in 2015. Vista argues that, because this Court supported the Division’s application of Rule 134.1 to “fee disputes involving ambulatory surgical centers” in Vista Healthcare, “it was clear ... that the same standards would be applied to the outpatient cases” underlying this appeal. The Carriers argue similarly: they identify the Vista facilities at issue here as ones converted from ambulatory surgical centers to outpatient facilities, and they recognize that, for the period relevant to the underlying disputes, reimbursement to ambulatory surgical centers was required to be “fair and reasonable” too. See 22 Tex. Reg. 6264, 6306 (1997) (formerly codified at 28 Tex. Admin. Code § 134.401(a)(4)), repealed by 33 Tex. Reg. 5319, 5319–21 (2008).
In support of their argument, the Carriers rely on id. at 86–87.
*9 In Treybig, there was a “fatal variance” between an injured worker’s claim before the Board and his claim in court. See id. at 897–99. His “hurt hip” claim reasonably supported only a claim of accidental injury before the Board, but his claims in court were for a full-blown occupational disease. See id.
Assuming without deciding that Johnson and Treybig apply to medical fee disputes under the workers’ compensation scheme and Division rules, we conclude that those cases do not require reversal here. Vista’s “claim,” both before the Division and SOAH, was for reimbursement at “fair and reasonable” rates. No one argues that the Division had before it insufficient facts or information to pass upon Vista’s “fair and reasonable” fee claims. In 2015, SOAH had before it sufficient facts and information, even though the fee calculations were different from what the Division had addressed. Vista changed its “fair and reasonable” calculation methodology in response to Vista Healthcare and to the 2008 Fee Guideline, but there was nevertheless a “fair and substantial identity of the claim” that Vista advanced before both the Division and SOAH—“fair and reasonable” fee reimbursement.
Accordingly, we hold that some reasonable basis exists in the record for SOAH’s decision to allow Vista to present its new calculation methodology, in light of Vista Healthcare and the 2008 Fee Guideline. See Jenkins, 537 S.W.3d at 149. We therefore overrule the Carriers’ seventh issue.6
II. Substantial Evidence Issues
A. Evidence that the Carriers’ calculation methodology did not produce “fair and reasonable” reimbursement
The Carriers’ first through fifth issues challenge the sufficiency of Vista’s evidence to support SOAH’s Decision and Order. In their first issue, the Carriers contend that Vista failed to carry its burden to prove that the Carriers’ payments to Vista did not constitute “fair and reasonable” reimbursement. Relatedly, they argue that there was “no evidence and no findings of fact” to support SOAH’s fourth conclusion of law—that “Vista met its burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by Carriers for the services provided.”
*10 “To obtain relief from SOAH, Vista had the burden to demonstrate by a preponderance of the evidence that [the Carriers’] reimbursement was insufficient and that Vista’s proposed methodology would result in fair and reasonable reimbursement.” Vista Med. Ctr. Hosp., 2018 WL 3999595, at *2.
“Substantial evidence” requires “more than a mere scintilla.” Id. (quoting Texas Health Facilities Comm’n, 665 S.W.2d at 452).
Vista’s evidence included (1) the 2008 Fee Guideline; (2) Vista’s calculations of “fair and reasonable” reimbursement in accordance with Vista Healthcare and the guideline; and (3) comparisons between the amounts produced by those calculations with the amounts that the Carriers agreed to pay, which were lower. Vista presented evidence that the Carriers did not reimburse them at rates that the Division considers “fair and reasonable” under the 2008 Fee Guideline and its 200% PAF. Because the Carriers’ payments fell short of the rates produced by the 2008 Fee Guideline, there was more than a scintilla of evidence for SOAH to conclude that the Carriers’ payments to Vista did not result in “fair and reasonable” reimbursement.
The Carriers respond that there are no findings of fact in SOAH’s decision to support the conclusion that the Carriers’ payments did not result in “fair and reasonable” reimbursement. On the contrary, the following findings of fact in SOAH’s order support the conclusion that the Carriers’ payments were not “fair and reasonable” because they fell short of the amounts produced by the 2008 Fee Guideline’s methodology: Vista requested additional reimbursement beyond what the Carriers had paid in each dispute; the Carriers refused; there was no applicable fee guideline when Vista provided the underlying services; the 2008 Fee Guideline was then promulgated “to provide fair and reasonable reimbursement for hospital outpatient services” and was “based on nationally-recognized studies, including data from other state systems, and research conducted by the federal Centers for Medicare and Medicaid Services (CMS)”; and the guideline, including its 200% PAF, “provides a reliable method for calculating fair and reasonable reimbursement for the services at issue.”
We hold that SOAH had before it substantial evidence to conclude that the Carriers’ payments to Vista did not amount to “fair and reasonable” reimbursement. Accordingly, we overrule the Carriers’ first issue.
B. Evidence that Vista’s calculation methodology produced “fair and reasonable” reimbursement
*11 The Carriers argue their second, third, and fourth issues together, so we address them together. In their second and third issues, the Carriers contend that Vista failed to carry its alleged burdens to prove (1) that the 200% PAF produced “fair and reasonable” rates “for each date of service in dispute” from 2002 to 2008 and (2) “that a 200% [PAF] was the only acceptable outpatient [PAF] for dates of service” in that period. In their fourth issue, the Carriers contend that SOAH prejudiced their substantial rights by “adopt[ing] and retrospectively appl[ying]” the 2008 Fee Guideline “to set a single exclusive reimbursement rate for all date[s] of service in dispute” from 2002 to 2008. The Carriers argue that the SOAH panel, as it said in the Decision and Order, should not have “derive[d] a methodology for determining fair and reasonable reimbursement.”
Vista’s evidence on these topics includes (1) the guideline’s Preamble, which explains in detail how the Division created the guideline, including its 200% PAF, and (2) Pham’s testimony.
In the Preamble, the Division explains: “In adopting PAFs ..., the Division has conducted extensive research to understand hospital reimbursement in the current Texas workers’ compensation system, including: reimbursement rates, the reimbursement rates as compared to Medicare reimbursement, and the reimbursement rates as compared to non-workers’ compensation reimbursement for hospital services.” 33 Tex. Reg. at 405. The Division also “considered economic indicators for hospitals that are particularly relevant,” including “[h]ospital Medicare margins and hospital market basket information.” Id. The Preamble summarized other information considered by the Division:
• The Division’s health-insurance consultant estimated that, in 2005, outpatient-services facilities were compensated on average at 186% of Medicare’s prescribed amount. “Reimbursement at these levels would generally maintain overall system costs at [calendar year] 2005 levels.” But the 186% average figure was the result of “one workers’ compensation payor [reimbursing] at a significantly lower rate than the average payor. Adjusting for this anomaly, reimbursement moves to approximately 211 percent of Medicare allowable reimbursement.”
• “[S]takeholders” of the workers’ compensation system recommended PAFs ranging from 100% to 266% “of Medicare for outpatient services.”
• The Division’s Compensation Research Institute concluded that “hospital outpatient payments per claim in Texas were lower than the 13-state median studied.”
• The Division adopted the 200% PAF based on all these factors.
Id. at 405–07. Many of these considerations stemmed from the Division’s health-insurance consultant’s review of data from 2005 and 2006. See id. at 402, 405–06.
The 2008 Fee Guideline also relied on other data from the several years before promulgation. The Preamble says that “the Division has based the primary components of its analysis on [calendar year] 2005 information” from “charged and paid data” provided by workers’ compensation carriers. Id. at 401. The Division also studied data on about “166,000 hospital outpatient billing lines” from 2005, which led to the 186% figure. Id. at 402. The Division concluded from 2005 and 2006 surveys conducted by the Texas Hospital Association that outpatient services had been reimbursed by workers’ compensation carriers at about 46%–49% of the service providers’ billed charges. Id. at 403.
In her testimony, Pham discussed her qualifications to opine about using the 2008 Fee Guideline and its 200% PAF and why Vista decided to use it. In her role, she is responsible for “health information management,” including “coding” and “billing and collection” under her company’s comprehensive system for tracking codes and charges. She has “a certification as a registered health information administrator,” which “involves all aspects of the medical record departments, which includes coding, physician deficiencies, delinquencies, [and] making sure the department’s up to different rules and regulations pertaining to patients’ medical records.”
*12 Pham also testified that she participates in at least thirty hours of continuing education every year and is “very familiar” with the Medicare claims processing manual. The manual “defines how Medicare would pay claims based on either inpatient or outpatient” services. In past health-industry employment, she worked (1) as an “auditor consultant,” comparing bill coding to underlying records; (2) as a director of health information management; and (3) as an executive director of operations, acting as “the hub between the business office, case management, and Chargemaster,” which is a billing system. In all, she has “use[d] Medicare methodologies, weights, values,” and the like for over a dozen years. SOAH accepted her “as an expert in ... Medicare billing and billing practices and values.”
Pham was involved with Vista’s application of the 2008 Fee Guideline and its 200% PAF to these disputes. Pham testified about how Vista calculated the “fair and reasonable” reimbursement amount on each “Exhibit 1”:
Q. Well, you added modifiers that weren’t on the bill, correct?
A. I believe based on the coding logic was [sic] that it was my belief that we could add modifiers, we just couldn’t recode the CPT code.
For the modifiers, Vista used the Medicare allowable reimbursement amounts associated with the original UBs’ procedure codes, as the 2008 Fee Guideline would require. Pham testified that Vista refined its calculations over a period of several months and that the calculations resulting from that effort produced “fair and reasonable” reimbursement.
As to the 200% PAF, and as in her affidavit, she opined that using the 200% PAF resulted in “fair and reasonable” reimbursement. She noted that Vista has used the 2008 Fee Guideline to calculate reimbursement for outpatient services for several years. She testified that “workers’ comp. accepts that” method “as the correct way to do it” and that several carriers reimburse Vista according to the guideline’s calculation methodology.
The Carriers respond that Pham’s testimony is not probative evidence at all because it is conclusory. Conclusory opinion testimony is opinion testimony that has “no basis” or whose basis “provides no support” for the opinion given. See CenterPoint Energy Entex v. Railroad Comm’n of Tex., 213 S.W.3d 364, 373 (Tex. App.— Austin 2006, no pet.) (requiring agencies to provide basis for rejecting uncontradicted, unimpeached testimony unless testimony is conclusory).
The Carriers argue that Pham provided no basis, or an insufficient basis, for her opinion that the 2008 Fee Guideline’s 200% PAF could be applied to services provided from 2002 to 2008 though the Division’s order promulgating the guideline said that it would apply from March 1, 2008, onward. But the Preamble, entered into evidence by Vista, did provide Pham with a sufficient basis for her opinion. The Preamble’s explanation of the Division’s and its consultants’ research from the years preceding 2008 provided a sufficient basis. Her opinions therefore were not conclusory. See Texas Health Facilities Comm’n, 665 S.W.2d at 452). Accordingly, we overrule the Carriers’ second issue.7
*13 We also overrule the Carriers’ third issue because it misstates Vista’s burden before SOAH. Vista needed to have shown that calculating reimbursement according to the 2008 Fee Guideline and 200% PAF resulted in “fair and reasonable” rates—not that that methodology was the only acceptable one. See Tex. Lab. Code § 413.011(d); Rule 134.1. We have concluded that substantial evidence supported SOAH’s ruling that Vista’s calculations produced “fair and reasonable” reimbursement.
As for the Carriers’ fourth issue, we do not read the Decision and Order as categorically as the Carriers do. They argue that the panel’s decision to “derive a methodology for determining fair and reasonable reimbursement” was not merely an effort to resolve the disputes but was instead taking upon itself “a new mandate to fashion a methodology for all the cases” and “to set a single exclusive reimbursement rate.” The better reading of SOAH’s action, however, is that it was resolving the Carriers and Vista’s dispute over how to compensate Vista at “fair and reasonable” rates under Labor Code section 413.011(d) and Rule 134.1. To do so, the panel necessarily needed to decide whether Vista’s proposed methodology produced “fair and reasonable” reimbursement. Accordingly, we overrule the Carriers’ fourth issue.8
C. Evidence that Vista’s calculations were accurate
In their fifth issue, the Carriers contend that Vista failed to “prove by a preponderance of the evidence that each of its ... payment calculations were true and accurate.” The Carriers put forward several alleged inaccuracies in Vista’s calculations under the 2008 Fee Guideline, which, according to the Carriers, undermine SOAH’s final award.
The Carriers’ challenges, however, amount to attacks on the credibility and weight of Vista’s evidence. In a substantial evidence review, we “may not substitute [our] judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion.” Central Power & Light Co. v. Public Util. Comm’n, 36 S.W.3d 547, 561 (Tex. App.—Austin 2000, pet. denied)).
*14 Pham testified that Vista refined its calculations over a period of several months and that the calculations resulting from that effort produced “fair and reasonable” reimbursement. Under substantial evidence review, SOAH was permitted to believe that testimony notwithstanding the Carriers’ cross-examination of Pham about instances of allegedly inaccurate calculations. See Lamb Cty. Elec. Coop., 269 S.W.3d at 272. Accordingly, we overrule the Carriers’ fifth issue.
III. Interest Issues
The Carriers’ eighth and ninth issues concern SOAH’s award of interest to Vista. SOAH’s order awarded Vista all interest as required by law, and the trial court did not disturb that ruling.
In their eighth issue, the Carriers contend that requiring them to “pay interest for unpaid fees and charges” was an error that prejudiced their substantial rights because “those fees and charges were not consistent with the guidelines.” The Carriers and Vista agree that any interest owed by the Carriers is by operation of Labor Code section 413.019(a), which provides: “Interest on an unpaid fee or charge that is consistent with the fee guidelines accrues at the rate provided by Section 401.023 beginning on the 60th day after the date the health care provider submits the bill to an insurance carrier until the date the bill is paid.”
Our conclusions above and this Court’s decision in Vista Medical Center Hospital dispose of this issue. In that opinion, as here, (1) Vista sought reimbursement from a workers’ compensation carrier, calculated as a percentage of its billed charges; (2) the disputes went before SOAH; and (3) the Division promulgated a new fee guideline in the meantime. See Id. at *4.
Here, as noted above, we have concluded that substantial evidence supports SOAH’s conclusion that Vista’s calculations under the 2008 Fee Guideline produced “fair and reasonable” reimbursement. Vista’s calculations therefore were “consistent with the fee guidelines,” as required by Labor Code section 413.019(a). See id. at *4. Accordingly, we overrule the Carriers’ eighth issue.
In their ninth issue, the Carriers contend that the accrual date for calculating interest “must be the 60th day following the date of the SOAH Order or the date each Carrier received Vista’s” calculations under the 2008 Fee Guideline. The Carriers argue that the accrual date for calculating interest can be no earlier than the date in each dispute when they first learned of the amounts that Vista was claiming were “fair and reasonable” under the new guideline.
We disagree. This Court concluded the interest discussion in Vista Medical Center Hospital by holding that Tex. Lab. Code § 413.019(a). As reflected in SOAH’s order, each of the claims that are greater than zero contain unpaid charges that are consistent with the guidelines. These unpaid charges existed as of the date the Carriers reimbursed Vista at what has now been determined to be unreasonable and unfair rates. Accordingly, interest properly accrues from the date that the Carriers made each inadequate reimbursement. Thus, we overrule the Carriers’ ninth issue.
*15 We affirm the trial court’s judgment.
See Tex. Gov’t Code § 2001.901(a).
The disputes underlying this appeal involve health care services provided as far back as 2002, when the Division’s predecessor agency, the Workers’ Compensation Commission, administered the workers’ compensation system. See Vista Healthcare, Inc. v. Texas Mut. Ins. Co., 324 S.W.3d 264, 265 n.1 (Tex. App.—Austin 2010, pet. denied). “Effective September 1, 2005, the legislature abolished the Commission and transferred its statutory responsibilities and rules to the Division.” Id. (citing Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 469, 607–08). We use “Division” to refer to either or both of the predecessor agency and the current one, as the context requires.
In this context, an “outlier” payment is an additional payment on top of the standard Medicare-prescribed amount for a particular procedure payable when necessary to reimburse a hospital for “high cost and complex procedures where a very costly service could present a hospital with significant financial loss.” See Medicare Program: Changes to the Hospital Outpatient Prospective Payment System, 72 Fed. Reg. 66,579, 66,683 (Nov. 27, 2007).
This statute became effective September 1, 2005. Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 3.089, 8.020, sec. 408.027(a), 2005 Tex. Gen. Laws 469, 517, 611.
The topics addressed by former Rule 133.304(m) are now addressed within current Rule 133.240. See 31 Tex. Reg. at 3543–45, 3550, 3557–58 (codified at 28 TAC § 133.240, concerning Medical Payments and Denials, in the April 28, 2006, issue of the Texas Register (31 TexReg 3544), effective May 2, 2006.”). The Carriers rely only on the former rule.
Our reasoning also disposes of what the Carriers call the “Constitutional Limitations” portion of their seventh issue. In that portion, the Carriers consider Vista’s change in calculation methodology to be “rais[ing] a new basis for its claim” before SOAH from the one it had raised before the Division. The Carriers argue that they themselves would have been prohibited from making a similar change. The Carriers say that “[t]here is no rational basis to allow one party to a dispute to make changes to its claims at any time, yet prohibit the other party from ever doing the same.” But the “basis for [Vista’s] claim” did not change from the Division to SOAH—Vista sought “fair and reasonable” fee reimbursement in both venues. The Carriers cite no authorities suggesting otherwise in a constitutionality context. Indeed, the Carriers recognize that “Vista did have the right to present evidence, old or new,” before SOAH. The Carriers had the same right, but the Carriers did not put forward testimony from any witnesses of their own. We therefore reject the argument that the Carriers were treated unconstitutionally differently.
Relatedly, the Preamble and Pham’s testimony distinguish this case from Id. at 124–25. By contrast here, the Preamble’s discussion of the Division’s review of information from before 2008 and Pham’s affirmative testimony that the 2008 Fee Guideline produces “fair and reasonable” reimbursement for the 2002–2008 services is the kind of affirmative evidence that the Commission in Lone Star Gas lacked.
We also reject the Carriers’ one-sentence Due Process argument. They argue that SOAH’s use of the 2008 Fee Guideline to arrive at “fair and reasonable” reimbursement in these disputes is a “change of precedent” that “violates the Carriers[’] Due Process rights.” They cite Labor Code section 413.011(d) and Rule 134.1. But even if it were a change in policy or precedent, the Carriers cannot argue any lack of a meaningful opportunity to be heard. The hearing before SOAH took place in April 2015. In November 2013, Pham made her affidavit, in which she testified that Vista’s calculations according to the 2008 Fee Guideline produced “fair and reasonable reimbursement amount[s] which take[ ] into consideration all of the factors in the Texas Labor Code that are to be considered in the development of fee guidelines in the adjudication of fair and reasonable reimbursement.” Despite over a year’s notice of Vista’s position through the affidavit, the Carriers chose not to put forward any witnesses of their own during the SOAH hearing.
Court of Appeals of Texas, Austin.
Dr. Robert COOLBAUGH, D.C., Appellant
TEXAS DEPARTMENT OF INSURANCE-DIVISION OF WORKERS’ COMPENSATION and Commissioner Ryan Brannan, in his Official Capacity, Appellees
Filed: September 10, 2019
FROM THE 353RD DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-15-005776, THE HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING
Attorneys & Firms
David Gordon, for Commissioner Ryan Brannan, in his Official Capacity
Bradley Dean McClellan, for Robert Coolbaugh
David Gordon, for Texas Department of Insurance-Division of Workers’ Compensation
Before Chief Justice Shannon*
Bob E. Shannon, Justice
*1 This is an appeal from the judgment of the district court of Travis County sustaining a plea to the jurisdiction and affirming an order of the Commissioner of Workers’ Compensation. Appellant is Robert Coolbaugh, D.C.; appellees are the Texas Department of Insurance-Division of Workers’ Compensation (the Division) and Commissioner Ryan Brannan (the Commissioner).
The Division and the Commissioner filed a multifaceted plea to the jurisdiction challenging the court’s subject-matter jurisdiction. After hearing, the district court granted the plea and dismissed all of Coolbaugh’s claims save for his claim for judicial review of the Commissioner’s Penalty Order. After conducting the suit for judicial review, the district court rendered judgment affirming the Commissioner’s Penalty Order. This Court will affirm the district court’s judgment.
Coolbaugh filed a declaratory-judgment suit complaining, among other things, of two orders: (1) a 2013 order of the State Office of Administrative Hearings (SOAH) requiring him to pay a $8,326.90 refund to an insurance company as a final disposition of a medical-fee dispute (the Refund Order),1 and (2) the order of the Commissioner imposing a $10,000 administrative penalty for his failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company (the Penalty Order).
Respecting the Refund Order, Coolbaugh asserted that the Division had acted beyond its authority regarding certain disputed medical bills; he also challenged one of the controlling agency rules.
In its plea to the jurisdiction, the Division claimed that the court lacked jurisdiction to review Coolbaugh’s challenge to the Refund Order because it became final in October 2013, when he did not seek judicial review. According to the plea, SOAH rendered the Refund Order in August 2013. Coolbaugh did not challenge the Refund Order and it became final in October 2013. Coolbaugh filed the instant suit complaining of that order in December 2015.
From the parties’ briefing and the correspondence between the district court and counsel, it is apparent that the district court determined the plea to the jurisdiction after an evidentiary hearing, yet Coolbaugh filed no reporter’s record in this Court. See S.C. San Antonio, Inc. v. Texas Dep’t of Human Servs., 891 S.W.2d 773, 779 (Tex. App.—Austin 1995, writ denied).
*2 To avoid the Division’s plea to the jurisdiction asserting sovereign immunity, Coolbaugh alleged that the Penalty Order was an ultra vires act by the Commissioner. In its order granting the plea to the jurisdiction, the district court concluded that Coolbaugh failed to plead a valid ultra vires claim against the Commissioner and dismissed him from the lawsuit.
The ultra vires exception to the sovereign-immunity doctrine permits suits against state officials for nondiscretionary acts unauthorized by law. Tex. Lab. Code § 415.021(a).
After hearing, the district court rendered judgment affirming the Commissioner’s Penalty Order, which imposed a $10,000 administrative penalty for Coolbaugh’s failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company.
Coolbaugh faults the Penalty Order because it imposes a penalty for violations of the Refund Order, which he claims is void and unconstitutional. However, he ignores the fact that the Refund Order is now final and cannot be challenged. The Division and the Commissioner argue that the district court correctly determined that the Commissioner’s Penalty Order is supported by substantial evidence. We agree.
In a substantial-evidence review, the court presumes that the agency order is supported by substantial evidence and the burden is on the contestant to prove otherwise. Id. at 777–78.
After Coolbaugh indisputably failed to comply with the Division’s orders, the Division staff filed a complaint with SOAH seeking imposition of a $30,000 administrative penalty. The administrative law judge conducted a hearing to determine the appropriate amount of the penalty. The Division’s case was presented by one witness, Darrell Cooper, the Division’s Manager of Audits and Investigations. Cooper testified that the Division analyzes the factors in section 415.021(c) in evaluating the amount of the administrative penalty. At the date of the hearing, that section provided:
(c) In assessing an administrative penalty:
(1) the commissioner shall consider:
(A) the seriousness of the violation, including the nature, circumstances, consequences, extent and gravity of the prohibited act;
*3 (B) the history and extent of previous administrative violations;
(C) the demonstrated good faith of the violator, including actions taken to rectify the consequences of the prohibited act
(D) the penalty necessary to deter future violations;
(E) other matters that justice may require; and
(2) the commissioner shall, to the extent reasonable, consider the economic benefit resulting from the prohibited act.
Tex. Lab. Code § 415.021(c).
Measuring Coolbaugh’s conduct against these factors, Cooper testified that Coolbaugh’s violation was serious because of the amount owed and his on-going non-compliance—Cooper was 1,400 days late in payment as of the hearing. He testified further, “An order violation is considered [a] very serious violation. All system participants that have statutory duties are expected to comply with their requirements without being ordered, but if they fail to, the commissioners can issue orders [for them] to come into compliance. If they fail to comply with those orders, then it makes it virtually impossible for the agency to regulate the system.”
Cooper also attested that Coolbaugh had not complied with Division orders requesting information. Cooper noted that Coolbaugh had received two warning letters in the past about late submission of forms. He also opined that Coolbaugh failed to demonstrate good faith in that he did not respond to the Division orders and that he still owed the refund to the insurance companies.
Coolbaugh testified concerning claimed mitigating factors which he asserted should result in no administrative penalty.
The administrative judge filed a proposal for decision concluding that the Division was entitled to an order finding that an administrative penalty in the sum of $7,326.90 was warranted. The Commissioner adopted the proposal for decision with the modification that the administrative penalty be increased to $10,000.
It is undisputed that Coolbaugh failed to reply to orders for production or provide proof of payment of the refund to the insurance company. Accordingly, the Division was authorized to assess an administrative penalty. Under this record, this Court has concluded that the Commissioner’s imposition of the $10,000 Penalty Order is amply supported by substantial evidence.
The judgment is affirmed.
Before Bob E. Shannon, Chief Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov’t Code § 74.003(b).
Early in the controversy, Coolbaugh made a $1,000 payment to the insurance company, thereby reducing the amount owed under the Refund Order to $7,326.90.
Court of Appeals of Texas, Austin.
Pamela JOHNSON, Appellant
TEXAS MUTUAL INSURANCE COMPANY, Appellee
Filed: August 23, 2019
FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-001439, THE HONORABLE JAN SOIFER, JUDGE PRESIDING
Attorneys & Firms
Ms. Pamela Johnson, 815 A Brazos Street, # 416, Austin, TX 78701, Pro Se Appellant.
Ms. Shannon Simmons Pounds Texas Mutual Insurance Company, 2200 Aldrich Street, Austin, TX 78723, Mr. Bryan W. Jones, Texas Mutual Insurance Company, 2200 Aldrich Street, Austin, TX 78723, for Appellee.
Before Chief Justice Smith
Edward Smith, Justice
*1 Pamela Johnson appeals from a no-evidence summary judgment rendered in favor of Texas Mutual Insurance Company on Johnson’s petition for judicial review of a Division of Workers’ Compensation (DWC) decision. On appeal, Johnson argues that the district court erred by excluding her summary-judgment evidence. We will affirm.
On February 9, 2013, Johnson sustained a compensable work-related injury. Texas Mutual accepted liability for her injuries, including a right tendinitis of the left posterior tibial tendon. She further disputed the date of her maximum medical improvement (MMI), her impairment rating, and the period of disability.
Johnson initiated a dispute-resolution process at the DWC to resolve the disputed issues. The DWC administrative law judge (ALJ) issued a decision and order finding that Johnson’s compensable injury included tendonitis, but not left ankle CRPS; that Johnson had not yet reached MMI and therefore should not be assigned an impairment rating; and that Johnson did not have disability from February 12, 2013 through December 31, 2013. Johnson appealed the ALJ’s decision and order, but the DWC Appeals Panel affirmed the ALJ’s decision on all issues. Johnson then filed a petition seeking judicial review challenging the panel’s findings.
In June 2015, Texas Mutual requested that an independent doctor assess whether Johnson had reached MMI and, if she had, to assign her an impairment rating. See (b) (providing that insurance carrier may request designated doctor to perform medical examination to resolve questions about work-related injury). The doctor opined that Johnson reached MMI on February 24, 2015, and assigned an impairment rating of zero percent. Johnson initiated another dispute-resolution process at the DWC to challenge the designated doctor’s findings. The ALJ issued a decision and order finding that Johnson reached MMI on February 24, 2015, and assigned her a zero percent impairment rating.
Johnson then filed another petition seeking judicial review of the ALJ’s decision, and the district court consolidated the two pending cases. Johnson moved for a traditional summary judgment on all issues, and Texas Mutual filed a no-evidence motion for summary judgment and objections to Johnson’s summary-judgment evidence. See Tex. R. Civ. P. 166a(c), (i). The district court sustained Texas Mutual’s objections, leaving Johnson with no summary-judgment evidence, and granted Texas Mutual’s no-evidence motion for summary judgment. Johnson timely appealed. She appears pro se before our Court.
We review a trial court’s granting of summary judgment de novo. Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 608 (Tex. 2017). If the non-movant fails to raise an issue of material fact, the court must grant the motion. Id.
*2 Johnson argues the district court erred by sustaining Texas Mutual’s objection to Johnson’s exhibits, resulting in the court improperly granting Texas Mutual’s no-evidence motion for summary judgment. We review the exclusion of evidence for an abuse of discretion. Valadez v. Avitia, 238 S.W.3d 843, 845 (Tex. App.—El Paso 2007, no pet.). We conclude that Johnson has waived her evidentiary issue. And because Johnson did not provide evidence in response to Texas Mutual’s motion, she failed to raise a genuine issue of material fact. Therefore, we overrule Johnson’s issues on appeal.
We affirm the district court’s judgment.
Court of Appeals of Texas, Austin.
The CITY OF HOUSTON, Appellant
TEXAS PROPANE GAS ASSOCIATION, Appellee
Filed: July 18, 2019
FROM THE 261ST DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-17-001089, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING
Attorneys & Firms
Jane M. N. Webre, Scott Douglass & McConnico LLP, 303 Colorado Street, Suite 2400, Austin, TX 78701, for Appellee.
Collyn A. Peddie, City of Houston Legal Department, 900 Bagby Street, 3rd Floor, Riffany S. Bingham, City of Houston Legal Department, 900 Bagby Street, 4th Floor, Houston, TX 77002, for Appellant.
Before Chief Justice Smith
Chari L. Kelly, Justice
*1 The City of Houston appeals from the trial court’s order denying its motion for summary judgment, in which the City asserts that the court lacks jurisdiction over claims for declaratory relief made by appellee Texas Propane Gas Association (TPGA). Because we determine that the trial court erred in concluding that TPGA met its burden to plead facts affirmatively demonstrating that it has associational standing to bring its claims, we will reverse and remand to the trial court to allow TPGA an opportunity to cure this pleading defect.
Chapter 113 of the Texas Natural Resources Code, also known as the Liquefied Petroleum Gas (LP-Gas) Code, provides that the Railroad Commission of Texas “shall administer and enforce the laws of this state and the rules and standards of the commission relating to liquefied petroleum gas.” .403 (Railroad Comm’n of Tex., LP-Gas Safety Rules).
In 2017 TPGA filed suit against the City challenging the legality of several “ordinances and regulations” that were passed by the Houston City Council in 2015 and which took effect in early 2016. According to its petition, TPGA is a “trade association representing a statewide membership of companies and individuals actively engaged in the liquefied petroleum gas (‘LP-gas’ or ‘propane’) industry.” In general, the ordinances challenged by TPGA amended the City’s Fire Code and placed new restrictions on the ability to store, use, handle, or dispense LP-Gas within the City’s jurisdiction. According to TPGA, the ordinances impose more restrictive conditions on the LP-Gas industry than those imposed by the Commission’s LP-Gas Safety Rules. TPGA sought a declaration that these ordinances and resulting regulations are invalid because they are pre-empted by Section 113.054 states:
The rules and standards promulgated and adopted by the [Railroad Commission] under section 113.051 preempt and supersede any ordinance, order, or rule adopted by a political subdivision of this state relating to any aspect or phase of the liquified petroleum gas industry.
Tex. Nat. Res. Code § 113.054. Specifically, TPGA requested that the court declare the following:
Those portions of City of Houston’s Ordinance Nos. 2015-1108, 2015-1289, and 2015-1316, that adopted or amended Chapter 61 of the Houston Amendments of the 2012 International Fire Code or purported to otherwise regulate the LP-Gas industry, together with Chapter 61 of the Houston Amendments of the 2012 International Fire Code itself, ... are invalid and ineffective to the extent they regulate to any aspect of the LP-Gas industry ....
In the alternative, TPGA requested declarations that certain portions of the City’s regulations are invalid because they are more restrictive than the LP-Gas Safety Rules, including from Chapter 61 of the Fire Code: (1) “6101.02 relating to fees and permits, (2) “6101.2 and 6103.3 relating to aggregate water capacity of LP-Gas containers,” (3) “6101.3 relating to the required submission of applications and/or construction documents,” and (4) “6104.2 relating to maximum storage capacity within certain storage capacity within districts of limitation.” TPGA also challenged what it contends are more restrictive provisions found in Chapter 1, entitled “Scope and Administration,” generally setting out the procedural mechanisms for enforcing the Fire Code’s substantive regulations.
*2 TPGA subsequently filed a traditional motion for summary judgment on its claims against the City. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8). In three issues, the City asserts that the trial court erred in concluding that it has subject-matter jurisdiction to consider TPGA’s claims.
STANDARD OF REVIEW
Subject-matter jurisdiction is essential to the authority of a court to decide a case. Id. at 226-27. But if the pleadings affirmatively negate the existence of jurisdiction, the motion should be granted. Id.
In addition, we may consider evidence that the parties presented below and must do so when necessary to resolve jurisdictional issues. Lazarides, 367 S.W.3d at 797.
*3 Whether a trial court has subject-matter jurisdiction is a question of law, which we review de novo. Bacon v. Texas Historical Comm’n, 411 S.W.3d 161, 171 (Tex. App.—Austin 2013, no pet.).
In its first and third issues on appeal, the City contends that the trial court erred in denying its jurisdictional challenge on grounds that there is no justiciable controversy between the parties. See Texas Quarter Horse Ass’n v. American Legion Dep’t of Tex., 496 S.W.3d 175, 180 (Tex. App.—Austin 2016, no pet.) (referring to doctrines of ripeness, mootness, and standing as justiciability doctrines derived from Texas Constitution). Specifically, in its first issue, the City asserts that the relevant pleadings and jurisdictional evidence fail to establish that TPGA has standing to sue as an organization on behalf of its members. In its third issue, the City argues that the relevant pleadings and jurisdictional evidence fail to establish that TPGA’s claims are not ripe or, alternatively, are moot. We turn first to the City’s arguments with respect to standing.
“Standing is a prerequisite to subject-matter jurisdiction, and subject-matter jurisdiction is essential to a court’s power to decide a case.” Texas Ass’n of Bus., 852 S.W.2d at 444.
Standing is a constitutional prerequisite to filing suit for both individuals and associations. Hunt, 432 U.S. at 343). In its motion and on appeal, the City has focused its arguments on whether TPGA has adequately shown that it meets the first prong of the Hunt test.
*4 The purpose of the first prong is “simply to weed out plaintiffs who try to bring cases, which could not otherwise be brought, by manufacturing allegations of standing that lack any real foundation.” Id. (quoting Lomas, 223 S.W.3d at 307.
In its pleadings, TPGA alleges that one of its members, Green’s Blue Flame Gas Company, Inc., became involved on a project that included installation of an LP-Gas tank “to fuel buses serving the Texas Medical Center.” “During the course of this project, [an inspector from the Houston Fire Marshall’s Office] refused to evaluate the LP-Gas installation under the LP-Gas Safety Rules and instead imposed inapplicable and more restrictive conditions and requirements from Houston’s Fire Code and the 2006 and 2012 International Fire Codes simply on the basis that the inspector ‘felt’ that they were ‘relevant and increased public safety.’ ” According to TPGA’s allegations, although Green’s Blue Flame Gas had filed the form for installation required with the Railroad Commission, the inspector refused to issue a permit beyond 90 days and charged Green’s Blue Flame Gas Company $2,180 in permitting fees. These undisputed allegations, taken as true, demonstrate that at least one member of the association has already been assessed fees for a permit that is currently required by Chapter 61 of the Houston Fire Code but not by the rules promulgated by the Railroad Commission. We conclude that TPGA has satisfied the first prong of the Hunt test for associational standing to the extent TPGA is challenging this permitting requirement on LP-Gas.
In its pleadings, TPGA also generally alleges that inspectors have reviewed projects involving installation of LP-Gas tanks and have issued red tags for “unspecified violations of Houston’s Building Code” to unspecified persons. In one instance, a City inspector issued a “red tag” and directed a home owner to remove a propane bottle from under a mobile home, and in another instance, an inspector served a “Notice of Deficiencies” on a homeowner, a customer of a TPGA member, related to an LP-Gas tank used to fuel a pool heater. Similarly, TPGA describes an incident where another customer of a TPGA member installed “a rack housing” for LP-Gas cylinders and was later notified by an inspector that an operational permit was required based on the number and capacity of cylinders installed. In describing these instances, TPGA’s pleadings fail to explain how any TPGA member, as opposed to its customer, has suffered an injury “fairly traceable” to enforcement of what it contends are invalid regulations on LP-Gas. See Stop the Ordinances Please v. City of New Braunfels, 306 S.W.3d 919, 929 (Tex. App.—Austin 2010, no pet.) (explaining that indirect economic injury resulting from regulations placed on plaintiff’s customers is substantially more difficult to establish than direct injury and that plaintiffs claiming that challenged ordinance “discourage[ed] tourists from visiting,” and thus had “chilling effect” on their businesses, failed to meet burden).
*5 Although, as previously discussed, TPGA has established that at least one of its members has suffered an “injury in fact” that is “fairly traceable” to permitting requirements imposed by the City, TPGA’s challenge to the ordinances is not limited to permitting requirements. Instead, in its pleadings to the trial court, TPGA broadly requests a declaration that “those portions of the City of Houston’s [ordinances] that adopted or amended [Chapter 61] or purported to otherwise regulate the LP-Gas industry, together with [Chapter 61] itself ... are invalid and ineffective to the extent they relate to any aspect of the LP-Gas industry.” The City argues that because standing must be examined on a claim-by-claim basis and because the TPGA effectively seeks a declaration that all LP-Gas regulations promulgated by the City are invalid, TPGA must establish associational standing as to each regulation but has failed to do so. See Heckman, 369 S.W.3d at 153, 156. In response, TPGA explains that is has sufficiently established associational standing as to each of its claims because it effectively has only one claim: a declaration that the Railroad Commission’s LPG Safety Rules “preempt and supersede any ordinance, order, or rule adopted by a political subdivision of this state relating to any aspect or phase of the liquefied petroleum gas industry.” (Emphasis added.). In other words, in TGPA’s view, its sole claim is a challenge to the City’s regulation of LP-Gas as a whole, and it has sufficiently demonstrated that at least one or more of its members has suffered injury as result of that regulation.
In effect, TPGA challenges all of the City’s regulations “relating to” the LP-Gas industry. Thus, to demonstrate that the first prong for associational standing has been satisfied as to TPGA’s sole claim—as it has been framed by TPGA—the pleadings and evidence must demonstrate that at least one of its members has suffered a particularized injury, distinct from the general public, that is “fairly traceable” to each of the City’s regulations relating to the LP-Gas industry—whatever TPGA contends those are—that the requested declaration will “redress.” See Meyers, 548 S.W.3d at 485. Based on our review of the pleadings, liberally construed and taken as true, we cannot conclude that this burden has been satisfied.
In its pleadings, TPGA does not specifically identify for the trial court which regulations “relat[e] to” the LP-Gas industry or where those regulations are found in the City Code, other than to assert that the entirety of Chapter 61 of the Fire Code consists of impermissible regulations. Similarly, TPGA does not identify what, if anything, the City’s regulations require of TPGA members and it and has not pleaded any facts demonstrating an injury from direct restrictions imposed on its members, apart from the one previously mentioned permitting requirement. Because TPGA has not identified what action or inaction is required by the regulations and from whom, we cannot evaluate whether a member of TPGA has suffered or imminently will suffer an invasion of “some ‘legally protected’ interest that is sufficiently unique to the member, as distinguished from the general public,” as a result of the challenged regulatory scheme. See Stop the Ordinances Please, 306 S.W.3d at 929. Similarly, because the relief requested, on its face, does not ask the trial court to determine which regulations, if any, qualify as being sufficiently “relat[ed] to any aspect or phase of the liquefied petroleum gas industry,” we cannot conclude that the relief requested by TPGA would effectively redress any injury caused by the City’s regulations related to LP-Gas.
In conclusion, TPGA has failed to demonstrate the members it represents have a sufficient personal stake in the controversy such that “the lawsuit would not yield a mere advisory opinion or draw the judiciary into generalized policy disputes that are the province of other branches.” Tex. R. App. P. 43.3. Accordingly, we turn to the City’s remaining appellate issues.
Ripeness and Mootness
*6 Next, we consider the City’s argument that the trial court lacks subject-matter jurisdiction because TPGA’s claims are not ripe or, alternatively, have become moot. Like standing, ripeness and mootness doctrines concern whether a justiciable controversy exists between the parties and serve to bar the court from issuing advisory opinions. Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851-52 (Tex. 2000)). Conversely, the mootness doctrine applies when a justiciable controversy existed between the parties at the time the case arose, but the live controversy no long exists because of subsequent events. Id.
In this case, the City’s mootness and ripeness theories turn on an exception to preemption found in Section 113.054, which is the basis of TPGA’s preemption claim, states in relevant part:
A political subdivision may petition the commission’s executive director for permission to promulgate more restrictive rules and standards only if the political subdivision can prove that the more restrictive rules and standards enhance public safety.
Section 113.054 “without also affording the City its statutory protections.” Thus, unless and until a formal petition process is implemented by the Commission, TPGA’s claims are not ripe. Similarly, in the alternative, the City asserts that the summary-judgment evidence shows that it has in fact received informal permission from the Commission to continue to enforce its local ordinances and regulations related to LP-Gas. The City reasons that this evidence establishes that the statutory exception to preemption has been met and that, as a result, TPGA’s claims have become moot.
The issue of whether the City has met the statutory exception under Section 113.054 and, if so, whether the ordinances and regulations are excepted from preemption because the City has obtained permission from the Commission “to promulgate more restrictive rules and standards.” Finally, the City’s assertion that the evidence establishes that it in fact received permission from the Commission through informal measures is, in effect, an argument that the evidence establishes that it has met the statutory exception and that TPGA cannot, as a matter of law, prevail on the merits of its suit. Because the City’s arguments regarding the statutory exception go to the merits of the case and not to the court’s power to decide the case, the City’s third issue on appeal is overruled.
Jurisdiction of Civil Courts over Penal Ordinances
Finally, we turn to the City’s second appellate issue. In this issue, the City asserts that the trial court erred in denying its motion for summary judgment for lack of jurisdiction because the ordinances and regulations at issue are penal in nature and, as a result, the civil trial court does not possess jurisdiction to determine their validity.
*7 Texas courts have long recognized that the meaning and validity of a penal statute or ordinance should ordinarily be determined by courts exercising criminal jurisdiction. See Passel v. Fort Worth Indep. Sch. Dist., 440 S.W.2d 61, 63 (Tex. 1969)). “A person may continue his activities until he is arrested and then procure his release by showing that the law is void.” Id.
When a penal statute or ordinance is being enforced and the plaintiff is being prosecuted or the threat or prosecution is imminent, an equity court will not interfere with the ordinary enforcement of the statute or ordinance unless (1) the statute or ordinance is unconstitutional and (2) its enforcement will result in irreparable injury to vested property rights. Id. This limitation on jurisdiction applies not only in suits where the plaintiff seeks to enjoin enforcement but also in suits seeking a declaratory judgment as to the constitutionality of the statute or ordinance. Ryan, 314 S.W.3d at 142 (“The considerations that lead courts of equity to deny injunctive relief against enforcement of the criminal laws apply with equal force to an action for a declaratory judgment construing a penal statute.”).
Recently, in City of Austin v. Austin City Cemetery Ass’n, 28 S.W. 528, 529-30 (Tex. 1894)).
Here, the dispute on appeal centers on whether the ordinances and regulations at issue are penal in nature and, if so, whether their enforcement will result in irreparable injury to vested property rights. The City argues that Sections 104 and 109 of the Fire Code, found in Chapter 1, provide the enforcement mechanism for any substantive requirements in the Fire Code, including Chapter 61, and that these provisions make clear that violations of the Fire Code are punishable as criminal offenses. In response, TPGA asserts that the challenged LP-Gas regulations are not criminal regulations because they do not, on their face, impose criminal penalties or criminalize certain conduct.
*8 Assuming without deciding, however, that the challenged ordinances and regulations are penal in nature, we conclude that the trial court did not err in determining that it has jurisdiction over TPGA’s claims. Section 109.4 of the City’s Fire Code provides that the doing of any act that the Fire Code declares to be unlawful, and for which no specific penalty is provided, “shall be punished by a fine of not less than $500.00 and no more than $2,000.00” and that “each day any violation of this code shall continue shall constitute a separate offense.” Based on this per day-violation fine and on the Texas Supreme Court’s recent decision in City of Laredo, we must conclude that TPGA members are “effectively preclude[d]” “from testing the ban’s constitutionality in defense to a criminal prosecution.” See id. Because there is a “threat of irreparable injury to vested property rights,” TPGA’s suit to declare certain Fire Code regulations invalid may be brought in civil court. See id. (citing Morales, 869 S.W.2d at 945). We overrule the City’s second issue on appeal.
Because TPGA failed to plead facts affirmatively demonstrating subject-matter jurisdiction, we conclude that the trial court erred in denying the City’s motion for summary judgment for lack of jurisdiction and reverse the trial court’s order. We also conclude, however, that TPGA’s pleadings do not affirmatively negate the existence of subject-matter jurisdiction. Accordingly, we remand this cause so that TPGA may have a reasonable opportunity to amend its pleadings, if possible, to demonstrate that it has standing to bring its suit for declaratory relief.
Dissenting Opinion by Chief Justice Rose
Jeff Rose, Chief Justice
I respectfully dissent because the majority’s decision imposes unreasonable obstacles to associational standing.
Under the first prong of the Hunt test, an association has standing to sue on behalf of its members when “ ‘its members would otherwise have standing to sue in their own right.” New York State Club Ass’n v. City of New York, 487 U.S. 1, 9 (1988). The Texas Supreme Court has warned that “[t]his requirement should not be interpreted to impose unreasonable obstacles to associational representation.” Id.
With little analysis and no citation to supporting authority, the majority holds that an association asserting a preemption challenge to a regulatory scheme that undeniably relates to its members’ industry “must demonstrate that at least one of its members has suffered a particularized injury, distinct from the general public, that is ‘fairly traceable’ to each of the City’s regulations relating to the LP-Gas industry—whatever TPGA contends those are—that the requested declaration will ‘redress.’ ” Texas Ass’n of Bus., 852 S.W.2d at 447.
Applying the first prong of Hunt as directed by the supreme court, I would hold that TPGA has satisfied its burden of showing that its members have standing to sue in their own right. TPGA’s suit asserts a preemption challenge to the City’s authority to promulgate ordinances regulating the LP-gas industry. Specifically, TGPA claims that “under section 113.054 preempts all local attempts to regulate the LP-gas industry. As TPGA notes in its briefs to this Court, “Whether Houston has one such regulation or one thousand, [section] 113.054 preempts them all as a matter of law.”
In support of its standing to bring this preemption claim and pursue the relief it seeks, TPGA alleges, and supports with affidavits, that it is a trade association representing a statewide membership of companies and individuals actively engaged in the LP-gas industry, and that its members have suffered adverse action and consequences as a result of the enforcement of the City’s ordinances regulating the LP-gas industry. Thus, on the record before us, TPGA has satisfied the first prong of the Hunt test. See Texas Ass’n of Bus., 852 S.W.2d at 440 (applying first prong and holding that it was satisfied that association had not “manufactured this lawsuit” because association’s members had been assessed administrative penalties pursuant to the challenged enactments and members remained at risk of penalty under same enactments). Accordingly, I would affirm the district court’s order overruling the City’s plea to the jurisdiction.1
Generally, appeals may only be taken from final judgments and certain appealable interlocutory orders. Tex. Civ. Prac. & Rem. Code § 51.014(a)(8).
I agree with the majority’s conclusions that none of the City’s other issues merit reversal.
Court of Appeals of Texas, Austin.
TEXAS MUTUAL INSURANCE COMPANY, Appellant
Hartford Underwriters Insurance Company, Appellees
Filed: July 3, 2019
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-1-GN-17-005825, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING
Attorneys & Firms
Steven J. Knight, Douglas R. Hafer, Curnutt & Hafer, LLP, 101 E Park Row Dr., Arlington, TX 76010-4426, for Appellee.
R. Scott Placek, Arnold & Placek, P.C., 203 E. Main St., Ste. 201, Round Rock, TX 787664-5269, for Appellant.
Before Justices Triana
Melissa Goodwin, Justice
*1 In this workers’ compensation case, Texas Mutual Insurance Company appeals from the trial court’s order granting the motions for summary judgment of Hofer Builders, Inc. (HBI) and Hartford Underwriters Insurance Company (Hartford) and denying Texas Mutual’s motion for summary judgment. In two issues, Texas Mutual challenges the trial court’s jurisdiction and its finding that HBI’s employee, who was injured out of state, was an employee as described in Tex. Lab. Code § 406.071.
For the following reasons, we affirm the portion of the trial court’s order denying Texas Mutual’s motion for summary judgment, but we reverse the portions of the order granting the motions for summary judgment of HBI and Hartford and remand the case to the trial court for further proceedings consistent with this opinion.
To give context to the parties’ dispute, we begin by providing a brief overview of the relevant statutory provision. Chapter 406 of the Texas Labor Code addresses workers’ compensation insurance coverage, see section 406.071 provides:
(a) An employee who is injured while working in another jurisdiction or the employee’s legal beneficiary is entitled to all rights and remedies under this subtitle if:
(1) the injury would be compensable if it had occurred in this state; and
(2) the employee has significant contacts with this state or the employment is principally located in this state.
(b) An employee has significant contacts with this state if the employee was hired or recruited in this state and the employee:
(1) was injured not later than one year after the date of hire; or
(2) has worked in this state for at least 10 working days during the 12 months preceding the date of injury.
Id. § 406.071. The “principal location of a person’s employment is where: (1) the employer has a place of business at or from which the employee regularly works; or (2) the employee resides and spends a substantial part of the employee’s working time.” Id. § 406.072.
HBI is a Texas company in the construction business that does work in many different states across the country. It was incorporated in 1995, and its office is located in Saginaw, Texas. Tom Hofer is HBI’s president. In November 2014, HBI hired David Hope, who was a Florida resident, as a supervisor. After Hofer and Hope’s brother, who were in Texas, discussed offering Hope a job, Hope’s brother called Hope, who was in Florida, from HBI’s office in Texas and offered him a job. Hope previously had been employed by HBI and a predecessor company “for many years up to 2007,” working on construction jobs in Texas and other states.1
*2 After HBI mailed employment-related documents from its office in Texas to Hope in Florida, Hope began working for HBI at a construction site in Louisiana. HBI was a subcontractor on the Louisiana construction project, and Hartford was the workers’ compensation carrier for the general contractor on the project. HBI paid for Hope’s travel from Florida to Louisiana, lodging in Louisiana, and payroll expenses from the HBI office in Texas. According to Hofer, Hope’s next assignments after the Louisiana project would have been at a project in Oklahoma and then a project in Texas. On December 29, 2014, Hope was injured while working at the Louisiana construction site. During the time period between his brother’s phone call to him in November 2014 and his injury in December 2014, Hope was never physically in Texas.
At the time of Hope’s injury, HBI had a “Worker’s Compensation and Employers’ Liability Insurance Policy” (HBI policy) with Texas Mutual for the state of Texas. See generally Tex. Ins. Code §§ 2054.102–.553; see id. § 2054.151 (explaining that Texas Mutual serves as “insurer of last resort”). HBI’s policy included an endorsement entitled “Limited Reimbursement for Texas Employees Injured in other Jurisdictions” (the Endorsement). The Endorsement stated in relevant part:
This policy does not provide “other states” insurance coverage. This endorsement provides reimbursement coverage to you for those Texas employees who are described in the Texas Labor Code §§ 406.071–.072. Therefore the coverage is for injuries to your Texas employees that occur in another state if (i) the injury would have been compensable had it occurred in Texas and (ii) the employee has significant contacts with Texas or the employment is principally located in Texas. An employee has significant contacts with Texas if the employee was hired or recruited in Texas, and (i) the employee was injured not later than one year after the date of hire; or (ii) has worked in Texas for at least ten working days during the twelve months preceding the date of injury.
Employees hired or recruited by you outside Texas to work in another state are specifically excluded from the terms and provisions of this policy. If you conduct business in states other than Texas, you must comply with those state laws. You must promptly notify your agent before you begin work in any jurisdiction other than Texas. We are not authorized to provide workers’ compensation insurance in any jurisdiction other than Texas. You are responsible for all of your legal obligations for your failure to comply with requirements of the workers’ compensation laws of any jurisdiction other than Texas.
The first paragraph of the Endorsement imports statutory language from Tex. Lab. Code § 406.071. When the Endorsement applies, Texas Mutual agreed to reimburse HBI for benefits paid under the workers’ compensation laws of other states, including Louisiana.
On January 5, 2015, HBI filed an “Employer’s First Report of Injury” concerning Hope’s injury with Texas Mutual, and a copy of the report was filed with the Department of Insurance, Division of Workers’ Compensation (the Division). See id. § 409.005 (requiring employer to report work-place injury to insurance carrier and insurance carrier to file report with Division on behalf of policyholder). On January 14, 2015, Texas Mutual filed with the Division a “Notice of Denial of Compensability/Liability and Refusal to Pay Benefits” (Notice of Denial) based on its determination that Hope “[was] not eligible for Texas benefits because he [did] not meet the extraterritorial coverage requirements of 28 Tex. Admin. Code § 124.3(a) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Investigation of an Injury and Notice of Denial/Dispute) (requiring carrier to investigate injury and file notice of denial if carrier believes it is not liable). Texas Mutual’s stated position was that “David Hope was not hired or recruited in Texas, does not have significant contacts with Texas and his employment is not principally located in Texas.”
*3 Hope did not seek to recover Texas workers’ compensation benefits but sought to recover Louisiana workers’ compensation benefits. On January 15, 2015, Hope filed a “Disputed Claim for Compensation” with the Louisiana’s Office of Workers’ Compensation, listing HBI as his employer and Texas Mutual as HBI’s insurance carrier. Hope described the accident and his disability and listed a Florida address for his residence. In October 2016, Louisiana’s Office of Workers’ Compensation entered a judgment that ordered HBI to indemnify “for all payments made, or to be made, by Hartford on behalf of [the general contractor on the project] for work related injuries sustained by David Hope on December 29, 2014, while the direct employee of [HBI].” See La. Rev. Stat. §§ 23:1061 (addressing principal contractor’s liability to pay workers’ compensation benefits as statutory employer and entitlement to indemnity), 1063 (stating that “principal contractor shall be entitled to indemnity from his subcontractor for compensation payments paid by the principal contractor on account of an accidental injury to the employee of the subcontractor”).
Texas Mutual brought a declaratory judgment action against HBI in February 2016, seeking a declaration that it did not have a duty to defend, indemnify, or reimburse HBI regarding Hope’s claim for Louisiana workers’ compensation benefits. HBI answered and counterclaimed for breach of contract and declaratory judgment. HBI contended that Texas Mutual had breached the terms of the HBI policy by failing to reimburse HBI for the amount of Louisiana workers’ compensation benefits paid to Hope and sought a declaration from the court that it was entitled to reimbursement coverage under the Endorsement. Shortly after the judgment against HBI was entered in the Louisiana proceeding, Hartford intervened in this lawsuit, asserting causes of action against Texas Mutual for declaratory judgment, contribution, and subrogation. Hartford sought a judgment against Texas Mutual in the amount that Hartford had paid to Hope for Louisiana workers’ compensation benefits and declarations that Texas Mutual had a duty to defend, indemnify, and reimburse HBI regarding Hope’s claim for Louisiana workers’ compensation benefits and the indemnification required in the Louisiana workers’ compensation judgment.
The parties filed competing motions for summary judgment with evidence. HBI’s motion sought traditional summary judgment on the ground that the following three elements under the Endorsement had been met: (i) Hope’s injury would be compensable if it had occurred in Texas; (ii) Hope was hired or recruited in Texas; and (iii) Hope was injured not later than one year after he was hired. HBI attached evidence to its motion, including a copy of the HBI policy, an affidavit by Hofer, excerpts from the deposition of Hofer, and a copy of the judgment from the Louisiana proceeding. Hartford also sought summary judgment on the ground that the same three elements of the Endorsement had been met. Hartford’s evidence included copies of the general contractor’s policy with Hartford and the judgment from the Louisiana proceeding.
Texas Mutual’s motion sought traditional summary judgment on its claims and the claims of HBI and Hartford on the ground that Hope was not a Texas employee because he was not hired or recruited in Texas.2 Texas Mutual also argued that the trial court did not have jurisdiction to make a contrary finding to Texas Mutual’s determinations in its Notice of Denial that Hope was not a Texas employee and that there was no coverage under the Endorsement because no party challenged its determinations administratively. Texas Mutual’s summary judgment evidence included discovery responses, excerpts from the deposition of Hofer, documents from the Louisiana proceeding, and documents filed with the Division concerning Hope’s injury. The parties also filed responses, supplemental briefing, and replies.
*4 Following a hearing, the trial court signed an order that granted Hartford’s and HBI’s motions for summary judgment and denied Texas Mutual’s motion for summary judgment.3 The trial court thereafter signed an order that granted an agreed motion for severance and abatement, severing the claims that were disposed of by summary judgment into a new cause number.4 This appeal followed from the new cause number.
In its first issue, Texas Mutual argues that the trial court did not have jurisdiction to find that Hope was a Texas employee as defined by section 406.071 of the Labor Code because the Division has exclusive jurisdiction to make that determination in the first instance. In its order, the trial court made the following finding as to its jurisdiction:
The Court finds that it has jurisdiction to determine the rights of the parties under the contract at issue in the above-referenced matter because the issue of whether reimbursement is triggered under the Limited Reimbursement for Texas Employees Injured in Other Jurisdictions endorsement of the Texas Mutual Insurance Company policy at issue lies outside the exclusive jurisdiction of the Division of Workers’ Compensation of the Texas Department of Insurance.
Contrary to the trial court’s finding of jurisdiction, Texas Mutual argues that it invoked the Division’s exclusive jurisdiction when it filed the Notice of Denial with the Division. According to Texas Mutual, HBI and Hartford were “subclaimants” subject to the administrative process and, therefore, they were required to utilize this process to dispute the Notice of Denial. See Texas Labor Code §§ 406.071–.072.” Texas Mutual contends that the Division had exclusive jurisdiction to determine whether Hope was a Texas employee as described in those sections of the Labor Code and, therefore, a Division determination of this question was a prerequisite to any reimbursement claim under the Endorsement. Because no party challenged the Notice of Denial administratively, Texas Mutual argues that it “has been relieved of any liability under the Policy” and, therefore, the only relief that the trial court had jurisdiction to grant was summary judgment for Texas Mutual.
“[U]nder the exclusive jurisdiction doctrine, the Legislature grants an administrative agency the sole authority to make an initial determination in a dispute.” Subaru, 84 S.W.3d at 221.
*5 The legislature has granted the Division exclusive jurisdiction over claims for Texas workers’ compensation benefits. See Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 436–37 (Tex. 2012) (discussing exhaustion of administrative remedies in context of claim for Texas workers’ compensation benefits and steps of administrative process).
In this case, however, Hope’s entitlement to workers’ compensation benefits was resolved under Louisiana law and, because he sought and received Louisiana benefits, he was not entitled to Texas benefits. See Tex. Lab. Code § 406.075 (stating that “injured employee who elects to pursue the employee’s remedy under the workers’ compensation laws of another jurisdiction and who recovers benefits under those laws may not recover under this subtitle”). Thus, the parties’ dispute does not concern Texas benefits such that the requirement to exhaust administrative remedies under section 410.251 would apply. See id. §§ 410.002 (explaining that proceeding before Division “to determine the liability of an insurance carrier for compensation for an injury or death under this subtitle is governed by this chapter”), 410.251 (requiring exhaustion of administrative remedies).
As support for its position that HBI and Hartford were “subclaimants” who were required to challenge Texas Mutual’s Notice of Denial by utilizing the administrative process, Texas Mutual cites section 409.009 of Labor Code to recover reimbursement for Texas benefits paid and affirming administrative decision that carrier was entitled to reimbursement for Texas benefits paid). In contrast to the disputes in those cases, the dispute here arises out of workers’ compensation benefits paid under the laws of Louisiana to an employee who was injured in Louisiana.
*6 Based on our review of the parties’ competing claims that arise from the Louisiana benefits paid to Hope, we conclude that the trial court correctly found that it had jurisdiction “to determine the rights of the parties under the contract at issue.” See Texas Workers’ Comp. Comm’n, Appeal No. 020771, 2002 WL 1359119, at *3 (May 22, 2002) (explaining that its “jurisdiction is limited to consideration of issues relating to Texas workers’ compensation benefits and any entitlement to reimbursement thereof” and concluding, in context of worker who was injured in Alabama and recovered Alabama benefits, that “general question of reimbursement of Alabama benefits is not and cannot be decided by the Commission’s hearing officer”). On this basis, we overrule Texas Mutual’s first issue.
In its second issue, Texas Mutual argues that, if this Court reaches the merits, the trial court’s judgment must be reversed because “Mr. Hope was neither hired nor recruited in Texas.” Texas Mutual focuses on the undisputed summary judgment evidence that Hope was not physically present in Texas from the time that he was recruited and hired until his injury in Louisiana. On this basis, Texas Mutual argues that this Court should reverse the summary judgment rulings in favor of appellees and render summary judgment for Texas Mutual.
Standards of Review
“A trial court’s ruling on a motion for summary judgment is reviewed de novo.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993).
Resolution of Texas Mutual’s issue also requires this Court to interpret the Endorsement. “When construing an insurance policy, we ordinarily ‘ascertain and give effect to the parties’ intent as expressed by the words they chose to effectuate their agreement.’ ” Ritchie v. Rupe, 443 S.W.3d 856, 867 (Tex. 2014)).
*7 Further, because the Endorsement is a standard form approved by the Division, see Railroad Comm’n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 625 (Tex. 2011))).
Appellees’ Motions for Summary Judgment
In their motions for summary judgment, HBI and Hartford argued that they were entitled to summary judgment on their declaratory judgment claims based on the reimbursement coverage provided in the Endorsement because the evidence conclusively established that Hope met the requirements of Texas Emp’rs’ Ins. Ass’n v. Dossey, 402 S.W.2d 153, 156 (Tex. 1966) (concluding, under prior version of extraterritorial provision of Texas workers’ compensation laws, that whether employee has status of Texas employee generally is “function of the trier of fact”).
The parties join issue with whether the place of hiring or recruitment is determined based on the employee’s physical location when hired or recruited. In resolving this question, we begin our analysis with the plain language of the phrase “hired or recruited in this state” as it is used in the Endorsement. See Tex. Gov’t Code § 311.011(a) (stating that “[w]ords and phrases shall be read in context and construed according to the rules of grammar and common usage”).
*8 The next paragraph in the Endorsement expressly provides: “Employees hired or recruited by you outside Texas to work in another state are specifically excluded from the terms and provisions of this policy.” The subject of this sentence also is the “employee,” further emphasizing that it is the employee’s location when the employee is hired or recruited that is determinative. See Webster’s at 1604 (defining “outside” as “a place or region that is situated beyond an enclosure, boundary, or other limit” and “beyond the limits of”). Thus, the plain language of the phrase in the context of the Endorsement provides that the employee’s location determines the place of hiring or recruitment for purposes of the significant-contacts analysis.
Notwithstanding the Endorsement’s plain language, appellees argue that the use of “in” in the phrase “hired or recruited in this state” does not require the employee’s physical presence in this state as long as the employee was hired to work in Texas at some point.5 For this Court to adopt appellees’ interpretation of the phase, however, we would have to add language to the phrase, such as “hired or recruited to work in this state,” which we decline to do. See Texas Emp. Ins. Ass’n v. Volek, 69 S.W.2d 33, 35 (Tex. Comm’n App. 1934, holding approved) (concluding that clause “ ‘hired in this state’ ” “certainly does not have reference to the place where the hiring was originally made”).
The original version of the extraterritorial statute provided: “If an employee, who has been hired in this State, sustained injury in the course of his employment he shall be entitled to compensation according to the Law of this State, even though such injury was received outside of the State.” Act of Mar. 28, 1917, 35th Leg., R.S., ch. 103, part I, § 19, 1917 Tex. Gen. Laws 269, 281; see Tex. Lab. Code §§ 406.071(b), .072. Thus, we find distinguishable appellees’ cited cases that address prior versions of the extraterritorial statute.
*9 We observe that Division decisions interpreting the statutory language in Texas Workers’ Comp. Comm’n, Appeal No. 92724, 1993 WL 292247, at *1, 6–7 (Feb. 16, 1993) (concluding that evidence was sufficient to support hearing officer’s finding that employee was not recruited or hired in Texas where evidence showed that employee “was interviewed in [New Mexico]” and “actually hired in [New Mexico] when [the employer] called him from [Texas office] to communicate the decision of the management team and discuss salary and starting dates”).
We further observe that interpreting the phrase “hired or recruited in this state” by focusing on the employee’s physical location is consistent with extraterritorial statutes as a whole. See Hale v. Texas Emp’rs’ Ins. Ass’n., 150 Tex. 215, 239 S.W.2d 608 (Tex. 1951)).
The following summary judgment evidence was undisputed: (i) when Hope spoke with his brother by telephone in November 2014 about working for HBI, Hope was in Florida;6 and (ii) after he accepted employment with HBI, Hope traveled directly to Louisiana where he was injured a short time later at the construction site. Applying the plain language of the phrase “hired or recruited in this state” to the evidence of Hope’s physical location during the relevant time frame, the above-cited evidence supports a finding that Hope was not hired or recruited in Texas. Cf. American States Ins. Co. v. Garza, 657 S.W.2d 522, 523–24 (Tex. App.—Corpus Christi 1983, no writ) (concluding, under prior version of extraterritorial provisions of Texas workers’ compensation laws, that employee who was injured on job in Indiana was entitled to Texas benefits because employee conclusively established that he was Texas resident and that “he was recruited here in Texas” where evidence showed that employee “was recruited in Brownsville to work ... in a tomato canning plant in the state of Indiana”).
*10 As support for the trial court’s summary judgment in their favor, appellees focus on the evidence that Hofer and HBI’s office were in Texas; that the offer to Hope, payments to him, and instructions to him were made from Texas; that Hope’s prior employment with HBI was in Texas; and that Hope would work on HBI projects in Texas in the future. The evidence was undisputed that Hofer decided to hire Hope while Hofer was in Texas. In his affidavit, Hofer also averred:
In all ways, David Hope was recruited and hired in Texas.... As before, David Hope would be working for HBI on its projects across the United States, including those projects in Texas, as the circumstances of the company required. At the time David Hope was hired in 2014, HBI had made arrangements to work on three upcoming projects: 1) the Penroe Apartments project in the State of Texas; 2) the Millennium project in Oklahoma; and 3) the Burbank Drive Apartments project in Louisiana.... David Hope was not specifically hired to work on any one of these projects, but instead was hired to work on any or all of the projects as the course of his employment required. His initial work was to be on the [Louisiana] project. From there, he and the other HBI crew would be sent to next work on the Millennium project in Oklahoma and then the Penroe Apartments project in Texas.
As to Hofer’s averment that “Hope was recruited and hired in Texas,” it is a conclusory statement that is not sufficient to establish that fact. See Lopez v. Bucholz, No. 03-15-00034-CV, 2017 WL 1315377, at *3, 2017 Tex. App. LEXIS 3071 at *9 (Tex. App.—Austin Apr. 7, 2017, no pet.) (mem. op.) (explaining that conclusory statements in affidavits are not sufficient to raise fact issues).
We also conclude that the evidence that the telephone calls to Hope originated in Texas and that HBI anticipated Texas work assignments for Hope after the completion of the Louisiana project did not conclusively establish that Hope was hired or recruited in Texas. See Tarr, 556 S.W.3d at 278.
*11 On appeal, HBI and Hartford alternatively argue that, even if the summary judgment evidence did not conclusively establish that Hope was hired or recruited in Texas, a separate ground supports the trial court’s summary judgment in their favor. They argue that the undisputed evidence established that Hope’s employment was principally located in Texas. See Tex. R. Civ. P. 166a(c) (requiring motion for summary judgment to state “specific grounds”).
Because we conclude that the summary judgment evidence did not conclusively establish that Hope was hired or recruited in Texas, we conclude that the trial court erred in granting appellees’ motions for summary judgment. On this basis, we sustain Texas Mutual’s second issue in part and turn to Texas Mutual’s argument that the trial court should have granted its competing motion for summary judgment. See Merriman, 407 S.W.3d at 248.
Texas Mutual’s Motion for Summary Judgment
As was the case with appellees’ motions, Texas Mutual’s motion for summary judgment centered on the question of whether Hope was hired or recruited in Texas.7 To be entitled to summary judgment, however, it was Texas Mutual’s burden to conclusively establish that Hope was not an employee within the meaning of Tex. R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.”). On this basis, we conclude that the trial court did not err in denying Texas Mutual’s motion for summary judgment and overrule Texas Mutual’s issue to the extent that it challenges the trial court’s denial of its motion for summary judgment.
*12 For these reasons, we affirm the portion of the trial court’s order denying Texas Mutual’s motion for summary judgment, but we reverse the portions of the trial court’s order granting the motions for summary judgment of HBI and Hartford and remand the case to the trial court for further proceedings consistent with this opinion.
There is conflicting evidence concerning the date that Hope’s previous employment with HBI ended. In one of his affidavits, Hofer averred: “David Hope worked for HBI (and its predecessor company) for many years up to 2014.” In his affidavit filed in the related Louisiana workers’ compensation proceeding, Hofer averred that Hope’s previous employment with HBI ended in 2007. At his deposition in December 2016, Hofer testified that he “guess[ed]” that 2007 was the date and that he did not remember having any contact with Hope between 2007 and 2014.
Although Texas Mutual also asserted that it was entitled to no-evidence summary judgment as to the claims of HBI and Hartford, Texas Mutual’s arguments were based on evidence and, thus, we conclude that its motion was in substance a traditional motion for summary judgment. See id. R. 166a(i).
In the order, the trial court granted HBI’s motion for summary judgment with the exception of its request for attorney’s fees pursuant to the Uniform Declaratory Judgments Act. See Tex. Civ. Prac. & Rem. Code § 37.009 (authorizing court to award “costs and reasonable and necessary attorney’s fees as are equitable and just”). HBI has not challenged the denial of attorney’s fees in this appeal, and the parties have not addressed this portion of the trial court’s order in their briefing to this Court.
The order granting summary judgment was interlocutory because Hartford also brought claims against HBI and those claims remained pending.
Appellees argue “an injured employee qualifies as a Texas employee if he resides in another state and is injured in another state, even before working in Texas, provided that work was contemplated in Texas and he has sufficient contacts with Texas, such as being hired or recruited ‘in’ Texas—a concept that does not require physical presence.”
In his deposition, Hofer answered “yes,” when asked if he “consider[ed] that phone call [with Hope’s brother] the hiring of David Hope for the [Louisiana project].”
In its motion for summary judgment, Texas Mutual also raised the arguments that it raises in its first issue that are based on the Division’s exclusive jurisdiction as a ground that supported summary judgment in its favor. As previously stated, we have concluded that the trial court correctly found that it had jurisdiction to determine the rights of the parties under the Endorsement.
Court of Appeals of Texas, Austin.
Ken BAILEY and Bradley Peterson, Appellants
Carter SMITH, Executive Director; Clayton Wolf, Wildlife Division Director; Mitch Lockwood, Big Game Program Director; and Texas Parks & Wildlife Department, Appellees
Filed: June 28, 2019
*381 FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT, NO. D-1-GN-15-004391, HONORABLE TIM SULAK, JUDGE PRESIDING
Attorneys & Firms
Mr. Jason R. LaFond, Office of the Attorney General of Texas, P. O. Box 12548 (MC 059), Austin, TX 78711-2548, for Appellees.
Ms. Jennifer S. Riggs, Riggs & Ray, P.C., 506 W. 14 St., Suite A, Austin, TX 78701, for Appellants.
Before Justices Smith
Edward Smith, Justice
*382 This is a dispute between commercial deer breeders and the Texas Parks and Wildlife Department (the Department) over the ownership of captive-bred whitetail deer. Ken Bailey and Bradley Peterson each hold a deer breeder’s permit issued by the Department authorizing them “to possess live breeder deer in captivity” and to “engage in the business of breeding breeder deer.” See chronic wasting disease. The Department responded that breeder deer are wild animals and therefore “property of the people of this state.” See id. § 1.011(a). The district court granted the Department’s partial plea to the jurisdiction and motion for summary judgment, denied Peterson’s cross-motion, and awarded the Department its attorneys’ fees. For the reasons that follow, we will affirm.
LEGAL AND FACTUAL BACKGROUND
The Department is broadly responsible for administering the laws related to wildlife and “for protecting the state’s fish and wildlife resources.” See id. §§ 12.001(a), .0011(a). In addition to granting the Department broad enforcement powers to carry out this task, see id. §§ 12.102–.105, the Legislature has authorized the Department to grant certain licenses and permits to assist with managing the state’s resources. See generally id. §§ 43.021–.955 (“Special Licenses and Permits”). Subchapter L concerns the deer breeder’s permit, which authorizes a person to “possess live breeder deer in captivity.” Id. § 43.352(a); see generally id. §§ 43.351–.369 (“Deer Breeder’s Permit”). Specifically, the permit authorizes a person to “engage in the business of breeding breeder deer in the immediate locality for which the permit was issued” and to “sell, transfer to another person, or hold in captivity live breeder deer for the purpose of propagation or sale.” Id. § 43.357(a)(1)–(2). These rights are subject to the Department’s authority to adopt rules concerning “the possession of breeder deer” and the “procedures and requirements for the purchase, transfer, sale, or shipment of breeder deer,” among other subjects. See id. § 43.357(b)(1), (5). Furthermore, moving breeder deer into or out of a facility requires a separate transfer permit issued by the Department.1 Id. § 43.362(b) (providing, with exceptions not relevant here, that “no person may purchase, obtain, sell, transfer, or accept in this state a live *383 breeder deer unless the person obtains a transfer permit”). “Only breeder deer that are in a healthy condition may be ... transferred.” Id. § 43.362(a).
One of the more serious health threats to deer is 31 Tex. Admin. Code § 65.604 (2018) (Tex. Parks and Wild. Dep’t, Disease Monitoring).2 Rule 65.604 prohibits any person from removing deer from a breeder facility that is not “movement qualified” or introducing deer from an unqualified facility without express permission from the Department. See id. § 65.604(a)–(c). A facility “is movement qualified if no CWD test results of ‘detected’ have been returned from an accredited test facility for breeder deer submitted from the facility” and one of three criteria is satisfied:
(1) the facility is certified by the Texas Animal Health Commission (TAHC) as having a CWD Monitored Herd Status of Level A or higher;
(2) less than five eligible breeder deer mortalities have occurred within the facility as of May 23, 2006; or
(3) CWD test results of ‘not detected’ have been returned from an accredited test facility on a minimum of 20% of all eligible breeder deer mortalities occurring within the facility as May 23, 2006.
Id. § 65.604(d). A movement-qualified facility loses that status if it does not meet the requirements of Subsection (d) “by March 31 of any year.” Id. § 65.604(f).
On June 30, 2015, the Department confirmed the first positive test for CWD in Texas captive deer. Subsequent testing found several other infected deer in the same facility. Soon afterwards, the Department’s executive director, Carter Smith, promulgated emergency rules significantly increasing the testing necessary to acquire movement-qualified status. See 40 Tex. Reg. 5549, 5566–5570 (2015) (emerg. rule Tex. Parks & Wild. Code § 12.027. The order also states the Department is authorized to regulate whitetail deer in captivity as “game animals.”
Bailey and Peterson sued the Department seeking declaratory relief invalidating the emergency rules or, in the alternative, *384 certain provisions of the Parks and Wildlife Code. First, they sought a declaration under the Uniform Declaratory Judgment Act (UDJA) that captive-bred deer are private property rather than wild animals. See Tex. Civ. Prac. & Rem. Code § 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.”).
The Department filed an answer and a plea to the jurisdiction asserting sovereign immunity. In its answer, the Department prayed for an award of attorney’s fees for defending against the UDJA claims. The Department subsequently adopted permanent rules with essentially the same movement restrictions and heightened testing requirements as the emergency rules. See 41 Tex. Reg. 5631, 5726–41. Peterson and Bailey amended their pleadings to challenge the permanent rules (CWD Rules). Bailey then nonsuited his claims.
After various proceedings that do not concern us here, the Department, Smith, Lockwood, and Wolf filed an amended plea to the jurisdiction and motion for summary judgment. The Department asserted the court lacked jurisdiction to decide Peterson’s claim for an ownership declaration and that it was entitled to summary judgment on his other two claims because Peterson did not possess an ownership interest in his breeder deer. Peterson filed a cross-motion for summary judgment.
The district court heard arguments, reviewed evidence submitted by the parties, and signed an order providing:
IT IS ORDERED that [the Department]’s Partial Plea to the Jurisdiction that the Court lacks jurisdiction over Plaintiffs request for a declaration of deer ownership is GRANTED.
IT IS ORDERED that [the Department]’s Partial Plea to the Jurisdiction that the Court lacks jurisdiction over the State Officials with respect to Plaintiffs statutory and constitutional challenges to the rules and the constitutional challenges to the statutes is GRANTED.
In addition to and as an alternative, if necessary, to the Court’s rulings on [the Department’s] Partial Pleas to the Jurisdiction, the Court ORDERS that [the Department’s] Motion for Summary Judgment is GRANTED and that Plaintiff’s *385 Motion for Summary Judgment is DENIED.”
The Court further ORDERS that [the Department]’s Motion for Attorney’s Fees is GRANTED. The Court finds and concludes that [the Department]’s defenses of Plaintiffs claims are so inextricably intertwined that segregation of Defendant’s attorney’s fees is not required. Therefore, the Court ORDERS that [the Department] recover attorney’s fees in the amount of $425,862.50 ($362,967.50 from Plaintiffs Bailey and Peterson jointly and severally, plus $62,895.00 from Plaintiff Peterson, individually). The Court further ORDERS that [Peterson’s] Motion for Attorney’s Fees is DENIED.
This appeal followed. Peterson appeals the district court’s rulings on the plea to the jurisdiction and cross-motions for summary judgment. Bailey and Peterson jointly challenge the fee award.
We first address whether the district court correctly concluded that sovereign immunity barred it from deciding Peterson’s claim for a declaration of ownership and his ultra vires claims against Smith, Lockwood, and Wolf.
Standard of Review and Applicable Law
A plea to the jurisdiction challenges a court’s authority over the subject matter of a claim. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex. 2004).
Sovereign immunity prohibits “suits against the state unless the state consents and waives its immunity.” Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006).
Courts address the applicability of immunity through a two-step process. “The judiciary determines the applicability of immunity in the first instance and delineates its boundaries. If immunity is applicable, then the judiciary defers to the legislature to waive such immunity.” Tex. Gov’t Code § 311.034).
Peterson initially asserts the Department’s immunity does not apply because it requested attorney’s fees. The Texas Supreme Court has held that when a governmental entity “asserts affirmative claims for monetary recovery,” immunity does not apply to counterclaims for monetary relief that are “germane to, connected with, and properly defensive to those asserted by the governmental entity.” id.
Having concluded the Department’s immunity applies, we now turn to whether Peterson pled a waiver of it for his ownership declaration and his ultra vires claims. The UDJA provides that “[a] person whose rights, status, or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under the ... statute ... and obtain a declaration of rights, status, or other legal relations thereunder.” Sefzik, 355 S.W.3d at 621.
Peterson contends that the district court necessarily possessed jurisdiction to render his ownership declaration because his remaining claims turn on that very issue. We agree that Peterson’s ownership interest in his breeder deer is relevant to those claims and decide that issue below, but that overlap does not mean the district court necessarily possessed jurisdiction over this claim. See Ex parte Springsteen, 506 S.W.3d 789, 799 (Tex. App.—Austin 2016, pet. denied))).
Peterson also asserted claims against Smith, Lockwood, and Wolf in their official capacities.6 Sovereign immunity from suit generally extends to state officials acting in their official capacities because “a suit against a government official acting in an official capacity is ‘merely another way of pleading an action against the entity of which the official is an agent.’ ” Heinrich, 284 S.W.3d at 372).
Peterson alleged that Smith, Lockwood, and Wolf acted ultra vires because the CWD Rules do not require the Department to inspect breeder deer for disease before denying a transfer permit, a requirement Peterson finds in Hall, 508 S.W.3d at 240 (concluding chancellor of University of Texas not proper party to ultra vires suit challenging rules adopted by board of regents).
We have concluded that the district court lacked jurisdiction over Peterson’s requested ownership declaration and that Smith, Lockwood, and Wolf are not proper parties to Peterson’s ultra vires claims. Because these pleading defects affirmatively negate the existence of jurisdiction, Peterson is not entitled to an opportunity to amend. See Miranda, 133 S.W.3d at 227.
We next consider whether the district court erred by granting the Department’s motion for summary judgment on Peterson’s due process claims and denying Peterson’s cross-motion.7
Standard of Review
We review a court’s ruling on a motion for summary judgment de novo. Id.
Resolving Peterson’s issues will require us to construe the Parks and *389 Wildlife Code. Statutory construction presents a question of law that we review de novo. (5).
Procedural Due Process
The Texas Constitution provides that no person “shall be deprived of life, liberty, property, privileges or immunities ... except by the due course of the law of the land.” Than, 901 S.W.2d at 929).
“Property interests ‘are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.’ ” City of Dallas v. Trammell, 129 Tex. 150, 101 S.W.2d 1009, 1014 (1937)).
The Texas Supreme Court has described “the right to own private property as ‘fundamental, natural, inherent, inalienable, not derived from the legislature and as preexisting even constitutions.’ ” United States v. General Motors Corp., 323 U.S. 373, 378, 65 S.Ct. 357, 89 L.Ed. 311 (1945)).
Historically, whether property rights could arise in an animal depended on the animal’s common law classification. “The common law divides animals into two groups: animals domitae naturae or mansuetae naturae—that is, tame or tamed, domestic animals—and animals ferae naturae—that is, wild, usually found at liberty.” Id. at 529, 16 S.Ct. 600. In this conception:
The wild game within a state belongs to the people in their collective sovereign capacity. It is not the subject of private ownership, except in so far as the people may elect to make it so; and they may, if they see fit, absolutely prohibit the taking of it, or traffic and commerce in it, if it is deemed necessary for the protection or preservation of the public good.
Tex. Parks & Wild. Code § 1.011(a).
Peterson argues that we should not interpret PPL Mont., LLC v. Montana, 565 U.S. 576, 603–04, 132 S.Ct. 1215, 182 L.Ed.2d 77 (2012) (remarking “the public trust doctrine remains a matter of state law” and is not defined by the Constitution).
Under the public trust doctrine an animal must be “legally removed” from the wild before property rights can arise in *392 it.10 See Tex. Parks & Wild. Code § 43.061(a); see also id. § 63.001(a) (defining whitetail deer as game animals). Another statute more generally provides that “[n]o person may possess a live game animal in this state for any purpose not authorized by this code.” Id. § 63.002. In addition, restriction of the movements of animals by fences (i.e., removing them from their “natural liberty”) does not affect their status as “property of the people of this state.” Id. § 1.013. Read together, these provisions prohibit a person from removing whitetail deer from the wild and holding them in captivity without a permit from the Department.
Peterson maintains that his breeder’s permit either allows for ownership rights to arise in breeder deer according to the common law or actually conveys ownership of breeder deer.11 While a breeder’s permit authorizes a person “sell, transfer to another person, or hold in captivity live breeder deer for the purpose of propagation or sale,” id. § 43.357(a), the permit statute expressly defines “breeder deer” as white-tailed or mule deer “legally held under a permit authorized by this subchapter,” id. § 43.351(1) (emphasis added). Nothing in subchapter L makes breeder deer property of the deer breeder. See generally id. §§ 43.351–.369. Peterson nevertheless maintains that Sections 43.364 and .366 allow for property rights to arise in breeder deer according to common law principles. Section 43.364 states:
Breeder deer may be purchased, sold, transferred, or received in this state only for the purposes of liberation or *393 holding for propagation. All breeder deer and increase from breeder deer are under the full force of the laws of this state pertaining to deer, and those breeder deer may be held in captivity for propagation in this state only after a deer breeder’s permit is issued by the department under this subchapter.
Id. § 43.364. Peterson contends that “the laws of this state” include the common law rule. We agree that the laws of this state include the common law, but we must construe the statutory language in context. See id. §§ 43.364, .366.
Moreover, allowing private property rights to arise in breeder deer is incompatible with the Legislature’s direction that breeder deer are “held under a permit.” See id. § 43.351(1). The Legislature has specifically provided that a breeder’s permit is valid for only a set amount of time, see id. Eggemeyer, 554 S.W.2d at 140). The statutory scheme simply leaves no room for common law property rights to arise in breeder deer.
Construing all these provisions together against the backdrop of In re Wheeler, 431 B.R. 158, 160 (Bankr. N.D. Tex. 2005) (construing Texas law and holding that debtor, a deer breeder, “does not have title to the deer. The deer are considered wild animals, and are property of the people of the State of Texas.”).
That breeder deer are not common law property does not mean that breeder deer have no legal status or protection under the law. Our holding does not affect the rights conferred by a deer breeder’s permit or whether those rights are enforceable against third persons. See, e.g., Smith v. Davis, 426 S.W.2d 827, 831 (Tex. 1968)). Subchapter L is clear that deer breeders have no vested property interest in their breeder deer, and we must enforce the statute as written.
Our conclusion does not address whether a breeder has a vested right in a breeder’s permit. See FKM P’ship, Ltd. v. Board of Regents of Univ. of Hous. Sys., 255 S.W.3d 619, 632 (Tex. 2008) (filing amended petition omitting claim “effectively nonsuits or voluntarily dismisses the omitted claims as of the time the pleading is filed”). Because Peterson elected not to go forward on that claim in the district court, we decline to address it here.16
Peterson and Bailey challenge the district court’s award of $425,862.50 in attorney’s fees in their remaining issues. “In any proceeding under [the UDJA], the court may award costs and reasonable and necessary attorney’s fees as are equitable and just.” Save Our Springs All., Inc. v. City of Dripping Springs, 304 S.W.3d 871, 891 (Tex. App.—Austin 2010, pet. denied).
Jurisdiction to Award Fees
Peterson initially challenges whether the district court had jurisdiction to award fees if it lacked jurisdiction to decide the merits of one of Peterson’s claims. This Court has held that courts possess authority to awards fees in that circumstance because the UDJA authorizes courts to award fees “[i]n any proceeding under the UDJA.” Zurita v. SVH-1 Partners, Ltd., No. 03-10-00650-CV, 2011 WL 6118573, at *8 (Tex. App.—Austin Dec. 8, 2011, pet. denied) (mem. op.) (“The trial court’s conclusion that it lacked jurisdiction to render the requested declarations did not change the nature of the proceeding.”).
Jurisdiction over Bailey
Next, Bailey argues the district court lost jurisdiction over him following his nonsuit. A plaintiff has an absolute right to take a nonsuit at any time before introducing all of his evidence other than rebuttal evidence. Villafani v. Trejo, 251 S.W.3d 466, 469 (Tex. 2008) (“[A] plaintiff’s nonsuit cannot extinguish a defendant’s counterclaim for costs and attorney’s fees.”).
Bailey and Peterson next challenge the district court’s refusal to require the Department to segregate its fees. Texas follows the American Rule for attorney’s fees, which provides that “a party may not recover attorney’s fees unless authorized by statute or contract.” Home Comfortable Supplies, Inc. v. Cooper, 544 S.W.3d 899, 911 (Tex. App.—Houston [14th Dist.] 2018, no pet.).
Peterson and Bailey asserted claims under the UDJA and the APA. Unlike the UDJA, the APA does not authorize a court to award attorney’s fees. See Chapa, 212 S.W.3d at 313–14.
Reasonable and Necessary
We now turn to whether the fee award was reasonable and necessary. Whether fees are reasonable and necessary is an issue of fact. In re National Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017) (orig. proceeding) (“When fee-shifting is authorized, the party seeking to recover those fees bears the burden of establishing the fees are reasonable and necessary.”).
To support its fee claim the Department submitted a sworn affidavit executed by Philip Ledbetter, an assistant attorney general experienced in natural resource litigation. Ledbetter employed the lodestar method, which involves multiplying the reasonable hours worked by a reasonable hourly rate. See Venture v. UTSW DVA Healthcare, LLP, No. 16-0006, 578 S.W.3d 469, 498, 2019 WL 1873428, at *20 (Tex. Apr. 26, 2019). Ledbetter explained in his affidavit that he arrived at a reasonable hourly rate for each of the assistant attorneys general assigned to the case by reviewing the average hourly billing rates published in the Texas Lawyer for lawyers practicing in Travis County in relevant practice areas, reviewing the billing records kept by each attorney general working on the case, and consulting with each of them regarding the specific services they performed. Based on this review, Ledbetter individually determined each attorney’s reasonable hourly rate and the reasonable hours worked on the case and arrived at a reasonable fee. The Department claimed a total of $1,219,975 in fees but suggested an alternate sum of $425,862.50. The alternate sum represented fees the Department incurred responding to Bailey and Peterson’s discovery requests and $62,895 for legal services incurred after Bailey’s nonsuit. The district court accepted the alternative suggestion and made Bailey and Peterson jointly and severally liable for $362,967.50 and Peterson individually liable for $62,895.
Peterson and Bailey argue generally that the Department’s records are insufficient for the district court to determine *398 whether the assistant attorneys general assigned to the case duplicated each other’s work. See State Farm Lloyds v. Hanson, 500 S.W.3d 84, 99 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (upholding fee award based on time records divided into similar categories).
The Department’s request for fees incurred responding to Bailey and Peterson’s discovery requests included the fees of contract attorneys the Department hired to review “over 2.75 million documents.” Peterson and Bailey contend Ledbetter had insufficient information to determine the contract attorneys’ fees were reasonable. Ledbetter submitted with his affidavit time sheets reflecting the name of the contract attorney, the number of hours worked, the date of the work, and that the project was titled “Parks and Wildlife Review.” Each time sheet was sent with an invoice (also attached to Ledbetter’s affidavit) to Mary Smith, one of the assistant attorneys general assigned to this case, and that billed each contract attorney’s time at $30 per hour. We conclude this is sufficient evidence for the district court to make a meaningful evaluation of the reasonableness of the contract attorneys’ fees. See Venture, 578 S.W.3d at 497–98, 2019 WL 1873428, at *20.
Equitable and Just
A fee award under the UDJA also must be equitable and just. See Ridge Oil Co., v. Guinn Invs., Inc., 148 S.W.3d 143, 162 (Tex. 2004).
Peterson and Bailey argue the award was not equitable or just because the assistant attorneys general representing the Department supposedly failed to keep sufficiently detailed time records to segregate their fees, the Department’s original fee request was excessive, and bringing this lawsuit likely forced the Department to withdraw the emergency rules and replace them with the more reasonable (but still objectionable) permanent CWD Rules. They further argue ordering private citizens to reimburse the Department is unjust given that the Department has substantially more resources available to it. The Department responds awarding some measures of fees was equitable and just in light of Peterson and Bailey’s numerous *399 claims, some of which were novel, the millions of documents reviewed in response to their discovery requests, and the consequences to the deer breeding industry if Peterson and Bailey were successful.
Contrary to the assertions made by Peterson and Bailey, the assistant attorneys general working on the case kept sufficiently detailed records to enable Ledbetter to determine individually what portion of the hours each worked on the case was recoverable and to calculate their fees accordingly. Moreover, it is undisputed that Peterson and Bailey raised novel claims and that their discovery requests required the Department to review an unusually large number of documents. Finally, the reasonableness of the Department’s original fee request is not before us because the district court awarded less than half of that sum. Even if the district court could have concluded awarding no fees would be equitable and just under these circumstances, it was not compelled to reach that conclusion here. See Save Our Springs All., Inc. v. Lazy Nine Mun. Util. Dist. ex rel. Board of Directors, 198 S.W.3d 300, 318–19 (Tex. App.—Texarkana 2006, pet. denied))). We conclude the district court did not abuse its discretion by making an inequitable or unjust award.
Peterson’s Fee Motion
As a final matter, Peterson argues the district court abused its discretion by denying his motion for attorney’s fees. A court has discretion to award fees to the non-prevailing party. Ochoa v. Craig, 262 S.W.3d 29, 33 (Tex. App.—Dallas 2008, pet. denied) (holding no abuse of discretion in denying Ochoa’s fee request because she “did not prevail on her declaratory judgment claim”).
We overrule Bailey and Peterson’s remaining issues.
We affirm the district court’s order.
Concurring and Dissenting Opinion by Justice Goodwin
CONCURRING AND DISSENTING OPINION
Melissa Goodwin, Justice
On this record, I agree with the Court’s conclusion that the trial court properly dismissed for lack of jurisdiction Peterson’s declaratory judgment and ultra vires claims. I disagree, however, with the Court’s conclusion that the trial court correctly granted summary judgment on Peterson’s due process claims concerning the Texas Parks and Wildlife Code (the Code) and the Department’s rules, see State v. Bartee, 894 S.W.2d 34, 41–42 (Tex. App.—San Antonio 1994, no pet.) (describing legal tradition and collecting case authorities). Because the Code does not take away this common law property right, I respectfully dissent.1
The Texas Supreme Court has long noted that the preservation of property rights is “one of the most important purposes”—in fact, “[t]he great and chief end”—of government. Tex. Const. art. I, § 19 (“No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.”). But the decision issued today fails to preserve and protect the fundamental property rights of the deer breeders in their captive-bred white-tailed deer.
I recognize that chronic wasting disease (CWD) poses a significant threat to the deer population and for the people of this state. As shown by both the Department’s brief and the amicus brief of various wildlife and hunting associations,2 CWD has potential negative impacts for Texas wildlife, for the rich Texas tradition of hunting deer, and for the properties, businesses, and Texas fisc that derive value and revenue from licensing, leasing hunting rights, and supporting the hunting industry. However, measures to address that threat, while worthy, must be consistent with the rule of law. The legislature, as a representative body of the people, has the power to pass laws further restricting the captivity of breeder deer, implementing stricter regulations for deer breeder permits, and creating additional protections against CWD, insofar as they are consistent with our Constitution. And the Department may act within its delegated scope of authority as granted by the legislature. But I cannot agree that the threat of CWD justifies the deprivation of fundamental private property rights without due process contrary to our Constitution and the rule of law.
Because Peterson has a constitutionally protected property interest in his breeder deer, I continue where the Court left off and proceed to the merits of the district court’s summary judgment order on Peterson’s procedural due process claims. Both parties moved for summary judgment, but neither party met its burden to establish that it was entitled to summary judgment as a matter of law. I would therefore affirm the trial court’s denial of Peterson’s motion for summary judgment, but reverse the grant of the Department’s summary judgment motion. Finally, the Court also affirmed the district court’s $425,862.50 attorney’s *401 fee award against Peterson and the deer breeder Ken Bailey, who originally brought suit with Peterson but later nonsuited his claims. But because the attorney’s fee award was based on, at least in part, the Department’s summary judgment success, I would reverse and remand the attorney’s fee award.
I. STANDARD OF REVIEW AND LAW ON DUE PROCESS
We review a trial court’s summary judgment de novo. Provident Life, 128 S.W.3d at 216.
Here, the summary judgment order granted the Department’s motion and denied Peterson’s motion, which centered upon Peterson’s procedural due process claims against the Department. Due process rights are provided by both the United States Constitution and the Texas Constitution. See Klumb v. Houston Mun. Emps. Pension Sys., 458 S.W.3d 1, 15 (Tex. 2015)).
In a due process claim, we apply a two-part analysis: (1) we determine whether Peterson has a property interest that is entitled to procedural due process protection; and (2) if so, we determine what process is due. See id.
A. Does Peterson have a property interest in his breeder deer?
“Property interests ‘are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law....’ ” Roth, 408 U.S. at 577, 92 S.Ct. 2701).
In Texas, “[a]ll wild animals, fur-bearing animals, wild birds, and wild fowl inside the borders of this state are the property of the people of this state.”3 Hollywood Park Humane Soc’y v. Town of Hollywood Park, 261 S.W.3d 135, 140 (Tex. App.—San Antonio 2008, no pet.).
Under Texas common law, however, “property rights in wild animals can arise when an animal is legally removed from its ‘natural liberty’ and subjected to ‘man’s dominion.’ ”4 Hollywood Park Humane Soc’y v. Town of Hollywood Park, No. Civ.A.SA03CA1312-XR, 2004 WL 390807, at *5 (W.D. Tex. Jan. 23, 2004) (“However, it is legally possible for an individual to have qualified property rights in a wild animal.... These property rights are often referred to as qualified, however, because they are lost if the animal regains its liberty.” (applying Texas common law)).
The Court nevertheless determines that the Code does not “allow[ ] common law property rights to arise in breeder deer.” Ante at 393. For this proposition, the Court relies primarily on two statutory provisions. First, the legislature has mandated that “[n]o person may capture, transport, or transplant any game animal or game bird from the wild in this state unless that person has obtained a permit to trap, transport, and transplant from the department.” Tex. Parks & Wild. Code § 1.101(4)). As explained below, however, the statutory provisions the Court relies on do not prevent a deer breeder who holds a permit from acquiring ownership of breeder deer through legal captivity under the common law, and the Department is incorrect that the common law rule of ownership is now “obsolete” because “the Code defines ‘wild’ in terms of a species’[s] characteristics, not an individual animal’s freedom.”
1. The Court’s analysis
As already noted, the common law rule is that an individual acquires ownership and property rights in a wild animal when it is “removed from its ‘natural liberty’ ”—i.e., through legal capture or some other legal means—“and subjected to ‘man’s dominion.’ ” Tex. Parks & Wild. Code § 43.364.
The Court, however, argues that the Code “is clear that deer breeders have no vested property interest in their breeder deer” and does not allow “common law property rights to arise in breeder deer.” Ante at 393. I disagree because the Code does not “clearly” express legislative intent to abrogate the common law principle providing property rights to deer breeders who legally remove breeder deer from their natural liberty and subject them to man’s dominion, as I explain more fully below. See *404 Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex. 1969))).
Moreover, the Court’s analysis does not take into account the temporal nature of legislative enactments when it “constru[es] all the[ ] provisions together against the backdrop of [s]ection 1.011 and the common law” to conclude that “breeder deer are public property” and “deer breeders do not acquire common law property rights in them.” See ante at 393 (citing id. § 1.013, or if it was only with the culminating 1997 enactment regarding fences that the common law was abrogated construed in light of the earlier statutory prohibitions on possession.6 See ante at 392. If the former, then the 1997 enactment as to the fences would play no part in the analysis of whether the legislature abrogated the common law with the earlier enacted statutes. If the latter, then it is the 1997 enactment that must clearly demonstrate the legislature’s intent to abrogate *405 the common law. But, as I explain below, no statutory provision in the Code reflects the legislature’s intent to abrogate the common law as to the private ownership of breeder deer and thus at no specific time did the legislature effectuate such an intent through a legislative enactment.
The Code expressly provides that “the holder of a valid deer breeder’s permit” may (1) “engage in the business of breeding deer in the immediate locality for which the permit was issued;” and (2) “sell, transfer to another person, or hold in captivity live breeder deer for the purpose of propagation or sale.” Bartee, 894 S.W.2d at 47–48 (Rickhoff, J., concurring) (noting that “the state has not defined wild animals so as to absolutely exclude from ownership all white-tailed deer within the boundaries of the state” and that analogously “[j]ust because the state heavily regulates personalty such as handguns or automobiles, it does not follow that individuals may not own them”).7
Moreover, although section 1.013 addresses whether fences affect the property status of wild animals, the provision does not speak to whether “captivity” affects the property status:
This code does not prohibit or restrict the owner or occupant of land from constructing or maintaining a fence of any height on the land owned or occupied, and an owner or occupant who constructs such a fence is not liable for the restriction of the movement of wild animals by the fence. The existence of a fence does not affect the status of wild animals as property of the people of this state.
*406 Allen v. Pennsylvania Soc’y for Prevention of Cruelty to Animals, 488 F. Supp. 2d 450, 466 (M.D. Pa. 2007) (recognizing that when animal “property was contraband” there could be “no legitimate property interest in the animals”).
Thus, for example, section 1.103 would prevent a person lacking a permit from acquiring ownership in deer contained within high fences because the existence of a fence would not change the property status of the deer and any captivity or possession of the deer would be illegal. See Hollywood Park, 261 S.W.3d at 140.
Accordingly, section 1.013—or, for that matter, the Code—is not inconsistent with acquiring property interests in captive-bred white-tailed deer under the common law. The provisions relied on by the Court do not represent “clear legislative intent” to deprive deer breeders of their rights under common law to acquire property rights in their breeder deer. See Tex. Parks & Wild. Code §§ 43.351(3), .360. Because it is undisputed that Peterson legally held the breeder deer under permit and in captivity, I conclude that Peterson acquired a constitutionally protected property interest in the breeder deer and therefore respectfully dissent from the Court’s contrary conclusion.8
2. The Department’s analysis
The Department, on the other hand, relies on the legislature’s 1991 enactment that statutorily defines “wild” to mean “a species, including each individual of a species, that normally lives in a state of nature and is not ordinarily domesticated.” Id. § 1.101(4). The Department claims that deer breeders holding permits are bailees, and the people of the state, acting through the Department, are the bailors. Deer breeders, as bailees, “have only a possessory right that they may assert against third parties who steal from them,” “[t]hey do not have ownership or any rights superior to the State.” The Department does not dispute that Texas common law and the statutory framework permitted private ownership through legal captivity and dominion of wild animals before 1991 because “the Legislature had not yet ... defined ‘wild’ in terms of species.” But the Department argues that with the 1991 statutory enactment of the definition of “wild” the state acquired absolute ownership of all wildlife, thereby making the common law rule “obsolete.”
I agree with the Department that the common law provided for private ownership through legal captivity and dominion before 1991. But I disagree that the common *408 law rule became “obsolete” in 1991. If private ownership is per se prohibited because “wild” is defined in terms of “species” and wild animals are therefore owned by the state regardless of confinement, then the later 1997 statutory enactment declaring that fences do not affect wild animals’ status as property of the people of this state would be redundant and mere surplusage. See Mid-Century Ins. Co. of Tex. v. Kidd, 997 S.W.2d 265, 273 (Tex. 1999) (recognizing “the doctrine of expressio unius est exclusio alterius, the maxim that the expression of one implies the exclusion of others”).
Moreover, statutory provisions in the Texas Health and Safety Code expressly contemplate the ownership of wild animals by entities other than the state, which is contrary to the Department’s theory that the state has absolute ownership in wild animals.9 For example, section 822.103, enacted in 2001, contemplates that a person may “own ... a dangerous wild animal” if “the person holds a certificate of registration for that animal issued by an animal registration agency.”10 Tex. Health & Safety Code § 822.102(a)(6), (8), (10), (11) (exempting these entities from subchapter E’s requirements); see also id. §§ 822.107–13 (imposing requirements, restrictions, *409 and liabilities on “[a]n owner of a dangerous wild animal”).11
At issue here, then, is what it means for wild animals—as defined in terms of species’s characteristics—to be “the property of the people of this state,” see Bartee states:
With regard to the ownership of wild animals, we do not find that the various statutes enacted over the years have departed from the common law. The statutory phrase ‘property of the people of this state’ does not appear to have been interpreted by our courts. Despite its use in various statutes over the years, our courts have consistently referred to the ownership of wild animals as being in ‘the state’ or belonging to ‘the state.’
Dobie—qualifies its interpretation of public ownership as follows:
The ownership of wild game, so far as it is capable of ownership, is in the state for the benefit of all its people in common, and it is within the police power of the state Legislature, subject to constitutional restrictions, to make such general or special laws as may be reasonably necessary for the protection of public rights in such game, and within such power is the right to regulate the method of taking or hunting game in the state.
Dobie effectively questions whether wild game is even “capable of ownership” and therefore does not stand for the proposition that wild game is owned by the state as the term “owned” is traditionally conceived.
Moreover, 3B C.J.S. Animals § 9 (2019) (“The State’s ownership of wild animals is in its sovereign, as distinguished from its proprietary, capacity, and it may regulate the taking and reduction to possession of wild animals.”). Thus, we must inquire into what it means for a sovereign in its sovereign capacity to “own” wild animals, insofar as wild animals are capable of ownership, and whether this precludes private ownership.
“All statutes are presumed to be enacted by the legislature with full knowledge of the existing condition of the law and with reference to it.” Paxton v. City of Dallas, 509 S.W.3d 247, 258 (Tex. 2017).
Here, the development of the U.S. Supreme Court’s understanding of the theory of public ownership of wild animals from Toomer v. Witsell, 334 U.S. 385, 402, 68 S.Ct. 1156, 92 L.Ed. 1460 (1948) (“The whole ownership theory, in fact, is now generally regarded as but a fiction expressive in legal shorthand of the importance to its people that a State have power to preserve and regulate the exploitation of an important resource.”).
The theory of public ownership of wildlife was questioned because there is no basis for state ownership as understood in the traditional proprietary sense. See, e.g., Dobie, 48 S.W.2d at 290.
In short, “[a] state does not stand in the same position as the owner of a private game preserve and it is pure fantasy to talk of ‘owning’ wild fish, birds, or animals. Neither the States nor the Federal Government, any more than a hopeful fisherman or hunter, has title to these creatures until they are reduced to possession by skillful capture.” Douglas v. Seacoast Products, Inc., [431 U.S. at 284, 97 S.Ct. 1740].”).
Following the understanding of “public ownership” enunciated in these cases, the statutory provisions declaring that wild animals are the “property of the people of this state” and defining “wild” to be a species’s characteristic should not be understood as a traditional conception of ownership—i.e., proprietorship—over all animals within the species regardless of possession, but rather as a fiction expressive in legal shorthand of the importance to its people that the state has the power to preserve and regulate the exploitation of an important resource. See 530 Pa. 534, 610 A.2d 42 (1992) (per curiam).13
Thus, I conclude that deer breeders with a permit have a property interest in their breeder deer under common law principles after legally taking the deer from their natural liberty and keeping them in captivity pursuant to state law, while the state maintains sovereign “ownership”—as a legal *413 fiction and distinguished from proprietary ownership.14 See Toomer, 334 U.S. at 402, 68 S.Ct. 1156)).15 In sum, sovereign “ownership” describes the state’s authority to regulate wildlife for the benefit of the people in a manner consistent with our Constitution and the laws of our state, but sovereign ownership of wildlife is not proprietary ownership and therefore does not necessarily preclude an individual from acquiring ownership through legal possession and captivity of wild animals.16
*414 B. What process is due?
Having established that Peterson has a constitutionally protected property interest, I now turn to what process is due and whether the trial court properly granted the Department’s motion for summary judgment and denied Peterson’s motion for summary judgment as to Peterson’s due process claims. As an initial matter, I note that “[t]he constitutional sufficiency of procedures provided in any situation, of course, varies with the circumstances.” Mathews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)).
Peterson’s motion for summary judgment, however, did not cite, analyze, or provide evidence of these factors establishing the amount of process due, given his circumstances. Nor did Peterson address these factors on appeal. Because he did not establish the amount of process due, Peterson failed to meet his burden of establishing as a matter of law that he is entitled to summary judgment on his procedural due process claims. See City of Richardson, 539 S.W.3d at 259. The district court did not err in denying Peterson’s motion for summary judgment.
In addition to arguing that Peterson has no constitutionally protected property interest, the Department in its motion for summary judgment argued that “even if [Peterson] had a protected interest and even if he had been denied a transfer permit, the deer-breeder industry’s interest in prompt permits would outweigh the incidental benefit of the burdensome procedures Peterson demands: a contested-case hearing for transfer permits.”17 Assuming *415 without deciding that the Department had sufficiently established that the City of Richardson, 539 S.W.3d at 259.
C. Attorney’s fees
As to the question of attorney’s fees, I agree with the Court that the district court had jurisdiction to award attorney’s fees under the Uniform Declaratory Judgment Act (UDJA), including against Bailey. But “[w]here the extent to which a party prevailed has changed on appeal, our practice has been to remand the issue of attorney fees to the trial court for reconsideration of what is equitable and just.” Bank of N.Y. Mellon v. Soniavou Books, LLC, 403 S.W.3d 900, 907 (Tex. App.—Houston [14th Dist.] 2013, no pet.).
For these reasons, I concur with the Court’s holding affirming the dismissal of Peterson’s declaratory judgment and ultra vires claims, but respectfully dissent from affirming the district court’s order granting the Department’s summary judgment motion, awarding attorney’s fees to the Department, and denying Peterson’s motion for attorney’s fees. I would instead reverse and remand as to those issues.
|1||A facility is defined in the Department’s regulations as “[o]ne or more enclosures, in the aggregate and including additions, that are the site of deer breeding operations under a single deer breeder’s permit.” 31 Tex. Admin. Code § 65.601(4) (2018) (Tex. Parks & Wild. Dep’t, Definitions).|
|2||We cite to the current version of regulations for convenience absent a material and substantial change.|
|3||Peterson challenged the rules on several other grounds but has chosen to proceed only on his procedural due process claim in this Court.|
|4||Sovereign immunity “also extend[s] to immunity from liability, but only immunity from suit implicates jurisdiction.” City of Austin v. Utility Assocs., 517 S.W.3d 300, 308 n. 18 (Tex. App.—Austin 2017, pet. denied).|
|5||Peterson also cites to 893 S.W.2d at 441. Neither case involved the kind of freestanding declaration of rights Peterson seeks here.|
|6||Peterson also sued Smith, Lockwood, and Wolf in their personal capacities. He later nonsuited his personal-capacity claims against Smith and does not mention his personal-capacity claims against Lockwood and Wolf in his brief to this Court. A brief must contain “a clear and concise argument for the contentions made,” supported by “appropriate citations to authorities and to the record.” RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 126 (Tex. 2018). We conclude Peterson waived his personal-capacity claims against Lockwood and Wolf.|
|7||Peterson initially contends we should not review the district court’s ruling because it is an improper advisory opinion. “The distinctive feature of an advisory opinion is that it decides an abstract question of law without binding the parties.” Tex. R. App. P. 47.1 (directing appellate courts to hand down an opinion “as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal”).|
|8||The people of Texas subsequently amended the Constitution to state: “The conservation and development of all of the natural resources of this State ... are each and all hereby declared public rights and duties.” Tex. R. App. P. 47.1.|
|9||The Commerce Clause grants Congress authority to regulate interstate commerce but “also limits the power of states to interfere with interstate commerce.” ––– U.S. ––––, 138 S.Ct. 557, 199 L.Ed.2d 437 (2017).|
|10||The Parks and Wildlife Code now provides that “ ‘[w]ild,’ when used in reference to an animal, means a species, including each individual of a species, that normally lives in a state of nature and is not ordinarily domesticated.” Tex. R. App. P. 47.1.|
|11||Peterson asks us to apply Wiley was decided that we do not find it persuasive here.|
|12||Subchapter L does not address disposition of breeder deer after the permit term expires. However, Department regulations require the deer breeder to sell, transfer, or donate the breeder deer to a person who holds a permit allowing possession of them or to obtain authorization to release the breeder deer into the wild. See 31 Tex. Admin. Code § 65.612(b) (2019) (Tex. Parks & Wild. Dep’t, Disposition of Deer).|
|13||Even though several recent court decisions articulate the government’s authority over wild animals in terms of ownership, e.g., State v. Bartee, 894 S.W.2d 34, 47 (Tex. App.—San Antonio 1994, no pet.) (Rickhoff, J., concurring).|
|14||This Court has received an amicus brief from the Texas Wildlife Association, the Boone and Crockett Club, Texas Chapter of the Wildlife Society, the Association of Fish and Wildlife Agencies, the National Wildlife Federation, the National Wild Turkey Federation, Texas Chapter of the Coastal Conservation Association, the Backcountry Hunters & Anglers, and the Texas and Southwestern Cattle Raisers Association in support of the Department’s position.|
|15||Peterson cites to Calvert is not applicable here because there is no suggestion that the Department has revoked or intends to revoke Peterson’s breeder’s permit.|
|16||We stress that we express no opinion on whether Peterson has a vested right under the terms of his permit.|
|1||Although the Code regulates the possession of wild animals removed from their natural liberty and restricts the means by which ownership may be acquired by specifying the conditions of what may constitute legal captivity, I do not see this as contrary to ownership under the common law.|
|2||These include: Texas Wildlife Association, Boone and Crockett Club, Texas Chapter of the Wildlife Society, Association of Fish and Wildlife Agencies, The National Wildlife Federation, National Wild Turkey Federation, Texas Chapter of the Coastal Conservation Association, Backcountry Hunters & Anglers, and Texas and Southwestern Cattle Raisers Association.|
|3||The Texas legislature enacted the original predecessor to this statute in 1907, providing that “All the wild deer ... and all other wild animals, wild birds and wild fowls found within the borders of this State, shall be and the same are hereby declared to be the property of the public.” Act of April 19, 1907, 30th Leg., R.S., ch. 144, § 1, 1907 Tex. Gen. Laws 278, 278 (current version at Tex. Parks & Wild. Code § 1.011(a)).|
|4||As the Court notes, “Texas adopted the common law of England as its rule of decision,” which holds that “[p]rivate individuals could ‘reduce a part of this common property [in wild animals] to possession, and thus acquire a qualified ownership in it,’ but that right was subject to government regulation.” Ante at 390 (quoting Hughes v. Oklahoma, 441 U.S. 322, 99 S.Ct. 1727, 60 L.Ed.2d 250 (1979)).|
|5||The Court does not address the Department’s argument that relies on the statutory definition of “wild,” instead stating that the Court’s “narrower analysis [ ] is sufficient to dispose of Peterson’s appeal.” Ante at 392 n.10.|
|6||For similar reasons, I also find the Court’s discussion of the public trust doctrine and the 1907 statutory enactment of section 1.011, or another later enacted statute, clearly expressed the legislature’s intent to abrogate the common law principle that ownership rights in wild animals could be acquired by dominion through legal captivity. As explained more fully below, the answer to that question, in my opinion, is no.|
|7||In an analogous situation from oil and gas law—where the rule of capture was adopted from the doctrine of animals ferae naturae—the Texas Supreme Court recognized that “the law of capture” is “recognized as a property right” that is “subject to regulation under the police power of this state” and “the right to be protected against confiscation under the Commission’s oil and gas rules is not unconditional or unlimited.” Lone Star Gas Co. v. Murchison, 353 S.W.2d 870, 879 (Tex. App.—Dallas 1962, writ ref’d n.r.e.))).|
|8||The Court also asserts, “The Legislature has specifically provided that a breeder’s permit is valid for only a set amount of time” and “nothing in the statute contemplates that the breeder retains any rights over breeder deer after the permit expires or is revoked by the Department.” Ante at 393. From this, the Court claims that “allowing private property rights to arise in breeder deer is incompatible with the Legislature’s direction that breeder deer are ‘held under a permit’ ” because “if breeder deer become private property, the owner’s rights would not depend on the status of the permit because private property rights are ‘not derived from the legislature.’ ” Ante at 393 (first quoting (3), .360; see also 2 William Blackstone, Commentaries on the Laws of England, 393 (St. George Tucker ed., 2d ed. 1803) (“In all these creatures, reclaimed from the wildness of their nature, the property is not absolute, but defeasible.... But while they thus continue my qualified or defeasible property, they are as much under the protection of the law, as if they were absolutely and indefeasibly mine.”). To the extent the Court is raising the hypothetical question of whether a deer breeder maintains ownership over the deer if the Department did not renew the breeder’s permit, that question is not before the Court on this record and I therefore would not resolve it here.|
|9||“In the construction of an act, a court should consider all laws in pari materia, that is to say, all laws related to the subject of the act and the general system of legislation of which the act forms a part.” State v. Bartee, 894 S.W.2d 34, 45 (Tex. App.—San Antonio 1994, no pet.) (noting that courts may use statutory construction principle of in pari materia in determining legislative intent where “[s]tatutes that deal with the same general subject ... or relate to the same person or thing or class of persons or things, are considered to be in pari materia although they contain no reference to one another, and although they may have been enacted at different times”).|
|10||The Department regulated the ownership of dangerous wild animals under chapter 12G of the Texas Parks and Wildlife Code until 1997, when the legislature repealed the chapter. See House Comm. on Cty. Affairs, Bill Analysis, Tex. H.B. 1362, 77th Leg., R.S. (2001). In 2001, the legislature passed subchapter E of chapter 822 of the Texas Health and Safety Code, regulating dangerous wild animals. See Act of April 26, 2001, 77th Leg., R.S., ch. 54, § 1, 2001 Tex. Gen. Laws 90, 90 (codified at Tex. Health & Safety Code § 822.102(4) (defining “[d]angerous wild animal”).|
|11||Moreover, the Department’s own rules contemplate private ownership of deer contrary to its theory of absolute state ownership. See 31 Tex. Admin. Code § 65.133(b) (Tex. Parks & Wildlife Dep’t, General Provisions) (“[Buck deer held under a scientific breeder’s permit] remain private property and may be recaptured[.]” (emphasis added)).|
|12||I agree with the Court that Hughes is not binding authority on this issue.|
|13||Moreover, if this Court were to construe Union Pac. R.R. v. Nami, 498 S.W.3d 890, 896–97 (Tex. 2016) (“Broadly speaking, and with various exceptions ... a person who owns, possesses, or harbors a wild animal is strictly liable for its actions.”).|
|14||Because I conclude that Peterson has a constitutionally protected property interest under common law, I do not address whether Peterson has a property interest under the terms of his permit as provided by statute. See, e.g., Tex. Parks & Wild. Code § 43.357(a).|
|15||But see Anderton, 605 F. App’x at 348 (“Nowhere do the statutes or regulations state that breeder deer become the property of a permit holder. Regardless, even if they did give ownership of breeder deer to permit holders, the Andertons were not permit holders when the deer were killed.”).|
The Department makes two additional arguments. First, it argues that “[t]he State’s conservation of natural resources is premised on public ownership,” citing Hendee v. Dewhurst, 228 S.W.3d 354, 373 (Tex. App.—Austin 2007, pet. denied). Thus, even assuming that the Conservation Amendment was premised on public ownership, it is not the province of the judiciary to apply the Conservation Amendment and declare public ownership of natural resources under that Constitutional provision.
Second, the Department argues that the Texas Supreme Court “held that when the State grants use of a public resource through a permit, the State retains ‘rights as the owner of the’ resource.” Wright is inapposite here.
|17||The Department also argued that Peterson lacks standing because he testified in his deposition that the Department never denied his transfer permit and therefore his alleged injury is not “concrete and particularized, actual or imminent, not hypothetical.” See Stop the Ordinances Please v. City of New Braunfels, 306 S.W.3d 919, 928 (Tex. App.—Austin 2010, no pet.) (collecting cases; holding that alleging ordinance restricted use of property, caused additional expenses, and damaged or destroyed market satisfied standing requirement; and noting plaintiff is not required to allege “deprivation of a ‘vested right’ constituting a due-process violation to demonstrate the requisite infringement of a ‘legally protected interest’ ”).|
The Department argued in its motion that a “ ‘statewide transport ban’ applied to all deer breeders would not violate due process” because “Peterson was afforded the process he was due during the enactment of the legislation and adoption of the rules following notice-and-comment procedures,” citing id. at 818.
However Id. at 819.
Here, in contrast, the property interest is not an entitlement benefit created by statute, but one arising out of longstanding common law principles, although regulated by statute. Nor does the Department have “unfettered discretion” in restricting that interest. Although the Department is authorized to establish “procedures and requirements for the purchase, transfer, sale, or shipment of breeder deer,” Lee and asserting that due process was satisfied through “the enactment of the legislation and adoption of the rules following notice-and-comment procedures,” the Department did not meet its burden to establish that it was entitled to summary judgment on Peterson’s due process claims.
|19||On appeal, the Department also challenges jurisdiction over Peterson’s due process claims under the UDJA as redundant with Peterson’s APA claims. See Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69, 80 (Tex. 2015).|