5th COA – Dallas Archives

Court of Appeals of Texas, Dallas.

KENNETH HENRY, Appellant

MARC A. NOTZON AND LAW OFFICE OF MARC A. NOTZON, P.C., Appellees

No. 05-20-00994-CV

Opinion Filed July 25, 2023

On Appeal from the 191st Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-19-13449

Before Justices Molberg, Pedersen, III, and Kennedy¹

Opinion by Justice Molberg

Pedersen, III, J., dissenting.

MEMORANDUM OPINION ON REHEARING

KEN MOLBERG JUSTICE

*1 Reverse and Remand and Opinion Filed July 25, 2023

In this summary judgment appeal, we grant appellant Kenneth Henry’s motion for rehearing, withdraw our prior opinion, and vacate our December 22, 2022 judgment. This is now the opinion of the Court. We reverse and remand for further proceedings consistent with this opinion because, based on the pleadings and record before us, the trial court misapplied the collateral estoppel doctrine, and, in doing so, erroneously deprived Henry of a possible remedy for a claimed serious breach of a lawyer’s duty of loyalty to his client.

I. BACKGROUND

Henry sued appellees Marc A. Notzon and the Law Office of Marc A. Notzon, P.C.² and alleges both breached their fiduciary duty to him in their representation of him in a prior lawsuit in which he was a defendant.

The prior lawsuit arose from a motor vehicle accident on May 29, 2015, when Henry, an insulin-dependent diabetic, experienced a low blood sugar event. At the time of the accident, Henry was driving a company truck and was in the course and scope of his employment with Time Warner Cable (TWC). According to Henry, on the date of—but before—the accident, he rode with a co-worker and an on-call supervisor for several hours due to disorientation caused by his low blood sugar. Henry alleges, “[d]espite caution to the contrary,” he “was put back in a TWC company vehicle and was involved in an unfortunate accident.”

A third party sued Henry and TWC after that accident. Notzon jointly represented Henry and TWC in that lawsuit and negotiated a settlement on behalf of them both. The dates of the settlement and Notzon’s representation of Henry and TWC are not clear from the appellate record, but in terms of when their representation began, Henry alleges he and his supervisors met with Notzon at TWC’s Dallas location “shortly after the collision” and also alleges he “met with the TWC supervisors, [human resources and] Notzon on at least two occasions in the month of June 2015 to discuss the accident.”

According to Henry, TWC policy mandates that after an accident, an Accident Review Committee (ARC) will conduct its investigation and provide results within seven days after the accident. Henry alleges the ARC process occurred in June 2015.

Henry also alleges he was released to return to work without restrictions by the workers’ compensation doctors on September 7, 2015, and “around September 10, 2015, TWC began high level conferences regarding Henry’s employment.” Henry alleges “Notzon participated in those conferences” but “did not inform Henry of those conferences, even though Notzon participated in the discussions.”

Henry was terminated on October 2, 2015, more than four months after the accident, and less than a month after the “high level conferences” Notzon is alleged to have participated in began.

Henry sued TWC³ in federal court for disability discrimination and workers’ compensation retaliation, alleging, in part, that TWC terminated him (1) because of his disability in violation of the Americans with Disabilities Act, as amended (ADAAA), see 42 U.S.C. §§ 12101–213, and (2) because he filed a workers’ compensation claim in good faith, hired a lawyer to represent him in a workers’ compensation claim, instituted or caused to be instituted a workers’ compensation claim in good faith, and/or testified or was prepared to testify in a workers’ compensation proceeding, in violation of Chapter 451 of the Texas Labor Code. See TEX. LABOR CODE §§ 451.001–.003. TWC moved for summary judgment on Henry’s ADAAA and workers’ compensation retaliation claims. The federal district court granted the motion, and the federal court of appeals affirmed.⁴

*2 In this lawsuit, Henry alleges Notzon breached the fiduciary duty owed to Henry by deceiving him and by failing to disclose a conflict of interest and “secret” discussions with TWC in the course of jointly representing Henry and TWC in the lawsuit filed against them after the accident. He alleges “Notzon’s design was to conceal TWC’s gross negligence when TWC permitted Henry to get behind the wheel of the company truck on May 29, 2015,” and “to lay all of the blame for the collision on Henry even though TWC had been told by [one of Henry’s co-workers] that Henry should not be permitted to drive” on that date.

Henry also alleges Notzon’s breach caused him damages and that, unbeknownst to Henry, “Notzon was ... working against Henry to garner favor with TWC and the money TWC and/or its insurers was paying to Notzon[,]” gains which Henry describes as “ill-gotten” and that should be forfeited. In terms of relief, Henry seeks, among other things, “[f]ee forfeiture and actual damages[,]” “[l]ost earnings and employee benefits in the past[,]” “[l]ost earnings and employee benefits that in reasonable probability will be lost in the future,” and “[c]ompensatory damages, past and future[.]” The latter three types of damages are similar in nature to certain types of relief Henry sought from TWC in his federal lawsuit against TWC.⁵

Notzon’s pleading includes a general denial and asserts various affirmative defenses, including collateral estoppel, and Notzon filed a traditional summary judgment motion based on that affirmative defense.⁶ The trial court granted Notzon’s motion based solely on that defense and made certain evidentiary rulings. Henry then filed a combined motion for new trial and motion for reconsideration. The trial court did not rule on that combined motion, and it was overruled by operation of law.

Henry timely appealed. In our Court, the parties filed a written agreement stating that “if the grant of summary judgment on the basis of collateral estoppel is determined by this Court to have been granted in error, the matter should be remanded to the trial court, unless review by the Texas Supreme Court is granted.” See TEX. R. APP. P. 6.6.

II. ISSUES AND ANALYSIS

*3 Henry raises two issues on appeal and argues the trial court erred in (1) granting summary judgment on the affirmative defense of collateral estoppel and (2) denying his motion to compel certain discovery. Notzon disputes both issues. As we explain, we agree with Henry on the first issue and need not reach the second.

A. Applicable Standards

1. Summary Judgment Standards

We review de novo the trial court’s ruling on a motion for summary judgment. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 131 (Tex. 2019); Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In conducting our review, “we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.” Ortiz, 589 S.W.3d at 131 (quoting Dorsett, 164 S.W.3d at 661).

A traditional motion for summary judgment requires the moving party to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Ortiz, 589 S.W.3d at 131; Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018).⁷ If the movant does so, the burden then shifts to the nonmovant to come forward with competent controverting evidence sufficient to raise a genuine issue of material fact on the challenged element. Lujan, 555 S.W.3d at 84. A genuine issue of material fact exists if the evidence regarding the challenged element “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).

*4 When, as here, a party has moved for traditional summary judgment on an affirmative defense, the movant has the initial burden of establishing entitlement to judgment as a matter of law by conclusively establishing each element of its affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008) (per curiam); see also TEX. R. CIV. P. 166a(b)–(c). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005); see also Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam) (stating, “An appellate court reviewing a summary judgment must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented.”).

If the movant meets its burden, the burden then shifts to the nonmovant to present evidence raising a genuine issue of material fact as to one or more elements of the affirmative defense, precluding summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

2. Collateral Estoppel

“The doctrine of collateral estoppel precludes re-litigation of ultimate issues of fact actually litigated and essential to the judgment in a prior suit.” Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 801 (Tex. 1992); see Tarter v. Metro. Sav. & Loan Ass’n, 744 S.W.2d 926, 927 (Tex. 1988); Farmland Partners Inc. v. First Sabrepoint Cap. Mgmt., Inc., No. 05-22-00010-CV, 2023 WL 4286017, *5 (Tex. App.—Dallas June 30, 2023, no pet. h.) (mem. op.). “Ultimate issues are those factual determinations submitted to a jury that are necessary to form the basis of a judgment.” Tarter, 744 S.W.2d at 928; Farmland Partners, 2023 WL 4286017, at *5. “The term ‘ultimate issue’ does not refer to a cause of action or a claim.” Id.

“Collateral estoppel requires that the issue decided in the first action be identical to the issue in the pending action.” Getty Oil, 845 S.W.2d at 802 (emphasis added); Farmland Partners, 2023 WL 4286017, at *5. “The doctrine applies when the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior suit[,]” Tarter, 744 S.W.2d at 927, and “when relitigation could result in an inconsistent determination of the same ultimate issue; it does not bar litigation merely because the outcomes of two suits may appear to be inconsistent.” Id. at 928–29; Farmland Partners, 2023 WL 4286017, at *5.

The doctrine “is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues.” In re USAA Gen. Indem. Co., 629 S.W.3d 878, 883 (Tex. 2021) (orig. proceeding) (quoting Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994)).

Trapnell states, “Since collateral estoppel is an affirmative defense, [a defendant has] the burden of pointing out the issue [the defendant wishes] to be estopped.” 890 S.W.2d at 802. Trapnell further explains the burden as follows:

A party seeking to assert the bar of collateral estoppel must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action.

Id. at 801 (emphasis added) (but noting strict mutuality of parties is no longer required)⁸; see also Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985) (“Collateral estoppel, or issue preclusion, is more narrow than res judicata in that it only precludes the relitigation of identical issues of facts or law that were actually litigated and essential to the judgment in a prior suit.”) (emphasis added).

*5 “To determine whether the facts were fully and fairly litigated in the first suit, we consider ‘(1) ... whether the parties were fully heard, (2) whether ... the court supported its decision with a reasoned opinion, and (3) whether the decision was subject to appeal or was in fact reviewed on appeal.’ ” BP Auto. LP v. RML Waxahachie Dodge, LLC, 517 S.W.3d 186, 200 (Tex. App.—Texarkana 2017, no pet.) (quoting Mower v. Boyer, 811 S.W.2d 560, 562 (Tex. 1991)). “To determine whether a fact issue is essential to the judgment, i.e. whether it is an ‘ultimate issue,’ we look to the factual determinations made by the trier of fact that are “ ‘necessary to form the basis of a judgment.’ ” Id. (quoting Tarter, 744 S.W.2d at 928); Farmland Partners, 2023 WL 4286017, at *6.

We review collateral estoppel’s application de novo because it is a question of law. Webb v. Diversegy, LLC, No. 05-17-01258-CV, 2019 WL 1146707, at *4 (Tex. App.—Dallas Mar. 13, 2019, pet. denied) (mem. op.); Farmland Partners, 2023 WL 4286017, at *6. As the movant on its collateral estoppel defense, Notzon had the “burden of pointing out the issue [Notzon wished] to be estopped.” See Trapnell, 890 S.W.2d at 802.

B. Analysis

To determine whether the trial court erred in granting summary judgment based on collateral estoppel, as Henry argues in his first issue, we first summarize the nature of Henry’s claim and Notzon’s summary judgment motion, the latter of which included Notzon’s characterization of the issue Notzon wished to be estopped.

1. Henry’s Claim and Notzon’s Summary Judgment Motion

Henry’s only claim against Notzon is for breach of fiduciary duty, a tort claim that generally involves the following elements: “(1) the existence of a fiduciary duty, (2) breach of the duty, (3) causation, and (4) damages.” See Parker, 514 S.W.3d at 220; see also Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet. denied) (describing elements as requiring “(1) a fiduciary relationship between the plaintiff and defendant; (2) the defendant must have breached his fiduciary duty to the plaintiff; and (3) the defendant’s breach must result in injury to the plaintiff or benefit to the defendant”).

Notzon moved for, and obtained, a traditional summary judgment based solely on the affirmative defense of collateral estoppel. To do so, Notzon was required to conclusively establish all elements of that defense. Martinez, 941 S.W.2d at 911.

As grounds for Notzon’s traditional summary judgment motion, Notzon’s motion stated, in pertinent part:

As a matter of law, all of [Henry’s] claims should be dismissed for failing to raise a material fact issue as to necessary elements for his claim.

....

[Henry] cannot establish a material fact issue as to causation. [Henry] just finished asserting claims against his former employer [TWC] for [d]isability [d]iscrimination and Workers’ Compensation Act [v]iolations. The Northern District of Texas determined in the previous litigation (hereafter referred to as the “TWC case”) that [Henry’s] employment was terminated because he caused a severe, avoidable accident that seriously damaged three innocent people. The Northern District found that [Henry’s] diabetic condition was not a consideration in TWC’s decision to terminate [Henry’s] employment. Moreover, the Northern District determined that [Henry] could not show that the accident’s avoidable and severe nature was a pretext for terminating his employment based on his diabetic condition.

....

The [trial court] should grant summary judgment against Plaintiff in this case because ... the reason for [Henry’s] termination has not changed, and thus [Notzon was] not the cause of [Henry’s] damages.

*6 In the body of the motion, Notzon argued the trial court “should grant [his] motion for summary judgment because [Notzon’s] alleged breach did not cause [Henry’s] damages.” Notzon then stated, “[Henry] is collaterally estopped from asserting that the reason for termination was not the severity and avoidable nature of the May 29, 2015 accident[,]” “[t]he issue of causation has already been litigated and the doctrine of collateral estoppel applies[,]” and “[Henry] is thus precluded from re-litigating causation[.]” Notzon then listed the elements of collateral estoppel and argued, (1) “The cause of [Henry’s] termination from TWC was actually litigated in the TWC case[,]” (2) “was essential to the Northern District granting summary judgment for TWC,” and (3) Henry, “the party against whom the doctrine is asserted, was a party to the TWC case.” In his response to Notzon’s motion, Henry disputed the first two arguments but not the third. The trial court granted Notzon’s motion based solely on collateral estoppel but did not otherwise explain the basis for its ruling.

2. Parties’ Positions on Appeal

In his first issue on appeal, Henry argues the trial court erred in granting summary judgment on the affirmative defense of collateral estoppel. Notzon disputes this and argues the trial court properly granted traditional summary judgment “based on the affirmative defense of collateral estoppel, thereby negating the essential element of causation of damages in Henry’s claim for breach of fiduciary duty.”

3. Trial Court Erred in Granting Summary Judgment

As we explain further below, we conclude the trial court erred in granting Notzon’s traditional summary judgment based on collateral estoppel because, based on the record before us, Notzon failed to conclusively prove the facts sought to be litigated in this action were fully and fairly litigated in Henry’s federal lawsuit against TWC and were essential to the federal court’s judgment. See Trapnell, 890 S.W.2d at 801 (collateral estoppel elements); Martinez, 941 S.W.2d at 911 (explaining that in a traditional summary judgment based on an affirmative defense, movant must conclusively establish all elements of the defense).

Concluding that collateral estoppel applies here, as Notzon argues, and as the dissent concludes, fundamentally misinterprets at least three things: (1) the nature of “ultimate issues” for collateral estoppel purposes, (2) the federal district court’s analysis, and (3) the nature of causation itself. We discuss each topic below.

First, as Tarter states, the term “ultimate issue” does not refer to a cause of action or a claim but instead refers to “those factual determinations submitted to a jury that are necessary to form the basis of a judgment.” 744 S.W.2d at 928. Here, the parties did not litigate, and the federal court did not consider or conclude, the same ultimate issues Henry seeks to establish in this case—whether Notzon breached a fiduciary duty to Henry that injured Henry or benefited Notzon,⁹ and if so, the remedies available to him as a result of the breach.¹⁰ Instead, as exhibits A and M reflect,¹¹ the federal court decided that: (1) Henry’s proof consisted of circumstantial, not direct, evidence and did not create a reasonable inference that his disability was a factor in TWC’s decision to terminate him, and (2) Henry did not create a reasonable inference he would not have been terminated but for his decision to file for workers’ compensation. Thus, the two “ultimate issues” regarding Henry’s termination that the federal district court decided, and the Fifth Circuit affirmed, were that, as a matter of law, (1) Henry did not prove TWC fired Henry because of his diabetes,¹² and (2) TWC did not discharge Henry because he filed a workers’ compensation claim in good faith, hired a lawyer to represent him in a workers’ compensation claim, instituted or caused to be instituted a workers’ compensation claim in good faith, or testified or was about to testify in a workers’ compensation proceeding.¹³ To conclude the same ultimate issues in Henry’s prior employment lawsuit and in this case are the same, one must pretend that in each case, the jury would be asked, “Why did TWC terminate Henry?” followed by a blank space for the jury to fill in. As the cited PJCs reflect, that is not how it works.

*7 Second, concluding that collateral estoppel applies here fundamentally misinterprets the federal court’s analysis. In analyzing Henry’s ADAAA claim against TWC, the federal court employed the well-known McDonnell Douglas Corporation v. Green¹⁴ framework, a heuristic¹⁵ that assists courts in analyzing efforts to summarily dismiss certain discrimination cases that are based on circumstantial proof. As a part of that framework, if the employee has previously demonstrated a prima facie case of discrimination or retaliation, the employer must proffer a legitimate, non-discriminatory reason to justify adverse action against an employee. In doing so, the employer, like TWC, does not carry a burden of proof. It must only make its evidentiary proffer to dispel the presumption created by an employee’s prima facie showing. See, e.g., Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 142–43 (2000) (stating that Reeves’s establishment of prima facie case of discrimination shifted to his employer burden to “produc[e] evidence that the plaintiff was rejected, or someone else was preferred, for a legitimate, nondiscriminatory reason[,]” but that “[t]his burden is one of production, not persuasion [and] can involve no credibility assessment” and that “[t]he ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff”) (internal quotations omitted); see also Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 256–58 (1981) (“[T]he defendant does not bear a formal burden of persuasion.”). Furthermore, the McDonnell Douglas framework applies only at the summary judgment or directed verdict stage, not at trial,¹⁶ which makes Notzon’s arguments even more tenuous as to both of the first two collateral estoppel elements. Put another way, the McDonnell Douglas framework is merely a three-tiered method of assessing circumstantial evidence of discrimination to determine whether a fact issue exists for purposes of summary judgment or directed verdict.

Nevertheless, Notzon treats TWC’s intermediate burden of production as if it were a burden of persuasion and resulted in a necessary finding that Henry’s wreck was not only a cause, but the sole and only cause, of his termination when, in fact, such a determination was not made and was not essential to the ultimate issues of disability discrimination or workers’ compensation retaliation—claims that do not require that discriminatory or retaliatory animus be the sole cause for a termination or other adverse event.¹⁷

*8 Third, Notzon’s position, and the trial court’s and the dissent’s apparent agreement with it, also misinterprets the nature of causation itself. Even if we were to agree the federal court decided, as a matter of ultimate fact, that TWC terminated Henry because of his wreck, such a finding would not be inconsistent with the ultimate fact to be decided here regarding the actual damages to Henry resulting from Notzon’s alleged breach, as it is well-established that there can be more than one proximate cause for an event,¹⁸ and a finding of one cause does not necessarily preclude others.¹⁹ Thus, even if, as Notzon argues, the cause of Henry’s termination from TWC was already decided, the trier of fact in this case could still find the termination resulted from other causes, such as Notzon’s alleged breach.²⁰

Contrary to Notzon’s argument and the trial court’s and the dissent’s apparent agreement with it, the federal district court did not decide, as an ultimate issue, any cause of Henry’s termination at all. Instead, it simply established that Henry did not satisfy his summary judgment burden of proof under McDonnell Douglas. Cf. Grenwelge v. Shamrock Reconstructors, Inc., 705 S.W.2d 693, 694 (Tex. 1986) (holding jury’s failure to find breach of contract meant the plaintiffs failed to carry their burden of proof, not that the defendant substantially performed the contract). Thus, based on the record before us, we conclude the trial court erred in granting summary judgment based on collateral estoppel because Notzon failed to conclusively establish that the facts Henry seeks to establish here were actually litigated and essential to the federal court’s summary judgment ruling in Henry’s federal lawsuit against TWC. See Trapnell, 890 S.W.2d at 801 (collateral estoppel elements); Martinez, 941 S.W.2d at 911 (summary judgment burden). Far from “fully and fairly litigated,” the facts Henry seeks to establish here were never litigated in Henry’s federal lawsuit against TWC and thus were not, and could not have been, essential to the federal court’s judgment. See Getty Oil, 845 S.W.2d at 802 (“[C]ollateral estoppel only applies where the identical issue was litigated in the prior suit”); Tarter, 744 S.W.2d 928–29 (“The doctrine of collateral estoppel applies when relitigation could result in an inconsistent determination of the same ultimate issue; it does not bar litigation merely because the outcomes of two suits may appear to be inconsistent.”); Farmland Partners, 2023 WL 4286017, at *10 (reversing summary judgment and remanding case for further proceedings when movant failed to establish collateral estoppel elements).

*9 Additionally, precluding Henry from proceeding with his claim against Notzon does not serve the underlying purposes of the collateral estoppel doctrine, which “is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues.” In re USAA Gen. Indem. Co., 629 S.W.3d at 883 (quoting Trapnell, 890 S.W.2d at 801). Notzon has not been subjected to multiple lawsuits, and because the ultimate issues in Henry’s prior case against TWC and this case are different, precluding him from proceeding with his case against Notzon does not prevent relitigation of issues or inconsistent judgments but instead simply deprives Henry of a possible remedy for a claimed breach of a lawyer’s duty of loyalty to his client. See Farmland Partners, 2023 WL 4286017, at *10 (concluding collateral estoppel’s underlying purposes were not served in that case).

Finally, even if we were to conclude Notzon met the traditional summary judgment burden because Henry requests TWC-employment-related damages from Notzon, summary judgment would still have been improper, at least as to Henry’s claim for equitable relief, which does not require proof of causation. In Parker, the Texas Supreme Court stated:

[I]n Kinzbach²¹ evidence of causation was not necessary because the remedy sought was equitable forfeiture of an improper benefit received by the agent. 160 S.W.2d at 514. Likewise, in Burrow²² the remedy applied was equitable forfeiture of fees paid to attorneys who breached their fiduciary duties, not damages the clients suffered because of the attorneys’ actions or omissions. Burrow, 997 S.W.2d at 239–40. In neither of those cases did we hold that a client need not prove that a breach of fiduciary duty caused actual damages if a client is claiming such damages. Plainly put, for the [nonmovant claimant] to have defeated a no-evidence motion for summary judgment as to a claim for actual damages, the [nonmovant claimant] must have provided evidence that [the movant defendant’s] actions were causally related to the loss of its money. It did not do so. On the other hand, the [nonmovant claimant] was not required to show causation and actual damages as to any equitable remedies it sought.

514 S.W.3d at 221 (emphasis added). Although Parker involved a no-evidence summary judgment context, its statement regarding a claimant’s burden is plain, making it clear Henry is not required to show causation and actual damages as to any equitable relief he seeks.

We sustain Henry’s first issue. Under the circumstances, we do not reach Notzon’s argument regarding Henry’s alleged inability to seek fee forfeiture when he did not pay Notzon’s fees²³ and do not reach Henry’s second issue regarding the trial court’s discovery ruling, as such issues are not necessary to final disposition of the appeal. See TEX. R. APP. P. 47.1 (stating we “must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal”).²⁴ Thus, we make no comment on, and reach no conclusion regarding, the merits of Henry’s second issue, but we see no reason why the trial court could not reconsider the particular discovery dispute discussed therein upon remand.²⁵ We also see no reason why Henry may not raise that issue again in the future, either upon remand or through any applicable appellate procedures, provided any necessary requirements are met.

III. CONCLUSION

*10 We grant Henry’s motion for rehearing, withdraw our prior opinion, vacate our December 22, 2022 judgment, and reverse and remand this case for further proceedings consistent with this opinion.

Footnotes
¹	The Honorable Justice David J. Schenck was originally a member of this panel and participated in oral argument and our prior memorandum opinion but did not participate in the issuance of this memorandum opinion on rehearing. The Honorable Justice Nancy Kennedy succeeded Justice Schenck when his term expired December 31, 2022. Justice Kennedy has reviewed the briefs and the record.
²	Throughout the opinion, we refer to both appellees collectively as “Notzon.”
³	In that lawsuit, Henry sued “Spectrum, L.L.C. and Charter Communications, L.L.C. f/d/b/a Time Warner Cable Texas, L.L.C.” For clarity and brevity, we refer to the company simply as TWC.
⁴	See Henry v. Spectrum, L.L.C., No. 3:18-CV-01086-N, 2019 WL 1254954, 1–4 (N.D. Tex. Mar. 19, 2019), aff’d*, 793 F. App’x 273 (5th Cir. 2019) (per curiam).
⁵	In his federal suit, Henry sought, among other relief, “back pay, front pay[,] ... lost wages and benefits in the past and future, all actual monetary losses,” and “compensatory damages” for the “emotional pain and suffering, mental anguish, and/or other nonpecuniary losses” caused by TWC’s conduct.
⁶	Originally, Notzon moved for summary judgment on both traditional and no-evidence grounds, but ultimately, Notzon proceeded only on a traditional ground based on an affirmative defense of collateral estoppel. In the reply brief in support of summary judgment, Notzon withdrew “their traditional and no-evidence [motions for summary judgment] and evidentiary exhibits to the extent they address summary judgment on a basis other than collateral estoppel” and stated they were relying only on ten paragraphs in their summary judgment motion (specifically, paragraphs thirty-two to forty-one) and five exhibits (specifically, A, G, H, I, and J). Those five exhibits consist of certified copies of various items from Henry’s federal litigation against TWC, including the federal district court’s order granting summary judgment to TWC (exhibit A), Henry’s amended complaint in federal court against TWC (exhibit G), TWC’s brief and reply brief in support of its federal summary judgment motion (exhibits H and J, respectively), Henry’s brief in opposition to TWC’s federal summary judgment motion (exhibit I), and the opinion of the United States Court of Appeals for the Fifth Circuit, which affirmed summary judgment on Henry’s ADAAA and workers’ compensation retaliation claims (exhibit M).
⁷	Traditional “summary judgment for a defendant is proper only when the defendant negates at least one element of each of the plaintiff’s theories of recovery ... or pleads and conclusively establishes each element of an affirmative defense.” Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (1997) (citations omitted) (stating this prior to addition of rule 166a(i)). We include that standard here because only a traditional summary judgment is at issue in this case, as Notzon withdrew his no-evidence motion in his trial court reply brief, and the trial court’s summary judgment order states the court was advised Notzon’s no-evidence motion had been withdrawn. Moreover, a traditional motion is the only type of summary judgment motion available to a party moving for summary judgment on an affirmative defense on which the movant bears the burden of proof. Compare TEX. R. CIV. P. 166a(c) with TEX. R. CIV. P. 166a(i) (allowing a party to file a no-evidence summary judgment motion under subsection (i) “on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial”) (emphasis added); see Calabrian Corp. v. Alliance Specialty Chems., Inc., 418 S.W.3d 154, 157–58 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (noting that res judicata, also known as claim preclusion, and collateral estoppel, also known as issue preclusion, are affirmative defenses, and the party asserting the defense has the burden of pleading and proving its elements); see also Teal Trading & Dev., LP v. Champee Springs Ranches Prop. Owners Ass’n, 593 S.W.3d 324, 333 (Tex. 2020) (“ ‘The hallmark characteristic’ of an affirmative defense ‘is that the burden of proof is on the defendant to present sufficient evidence to establish the defense and obtain the requisite ... findings.’ ”) (quoting Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 156 (Tex. 2015)).
⁸	As Trapnell states, “[s]trict mutuality of parties is no longer required.... To satisfy the requirements of due process, it is only necessary that the party against whom the doctrine is asserted was a party or in privity with a party in the first action.” 890 S.W.3d at 801 (citations omitted).
⁹	See, e.g., Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges: Business, Consumer, Insurance, Employment PJC 104.1–.5 (2020) (questions and instructions regarding breach of fiduciary duty which reflect that in some cases, the fiduciary bears the burden, and in others, the burden is on the beneficiary). We need not, and do not, comment upon the proper questions and instructions that should be given here.
¹⁰	See, e.g., Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges: Business, Consumer, Insurance, Employment PJC 115.15–.18 (2020) (remedies for breach of fiduciary duty (comment) and questions on profit disgorgement, fee forfeiture, actual damages). Again, we need not, and do not, comment upon the proper questions and instructions should be given in this or any other specific case.
¹¹	Exhibit A is the federal district court’s order granting summary judgment to TWC; exhibit M is the Fifth Circuit’s opinion affirming that order.
¹²	See Pattern Jury Instructions of the Dist. Judges Ass’n of the Fifth Circuit, Civil Cases ¶ 11.8 (2020), https://www.lb5.uscourts.gov/viewer/?/juryinstructions/fifth/2020civil.pdf (last visited July 14, 2023) (listing, as the primary pattern jury question, “Has Plaintiff [name] proved that Defendant [name] [specify adverse employment action] Plaintiff [name] because of [his/her] [[having a record of] [specify disability]] [[being regarded as having] [specify impairment]]?” In other words, considering that Henry’s claim was based upon an actual disability (and thus not record-of, or regarded-as, disability), the ultimate issue that would have been posed to the jury on Henry’s termination-related disability discrimination claim was this: “Has Plaintiff Henry proved that Defendant TWC fired Plaintiff Henry because of his diabetes?”
¹³	See Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges: Business, Consumer, Insurance, Employment PJC 107.5 (2020) (question and instruction on retaliation for seeking workers’ compensation benefits).
¹⁴	See 411 U.S. 792, 802–05 (1973).
¹⁵	See Walton v. Powell, 821 F.3d 1204, 1210 (10th Cir. 2016) (referring to McDonnell Douglas framework as a heuristic the trial court had used to guide its analysis on a particular claim); Stephen E. Sachs, Originalism: Standard and Procedure, 135 HARV. L. REV. 777, 810 (2022) (noting “the Supreme Court didn’t find the [McDonnell Douglas framework] squirreled away inside the Civil Rights Act of 1964” and referring to the McDonnell Douglas framework as one example of “[c]ourt-invented heuristics”).
¹⁶	See Kanida v. Gulf Coast Med. Pers. LP, 363 F.3d 568, 575 (5th Cir. 2004) (“The McDonnell Douglas formula, however, is applicable only in a directed verdict or summary judgment situation,” and “is not the proper vehicle for evaluating a case that has been fully tried on the merits.”) (quoting Powell v. Rockwell Int’l Corp., 788 279, 285 (5th Cir. 1986)).
¹⁷	To prove the causation element in his disability discrimination claims against TWC, Henry needed only to show discrimination “actually play[ed] a role in [TWC’s] decision making process and [had] a determinative influence on the outcome[,]” “not that discrimination was the sole cause for his termination.” See Pinkerton v. Spellings, 529 F.3d 513, 519 (5th Cir. 2008); see also McNely v. Ocala Star–Banner Corp., 99 F.3d 1068, 1070 (11th Cir. 1996) (concluding a plaintiff suing for disability discrimination can recover for discrimination without showing his disability was the sole cause for the adverse employment action taken against him). To prove the causation element in his workers’ compensation retaliation claims, Henry did not have to prove his termination was solely because of his protected activity under Chapter 451; instead, he needed only to show that his protected activity was “such that, without it, [TWC’s] prohibited conduct would not have occurred when it did.” Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996) (quoting Tex. Dep’t of Hum. Servs. v. Hinds, 904 S.W.2d 629, 631 (Tex. 1995)). Hinds, which involved a government whistleblower claim, stated the protected activity “need not be the employer’s sole motivation, but it must be such that without it, the discriminatory conduct would not have occurred when it did.” 904 S.W.2d at 631.
¹⁸	See Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 774 (Tex. 2010) (“There may be more than one proximate cause of an event.”); Travis v. City of Mesquite, 830 S.W.2d 94, 98 (Tex. 1992) (stating, in an appeal of a negligence action, “There can be concurrent proximate causes of an accident. All persons whose negligent conduct contributes to the injury, proximately causing the injury, are liable.”).
¹⁹	Even if the federal court concluded that Henry’s wreck was the cause of his termination—a matter unsupported by this record—one important misstep in Notzon’s logic is that he argues, in essence, that such a finding would mean that no other cause for termination could exist. This logical leap not only ignores our prior point that there may be more than one proximate cause of an event but is also somewhat similar to cases in which a party attempts to turn a would-be negative finding into an affirmative one. See, e.g. Phila. Indem. Ins. Co. v. White, 490 S.W.3d 468, 488 (Tex. 2016) (“Characterizing the jury’s negative response to [a question regarding negligence] as an affirmative finding that [the party] did not cause the damage thus misinterprets the jury’s finding.”) (also discussing other cases); Tarter, 744 S.W.2d at 928 (rejecting movant’s argument regarding implied negative finding when movant was not a party to the prior action and its conduct was not an issue in the prior trial). Such arguments misinterpret jury findings in cases where such findings have been made, and the misinterpretation is only heightened here, in the summary judgment context.
²⁰	As one example of a similar conclusion in a case involving multiple claims regarding a termination of employment, see Leon v. N.Y.C. Dept. of Educ., 612 F. App’x 632, 634–35 (2d Cir. 2015) (summary order) (on appeal of federal rule 12(b)(6) dismissal of a discriminatory firing claim, appellate court concluded claim was not barred by collateral estoppel despite a finding in an earlier administrative proceeding that the employer had just cause to fire the employee; court stated, “The [trial] court’s error ... stems from the faulty assumption that [the just cause finding] necessarily precludes the possibility of termination motivated by [the alleged unlawful animus]” alleged in the second proceeding).
²¹	See Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509 (Tex. 1942).
²²	See Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999).
²³	On appeal, Notzon argues Henry is not entitled to equitable relief in the form of fee forfeiture because he did not personally pay Notzon’s fees. Henry disputes this argument. We need not decide that question because it could not have formed the basis for the trial court’s summary judgment, as Notzon did not include that as a ground for summary judgment and did not raise that argument in the trial court. See TEX. R. CIV. P. 166a(c) (“The motion for summary judgment shall state the specific grounds therefor” and “[i]ssues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.”); see also Nall v. Plunkett, 404 S.W.3d 552, 555 (Tex. 2013) (stating, “A trial court cannot grant summary judgment on grounds that were not presented” and “the court of appeals cannot ‘read between the lines’ or infer from the pleadings any grounds for granting the summary judgment other than those grounds expressly set forth before the trial court.” ) (citations omitted).
²⁴	Henry’s second issue is unnecessary to the disposition of the appeal both because our sustaining of his first issue requires reversal and remand and because the parties have at least implicitly suggested as much, through their rule 6.6 agreement. See TEX. R. APP. P. 6.6.
²⁵	In his second issue, Henry argues the trial court erred in denying Henry’s motion to compel production of Notzon’s file, “specifically all of the documents identified in Notzon’s privilege log, the calendar used to refresh Notzon’s recollection and in refusing to compel Notzon to answer all questions regarding his secret meetings with TWC.”

Court of Appeals of Texas, Dallas.

HARTFORD ACCIDENT & INDEMNITY COMPANY, Appellant

JANERY FRANCOIS, Appellee

No. 05-21-00981-CV

Opinion Filed May 23, 2023

On Appeal from the 68th Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-17-08336

Before Justices Partida-Kipness, Nowell, and Wright¹ Opinion by Justice Partida-Kipness

MEMORANDUM OPINION

ROBBIE PARTIDA-KIPNESS JUSTICE

*1 Reversed, Rendered, and Opinion Filed May 23, 2023

This appeal involves a dispute over the allocation of a third-party settlement in a workers’ compensation case. Appellant Hartford Accident & Indemnity Company, the workers’ compensation carrier, appeals the trial court’s judgment following a bench trial. Hartford challenges the trial court’s allocation of the settlement amount and award of additional attorney’s fees of $10,000. We conclude the trial court’s allocation was erroneous and the additional award of attorney’s fees was an abuse of discretion. We reverse the judgment and render the judgment the trial court should have rendered.

BACKGROUND

Appellee Janery Francois sustained a work-related injury in 2015. Hartford paid Francois $356,669.73 in medical and indemnity benefits under her employer’s workers’ compensation policy. Francois sued the owner and operator of the building where she sustained her injury, Parmenter Realty & Investment Company, Inc., and settled that claim for $150,000. Hartford then intervened in the lawsuit and asserted its subrogation rights. Hartford and Francois disagreed on how the $150,000 settlement should be allocated in relation to the workers’ compensation lien. At the center of the dispute was the parties’ disagreement of how to calculate “the net amount recovered” by Francois under section 417.002(a) of the Texas Labor Code. See TEX. LAB. CODE § 417.002(a) (“The net amount recovered by a claimant in a third-party action shall be used to reimburse the insurance carrier for benefits, including medical benefits, that have been paid for the compensable injury.”). The dispute proceeded to a bench trial.

At trial, Francois’s counsel maintained the “net recovery”² is determined after counsel’s 40% contingency fee is taken out of the gross settlement. Using this framework, Francois calculated the “net recovery” to be $85,206.03 as follows:

Tabular or graphical material not displayable at this time.

*2 Counsel next argued that the trial court could award him additional attorney’s fees under section 417.003 because Hartford did not participate in the lawsuit against Parmenter Realty. See TEX. LAB. CODE § 417.003(a).³ Francois’s counsel agreed any fees awarded under section 417.003 could not exceed one-third of the “net recovery.” See id. § 417.003(a)(1). Using that formula, counsel concluded he was entitled to an award of $28,117.98 as section 417.003 attorney’s fees, which was one-third of the net recovery of $85,206.03. By subtracting the section 417.003 fees from the net recovery, Francois’s counsel argued Hartford’s recovery should be $58,088.05:

Tabular or graphical material not displayable at this time.

Finally, Francois’s counsel argued he was entitled to attorney’s fees of $10,000 defending the intervention and participating in the bench trial. He sought those fees under section 37.009 of the Texas Civil Practice and Remedies Code and maintained he was entitled to such fees because Hartford refused to negotiate a lesser recovery. Francois characterized Hartford’s unwillingness to negotiate a lower subrogation lien as an improper tactic and intentional failure to follow established law.

Hartford, in contrast, argued that under the “first money” rule, Hartford’s recovery is calculated by subtracting section 417.003 fees and expenses from the gross settlement. Hartford’s calculation was simple:

Tabular or graphical material not displayable at this time.

The trial court adopted Francois’s proposed allocation. Following a bench trial, the trial court rendered judgment on Hartford’s declaratory judgment claim and awarded $57,088.04 of the settlement to Hartford, and $92,911.96 to Francois and her counsel. The $92,911.96 awarded to Francois and her counsel was comprised of the following: (1) attorney’s fees of $60,000, which was 40% of the gross settlement, (2) reasonable and necessary expenses of $4,793.97, and (3) section 417.003 fees of $28,117.99, which was one-third of the “net recovery” calculated by the court. The trial court also awarded Francois’s counsel additional attorney’s fees of $10,000 pursuant to TEX. CIV. PRAC. & REM. CODE § 37.009. This appeal followed.

ANALYSIS

Hartford brings two issues on appeal. First, Hartford challenges the trial court’s allocation of the settlement amount. Second, Hartford contends the trial court abused its discretion by awarding Francois’s counsel $10,000 in additional attorney’s fees.

I. Allocation of Settlement

In its first issue, Hartford contends the trial court’s settlement allocation failed to award Hartford the statutorily-required “first money” from Francois’s third-party settlement. Hartford maintains it should have recovered $95,206.03, not $57,088.04 as awarded in the judgment. We review this issue de novo because it presents the Court with a question of law concerning statutory interpretation and application. Empower Texans, Inc. v. Dallas Cnty., 648 S.W.3d 664, 669 (Tex. App.—Dallas 2022, pet. denied) (citing Bush v. Lone Oak Club, LLC, 601 S.W.3d 639, 647 (Tex. 2020)).

*3 An employee may seek damages from a third party who is liable for an injury that is compensable under the labor code. TEX. LAB. CODE § 417.001(a). When a benefit is claimed by an injured employee, the insurance carrier is subrogated to the rights of the injured employee. Id. § 417.001(b). The distribution of the proceeds recovered from third parties is governed by section 417.002, which provides:

(a) The net amount recovered by a claimant in a third-party action shall be used to reimburse the insurance carrier for benefits, including medical benefits, that have been paid for the compensable injury.

Id. § 417.002(a).

It is well-established that an insurance carrier is entitled to recover all benefits paid to an injured worker out of the “first money” the worker recovers from a liable third party. See, e.g., Exxon Mobile Corp. v. Ins. Co. of Am., 568 S.W.3d 650, 651, 655–56 (Tex. 2019) (citing TEX. LAB. CODE §§ 417.001–.002) (the insurance carrier has the right to “the first money a worker receives from a tortfeasor,” and “the employee has no right to any sums recovered from a third party until the carrier is reimbursed in full.”) (internal quotation marks and footnotes omitted); see also Tex. Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31, 35 (Tex. 2008) (“carrier gets the first money a worker receives from a tortfeasor”); Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 530 (Tex. 2002) (“For decades, the law has been that, under the Workers’ Compensation Act’s subrogation provision, ‘the first money paid [to] or recovered by the employee, or his representatives, belongs to the compensation carrier paying the compensation, and until it is paid in full, the employee, or his representatives, have no right to any funds.’ ”) (quoting Fort Worth Lloyds v. Haygood, 151 Tex. 149, 246 S.W.2d 865, 869 (1952)). The subrogation right “creates a lien in favor of the insurance carrier in the amount it has paid to an employee out of the first money recovered from the third-party tortfeasor.” Tex. Workers’ Comp. Ins. Fund v. Alcorta, 989 S.W.2d 849, 851 (Tex. App.—San Antonio 1999, no pet.).

“[U]ntil a carrier is reimbursed in full, ‘the employee or his representatives have no right to any of such funds.’ ” Ledbetter, 251 S.W.3d at 36 (quoting Capitol Aggregates, Inc. v. Great Am. Ins. Co., 408 S.W.2d 922, 923 (Tex. 1966)). “Thus, rather than the employee owning the money and being forced to disgorge it, the carrier is first entitled to the money up to the total amount of benefits it has paid, ....” Argonaut Ins., 87 S.W.3d at 530. “After the carrier is fully reimbursed, then any additional money goes to the employee.” Delgado v. Tex. Mun. League Intergovernmental Risk Pool, No. 13-09-00126-CV, 2009 WL 2712416, at *2 (Tex. App.—Corpus Christi–Edinburg Aug. 31, 2009, no pet.) (mem. op.) (citing TEX. LAB. CODE § 417.002(b)). “First-money reimbursement is essential to the workers’ compensation system because it reduces costs to the carrier and, thus, to the employer and the public.” Delgado, 2009 WL 2712416, at *2–3; Ledbetter, 251 S.W.3d at 35 (noting another benefit of first-money reimbursement is the prevention of “double recovery by workers.”).

However, a “first money” recovery does not always result in an insurer recovering the full amount of the settlement. Rather, the subrogation amount must be calculated in accordance with section 417.003, which provides that the employee’s attorney may recover certain attorney’s fees and “a proportionate share of expenses” as compensation for pursuing the third-party action. TEX. LAB. CODE § 417.003(a). That provision states:

*4 (a) An insurance carrier whose interest is not actively represented by an attorney in a third-party action shall pay a fee to an attorney representing the claimant in the amount agreed on between the attorney and the insurance carrier. In the absence of an agreement, the court shall award to the attorney payable out of the insurance carrier’s recovery:

(1) a reasonable fee for recovery of the insurance carrier’s interest that may not exceed one-third of the insurance carrier’s recovery; and

(2) a proportionate share of expenses.

Id. § 417.003(a). “By enacting section 417.003, the legislature intended to compensate claimants who perform work for the benefit of a subrogated insurance carrier and to prohibit the worker’s compensation carrier from obtaining a ‘free ride’ from the efforts of the claimant’s attorney.” Caesar v. Bohacek, 176 S.W.3d 282, 285 (Tex. App.—Houston [1st Dist.] 2004, no pet.).

Here, it is undisputed that Hartford provided workers’ compensation coverage and paid Francois $356,669.73 in medical and indemnity benefits. The parties also agree Hartford did not participate in the underlying third-party action, and the settlement was procured solely by the efforts of Francois’s counsel. As such, sections 417.001, 417.002(a), and 417.003(a) apply to the allocation of Francois’s settlement with Parmenter Realty. TEX. LAB. CODE §§ 417.001, 417.002(a), 417.003(a). The parties disagree, however, with the application of those provisions to the settlement.

The dispute centers on the definition of “net amount recovered” in section 417.002(a) and how to calculate section 417.003 fees. Francois maintains the “net amount recovered” is the settlement amount minus her counsel’s 40% contingency fee and pro rata expenses. Hartford, in contrast, contends the “net amount recovered” is $150,000 (the gross settlement) and section 417.003 must be calculated from that amount. We agree with Hartford.

Chapter 417 of the labor code does not define “net amount recovered.” TEX. LAB. CODE § 417.002(a). Two of our sister courts, however, have defined “net amount recovered” as Hartford does here and explained how section 417.002 and 417.003 work together to allocate third-party settlement funds. See Alcorta, 989 S.W.2d at 852; see also Delgado, 2009 WL 2712416, at *4.

For example, in Alcorta, the third-party settlement of $20,035.00 was less than the subrogation lien of $28,031.11. Alcorta, 989 S.W.2d at 850. The trial court allocated the settlement amount by awarding Alcorta’s attorney the amount of fees for which she had contracted, $8,014.00, or approximately 40% of the recovery, awarding Alcorta costs of court in the amount of $813.50, and awarding the carrier the remaining balance of $11,207.50. Id. at 851. The San Antonio Court of Appeals concluded the allocation was erroneous because the fees awarded to counsel constituted “an impermissible circumvention of the statutory limit on attorney’s fees as to the carrier’s subrogation recovery.” Id. at 852 (citing TEX. LAB. CODE § 417.003(c)). The Alcorta court noted that the Fund’s “recovery was $20,035.00,” (i.e., the gross settlement), and the amount of fees permitted under the statute could not exceed one-third of that recovery. Id. at 851–52 (noting that section 417.003 fees “are payable out of the carrier’s subrogation recovery in an amount not to exceed one-third of the insurance carrier’s recovery.”). In so holding, the court explained the relationship between sections 417.002(a) and 417.003, and defined “net amount recovered” as the settlement amount minus section 417.003 fees:

*5 The “net amount recovered” by the employee is the third-party recovery less the employee’s attorney’s fees. That is, by statutory design, the “first money” owed to the carrier—the net amount recovered under section 417.002(a)—is a sum which has been reduced by allowable attorney’s fees under section 417.003. Defining “net amount recovered” in this manner gives meaning to both sections 417.002 and 417.003.

Id. at 852 (internal citations omitted).

The Thirteenth Court of Appeals similarly used the gross settlement amount as the “net amount recovered” from which it then calculated the appropriate Chapter 417 allocation. Delgado, 2009 WL 2712416, at *4. In that case, Delgado received $25,028 in settlement proceeds from the third-party tortfeasor, and the trial court awarded Delgado’s trial attorney fees of $8,342.66, which was one-third of the settlement proceeds. Id. The appellate court affirmed the allocation “[b]ecause the award of attorney’s fees comports with section 417.003 of the labor code, ...” Id. In reaching that conclusion, the Delgado court explained that the “net amount recovered” under section 417.002(a) is “the ‘first money’ owed to the carrier” and “is a sum which has been reduced by allowable attorney’s fees under section 417.003.” Delgado, 2009 WL 2712416, at *3 (quoting Alcorta, 989 S.W.2d at 852).

In both Alcorta and Delgado, the subrogation lien exceeded the third-party settlement. Under those circumstances, the “net amount recovered” was calculated by subtracting the fees and proportionate expenses permitted under section 417.003 from the total settlement amount. We agree with this approach.

Under Chapter 417, the insurance carrier has the right to “the first money a worker receives from a tortfeasor,” and “the employee has no right to any sums recovered from a third party until the carrier is reimbursed in full.” Stevenson v. Texas Mut. Ins. Co., No. 05-21-00464-CV, 2022 WL 1514670 at *2 (Tex. App.—Dallas May 13, 2022, pet. denied) (mem. op.) (quoting Exxon Mobile Corp. v. Ins. Co. of Am., 568 S.W.3d 650, 655–56 (Tex. 2019)). Hartford is, therefore, entitled to the first money Francois recovered in the settlement with Parmenter Realty, and Francois has no right to the settlement money until Hartford is paid in full. See Stevenson, 2022 WL 1514670 at *2. Here, the settlement amount ($150,000.00) does not exceed the amount of Hartford’s subrogation interest ($356,669.73). Where, as here, the settlement amount does not exceed the subrogation interest, the carrier is entitled to the full amount of the settlement minus payment of attorney’s fees and expenses that the carrier must pay to the claimant’s counsel pursuant to section 417.003. See id.; see also Delgado, 2009 WL 2712416, at *3; Alcorta, 989 S.W.2d at 852. We conclude the trial court erred by using a “net amount recovered” that was less than the total settlement to allocate the settlement under Chapter 417.

Further, the trial court abused its discretion by awarding Francois’s counsel’s attorney’s fees in excess of one-third of the total settlement. The $92,911.96 awarded to Francois and her counsel included: (1) attorney’s fees of $60,000, which was 40% of the total settlement, (2) reasonable and necessary expenses of $4,793.97, and (3) additional attorney’s fees of $28,117.99, which was one-third of the “net recovery” calculated by the court. Section 417.003 caps any fees awarded to a claimant’s attorney at “one-third of the insurance carrier’s recovery.” TEX. LAB. CODE § 417.003(a). As discussed above, Hartford’s recovery for the purposes of section 417.003 is the total settlement of $150,000. The trial court’s award of $88,117.99 in fees is 58.7% of the total settlement and therefore, in excess of what is permitted under the statute.

*6 Applying the authorities cited above, we conclude Hartford was entitled to recover $95,206.03, which is the full amount of the $150,000 settlement minus section 417.003 fees of $50,000 and proportionate expenses of $4,793.97 properly awarded to Francois and her counsel.⁴ See TEX. LAB. CODE § 417.003(a); see also Stevenson, 2022 WL 1514670 at *2. We sustain Hartford’s first issue, reverse the trial court’s judgment on Hartford’s declaratory judgment action, and render judgment awarding Hartford $95,206.03 and awarding Francois and her counsel $54,793.97.

II. Additional Attorney’s Fees

In its second issue, Hartford argues Francois’s counsel was not entitled to additional attorney’s fees under Chapter 37 of the Texas Civil Practice and Remedies Code (the Uniform Declaratory Judgments Act or UDJA). We review an award of attorney’s fees for an abuse of discretion. Univ. of Tex. Health Sci. Ctr. at San Antonio v. Mata & Bordini, Inc., 2 S.W.3d 312, 319 (Tex. App.—San Antonio 1999, pet. denied).

The UDJA provides that a trial court may award costs and reasonable attorney’s fees when doing so is equitable and just. TEX. CIV. PRAC. & REM. CODE § 37.009. The UDJA “entrusts attorney fee awards to the trial court’s sound discretion, subject to the requirements that any fees awarded be reasonable and necessary, which are matters of fact, and to the additional requirements that fees be equitable and just, which are matters of law.” Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). “Unreasonable fees cannot be awarded [under the UDJA], even if the [trial] court believed them just, but the court may conclude that it is not equitable or just to award even reasonable and necessary fees.” Id. A party need not prevail to be awarded attorney’s fees under the UDJA. Castille v. Serv. Datsun, Inc., No. 01-16-00082-CV, 2017 WL 3910918, at *10 (Tex. App.—Houston [1st Dist.] Sept. 7, 2017, no pet.) (mem. op.); Hunt v. Baldwin, 68 S.W.3d 117, 135 (Tex. App.—Houston [14th Dist.] 2001, no pet.). The question of whether a fee award is equitable and just “is not susceptible to direct proof but is rather a matter of fairness in light of all the circumstances.” Ridge Oil Co., v. Guinn Invs., Inc., 148 S.W.3d 143, 162 (Tex. 2004). Hartford argues the award of $10,000 in attorney’s fees was not equitable and just. We agree.

First, the award of additional fees to Francois is in direct contravention of the limit on fees imposed by section 417.003 and constitutes a windfall for Francois. TEX. LABOR CODE § 417.003(a) (the fee awarded by the trial court may not exceed one-third of the carrier’s recovery). By awarding the additional fees, the amount of fees awarded to Francois’s attorneys exceeds one-third of the net amount recovered (in this case, the full settlement amount) and, therefore, violates the labor code. See Argonaut Ins. Co. v. Barron, No. 05-96-00488-CV, 1998 WL 32710, at *4 (Tex. App.—Dallas Jan. 30, 1998, no pet.) (mem. op.) (concluding award of $1,500 of additional fees was improper because (1) the fees caused the plaintiff’s fees award to exceed the amount permitted by section 417.003, and (2) such fees were not recoverable under section 38.001 because the plaintiff failed to plead for Chapter 38 fees).

*7 Second, Francois provides no basis for such an award, nor any reason why such an award is equitable and just. Francois’s counsel argued at trial that additional fees should be awarded because Hartford “deliberately refused to agree to a three-way split” of the settlement and relied on a Louisiana case to refuse the three-way split:

But I believe Hartford in this situation deliberately, deliberately refused to agree to a three-way split knowing that they should, and knowing what the law is. And they came into your court talking about some Louisiana case that they brought, completely different calculations. And because of what they did and how they acted, that’s why I believe in addition to how we believe the split should be done, I believe we should be awarded attorney’s fees.

According to Francois’s counsel, the carrier, employee, and employee’s counsel “always” agree to split a settlement three ways, and he has entered into those agreements “dozens of times.” But Francois cites no authority to support an argument that Hartford was under any obligation to reduce its lien and accept a three-way split. Instead, counsel relied on a 1998 opinion from this Court to argue Hartford was either required to agree to Francois’s proposed allocation of the settlement funds or acted in bad faith by refusing the allocation. See Lumbermens Mut. Casualty Co. v. Parrent, No. 05-96-01144-CV, 1998 WL 182803, at *1(Tex. App.—Dallas Apr. 20, 1998, no pet.) (not designated for publication).

The reliance on Lumbermens Mutual is misplaced. That case has no precedential value because it was decided before January 1, 2003 and was not designated for publication. See City of Dallas v. Gatlin, 329 S.W.3d 222, 228 (Tex. App.—Dallas 2010, no pet.) (citing TEX. R. APP. P. 47.7(b)). Further, the opinion applied a prior and now-repealed statute. Lumbermens Mut., 1998 WL 182803, at *1, n.2 (noting that the workers’ compensation act applicable there was repealed in December 1989 and replaced by a new workers compensation act effective January 1991). Moreover, neither Lumbermens Mutual nor Chapter 417 required Hartford to accept any payment less than the total amount of its subrogation lien. On the contrary, Hartford has a statutory right to recover the entirety of the lien. See TEX. LAB. CODE §§ 417.001–.002. As for Hartford relying on Louisiana law, the record shows no such reference or reliance. Hartford consistently cited to binding Texas Supreme Court authority, including Ledbetter and Argonaut Insurance, persuasive appellate court cases, and the plain language of the statute to support its arguments concerning the proper allocation of the settlement. See, e.g., Ledbetter, 251 S.W.3d at 35; Argonaut Ins., 87 S.W.3d at 530.

Hartford was well within its rights to seek the full amount of reimbursement permitted under Chapter 417. The award of additional attorney’s fees penalizes Hartford for pursuing its statutory rights and is not equitable or just. See Mata & Bordini, Inc., 2 S.W.3d at 319 (“Because both parties had legitimate rights to pursue, the trial court did not act unreasonably or capriciously in determining that each party should bear its own attorney’s fees.”). Under this record, we conclude the trial court abused its discretion by awarding Francois additional attorney’s fees of $10,000. We reverse the trial court’s award of those fees.

CONCLUSION

*8 The trial court erroneously allocated the settlement in this case and abused its discretion by awarding Francois additional attorney’s fees under the UDJA. Accordingly, we reverse the trial court’s judgment and render judgment that Hartford recover $95,206.03, and Francois recover attorney’s fees of $50,000 and pro rata expenses of $4,793.97.

Footnotes
¹	The Hon. Carolyn Wright, Justice, Assigned
²	Francois’s counsel referred to the “net amount recovered” of section 417.002(a) as the “net recovery” at trial. These terms are not interchangeable. To accurately reflect the parties’ arguments, however, we will use the term “net recovery” in this opinion when that is the term used by Francois below.
³	Section 417.003(a) of the labor code provides: (a) An insurance carrier whose interest is not actively represented by an attorney in a third-party action shall pay a fee to an attorney representing the claimant in the amount agreed on between the attorney and the insurance carrier. In the absence of an agreement, the court shall award to the attorney payable out of the insurance carrier’s recovery: (1) a reasonable fee for recovery of the insurance carrier’s interest that may not exceed one-third of the insurance carrier’s recovery; and (2) a proportionate share of expenses. TEX. LAB. CODE § 417.003(a).
⁴	To support her allocation calculation, Francois relies on Lumbermens Mut. Casualty Co. v. Parrent, No. 05-96-01144-CV, 1998 WL 182803, at 1(Tex. App.—Dallas Apr. 20, 1998, no pet.) (not designated for publication). We find Lumbermens Mutual* inapplicable. Because the case was decided before January 1, 2003 and was not designated for publication, it has no precedential value. See City of Dallas v. Gatlin, 329 S.W.3d 222, 228 (Tex. App.—Dallas 2010, no pet.) (citing TEX. R. APP. P. 47.7(b)). Further, the opinion applied a prior and now-repealed statute. Lumbermens Mut., 1998 WL 182803, at *1, n.2 (noting that the workers’ compensation act applicable there was repealed in December 1989 and replaced by a new workers compensation act effective January 1991).

Court of Appeals of Texas, Dallas.

LEONEL OLIVARES, Appellant

CHEVRON PHILLIPS CHEMICAL COMPANY, LP, Appellee

No. 05-22-00057-CV

Opinion Filed March 14, 2023

On Appeal from the 192nd Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-22-00339

Before Chief Justice Burns, Justice Molberg, and Justice Reichek

Opinion by Chief Justice Burns

MEMORANDUM OPINION

ROBERT D. BURNS, III CHIEF JUSTICE

*1 REVERSE and REMAND Opinion Filed March 14, 2023

In this personal-injury suit, Leonel Olivares appeals the dismissal of his suit pursuant to Chevron Phillips Chemical Company, LP’s plea to the jurisdiction. However, Chevron’s arguments in support of dismissal concerned an affirmative defense, not a jurisdictional issue, and thus a plea to the jurisdiction was the wrong procedural vehicle to pursue. And though the dismissal could nonetheless be upheld if Chevron had satisfied the summary-judgment standard by conclusively proving this defense, it did not do so here. We therefore reverse and remand.

I. BACKGROUND

In October 2017, Olivares was working for Apache Global Painting, Inc. when he was injured at a jobsite owned by appellee Chevron. Olivares filed a workers’ compensation claim and received benefits under Apache Global’s workers’ compensation policy, which was issued by Zurich. In October 2019, he sued Chevron and other entities not at issue here.

In response, Chevron asserted the exclusive-remedy defense pursuant to the Texas Worker’s Compensation Act (TWCA). In February 2020, Chevron filed a motion for summary judgment based on this defense. According to Chevron, the defense applied because Chevron had provided Olivares with workers’ compensation coverage through its owner-controlled insurance program policy or OCIP policy issued by the Hartford. In spring 2020, it was pointed out that Olivares’s claim was instead being covered under Apache Global’s policy, not Chevron’s OCIP, so Chevron arranged to reimburse Zurich for its expenses on Olivares’s claim.

Olivares resisted summary judgment on the exclusive-remedy defense. He noted that to qualify for the defense under the circumstances present here, the defendant must be the plaintiff’s employer. It was undisputed that Olivares was employed by Apache Global, not Chevron. He conceded that there were provisions in the TWCA that would have constructively made Chevron his employer if Chevron had satisfied certain conditions, but he contended that Chevron did not satisfy these conditions. Under these provisions, Chevron had to provide OCIP insurance pursuant to a written agreement with Olivares’s employer. However, Olivares noted that there was no OCIP policy in the record, and the only purported written agreements were a contract and an application signed by Apache Global’s parent company, Apache Industrial Services, Inc., not Apache Global itself.

In response, Chevron contended that these documents were actually signed by Apache Global under its assumed name, which happened to be the same name as its parent company, Apache Industrial. Chevron supplemented its summary-judgment record with an assumed-name certificate reflecting that Apache Global’s assumed name was indeed Apache Industrial.

The trial court denied Chevron’s motion for summary judgment. Chevron moved to permit an interlocutory appeal, which the trial court also denied.

Chevron then filed a plea to the jurisdiction. In it, Chevron restyled its prior arguments as jurisdictional ones, arguing that its evidence had the effect of triggering the exclusive jurisdiction of the Division of Worker’s Compensation.

*2 The trial court granted the plea to the jurisdiction. It severed Olivares’s claim against Chevron and dismissed that claim with prejudice. This appeal followed.

II. EXCLUSIVE-REMEDY DEFENSE

In his first issue, Olivares argues that a plea to the jurisdiction was an improper way to raise the exclusive-remedy defense. We agree.

The TWCA provides that recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance against the employer for a work-related injury sustained by the employee. TEX. LABOR CODE § 408.001(a); Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514, 516 (Tex. 2007). “Under the TWCA, a ‘general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the subcontractor.’ ” Maxim Crane Works, L.P. v. Zurich Am. Ins. Co., 642 S.W.3d 551, 558 (Tex. 2022) (quoting TEX. LABOR CODE § 406.123(a)). “Entering into such an agreement ‘makes the general contractor the employer of the subcontractor and the subcontractor’s employees only for purposes of the workers’ compensation laws of this state.’ ” Id. (quoting TEX. LABOR CODE § 406.123(e)).

Unlike the exclusive-jurisdiction doctrine, exclusive remedy is an affirmative defense. Vega v. Silva, 223 S.W.3d 746, 748 (Tex. App.—Dallas 2007, no pet.). As an affirmative defense, exclusive remedy should not be disposed of with a motion to dismiss such as a plea to the jurisdiction; it should instead be raised through a motion for summary judgment or proven at trial. Medrano v. Kerry Ingredients & Flavours, Inc., No. 02-20-00247-CV, 2021 WL 1323432, at *2 (Tex. App.—Fort Worth Apr. 8, 2021, no pet.) (mem. op.) (quoting Tex. Underground, Inc. v. Tex. Workforce Comm’n, 335 S.W.3d 670, 675–76 (Tex. App.—Dallas 2011, no pet.)). “Thus, pursuing the exclusive-remedy defense through a plea to the jurisdiction ‘is problematic and not to be encouraged.’ ” Id. (quoting Robles v. Mount Franklin Food, L.L.C., 591 S.W.3d 158, 163 (Tex. App.—El Paso 2019, pet. denied)).

Rather, we presume that the district court had jurisdiction. A Texas district court is a court of general jurisdiction. Dubai Petro. Co. v. Kazi, 12 S.W.3d 71, 75 (Tex. 2000) (op. on reh’g). For courts of general jurisdiction, the presumption is that they have subject-matter jurisdiction unless a showing can be made to the contrary. Id. No party has made a contrary showing here, and thus the trial court had no basis to dismiss for want of jurisdiction. Medrano, 2021 WL 1323432, at *2.

Nonetheless, if a summary-judgment procedure is not utilized when exclusive remedy is asserted, the reviewing court may treat a dismissal as a summary judgment because dismissal with prejudice has the same effect as a take-nothing judgment. Briggs v. Toyota Mfg. of Tex., 337 S.W.3d 275, 281 (Tex. App.—San Antonio 2010, no pet.). In such a case, we review the record under the summary-judgment standard to determine whether the movant satisfied the notice and proof requirements of Rule 166a. Id.

In his second issue, Olivares argues that if the case is to be assessed under the summary-judgment standard, then Chevron did not conclusively prove its right to final disposition. Again, we agree.

*3 We review a summary judgment de novo. Berry v. Berry, 646 S.W.3d 516, 523 (Tex. 2022). A party moving for traditional summary judgment has the burden to prove that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); AEP Tex. Cent. Co. v. Arredondo, 612 S.W.3d 289, 293 (Tex. 2020). We review summary-judgment evidence in the light most favorable to the party resisting summary judgment, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637, 641 (Tex. 2015). When a defendant conclusively establishes all the elements of an affirmative defense to a plaintiff’s claim, the defendant is entitled to summary judgment. KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015).

The question is whether Chevron conclusively proved that, in accordance with a written agreement with Apache Global, it provided workers’ compensation coverage to Apache Global and its employees. Briggs, 337 S.W.3d at 282. We conclude that Chevron has not satisfied its burden.

Chevron failed to produce any written agreement with Apache Global by which Chevron was to provide OCIP coverage. Instead, Chevron produced a contract and an application form that were signed not by Olivares’s actual employer Apache Global, but by its parent company Apache Industrial.

According to Chevron, Apache Global should be considered the true signatory of these documents because Apache Global did business under the trade name of its parent corporation, Apache Industrial. Chevron notes that Apache Global had executed an assumed-name certificate to that effect. Chevron reasons that because Apache Global did business under the name of its parent, and because its parent signed OCIP-related documents for Chevron’s project, these documents should effectively count as the requisite written agreement between Apache Global and Chevron. We disagree.

Apache Global and its subsidiary Apache Industrial are separate entities, and by default, a subsidiary’s employees are not also employees of the parent company. “[C]orporate affiliates are generally created to separate the businesses, liabilities, and contracts of each.” In re Merrill Lynch Tr. Co. FSB, 235 S.W.3d 185, 191 (Tex. 2007) (orig. proceeding). “Thus, a contract with one corporation ... is generally not a contract with any other corporate affiliates.” Id. The same logic extends to employment contracts: “The doctrine of limited liability creates a strong presumption that a parent corporation is not the employer of its subsidiary’s employees.” Lusk v. Foxmeyer Health Corp., 129 F.3d 773, 778 (5th Cir. 1997); see Ross Stores, Inc. v. Miller, 612 S.W.3d 682, 686 (Tex. App.—Houston [14th Dist.] 2020, no pet.). For instance, in one case, the San Antonio Court of Appeals denied arbitration on claims brought by an employee of the subsidiary Macy’s Texas I, L.P. based an agreement that bound the employees of its parent, Macy’s West, Inc., even though the two operated under the same trade name. In re Macy’s TX I, L.P., No. 04-08-00469-CV, 2008 WL 2828794, at *1 (Tex. App.—San Antonio July 23, 2008, orig. proceeding) (per curiam) (mem. op.), mand. granted on other grounds In re Macy’s Tex., Inc., 291 S.W.3d 418, 419 (Tex. 2009) (orig. proceeding); accord Verity Sols., L.L.C. v. TASC, Inc., 2006 WL 488396, at *4 (W.D. Tex. Feb.6, 2006).

As the Macy’s case suggests, the use of a trade name does not allow one entity to formally transmute itself into another. “An ‘assumed name’ is a word or phrase by which a person may be made known to the public, and [it] is not a legal entity.” CA Partners v. Spears, 274 S.W.3d 51, 69 n.11 (Tex. App.—Houston [14th Dist.] 2008, pet. denied). “[A]n individual cannot sign for and bind a DBA entity. A DBA is no more than an assumed or trade name. And it is well-settled that a trade name has no legal existence.” Kahn v. Imperial Airport, L.P., 308 S.W.3d 432, 438 (Tex. App.—Dallas 2010, no pet.).

*4 Our decision in Lopez v. Rosewood Real Estate Equities demonstrates the point. No. 05-97-00215-CV, 1999 WL 562709, at *4 (Tex. App.—Dallas Aug. 3, 1999, no pet.) (not designated for publication). There, a company called Crescent agreed to operate the Spa at the Crescent Hotel, and Crescent employed the plaintiff until it fired him for misappropriation. Id. at *1. The plaintiff filed suit for defamation against Crescent and its employees, as well as the Rosewood entities, who were the alleged owners of the hotel. Id. He noted that the Rosewood entities had filed an assumed-name certificate to operate as the Spa, and because the defaming defendants were employees of the Spa that was run by Crescent, he reasoned that the assumed name effectively made the Rosewood entities liable as the employers of the defaming defendants alongside Crescent. Id. at *3. We disagreed and held that the assumed-name certificate did not alter who should legally be considered the employer; “[t]he filing of an assumed name certificate does not change the legal relationship between parties.” Id. at *4. Similarly, here, Apache Global’s filing of an assumed-name certificate in the name of Apache Industrial does not change the legal relationship of the parties—namely, who was Olivares’s employer (Apache Global) and who signed the OCIP-related documents (Apache Industrial).¹

Indeed, where one entity’s trade name is also the legal name of another distinct entity, we are hesitant to “conflate[ ]” the two entities. See Steer Wealth Mgmt., LLC v. Denson, 537 S.W.3d 558, 567 (Tex. App.—Houston [1st Dist.] 2017, no pet.). When name confusion muddies the waters in this fashion, this may give rise to factual questions that are fit for resolution by juries rather than appellate jurists. Cf. Morales v. Martin Res., Inc., 183 S.W.3d 469, 473 (Tex. App.—Eastland 2005, no pet.) (op. on reh’g) (holding that name discrepancies created fact issue as to who held a workers’ compensation policy; Martin Resources, Inc. of Odessa asserted that it was covered, but the policy was issued to Martin Resources Management Corporation, and the only policy endorsements were for Martin Resource Management Corporation of Odessa and Martin Resources, Inc. of Kilgore).

We therefore decline Chevron’s request to ignore the corporate forms of the entities with which it chose to contract. This sort of bid to selectively enforce corporate structuring has prompted some courts to erect barriers that prevent parents and subsidiaries from borrowing the defenses available under each other’s workers’ compensation policies. “An injured employee of a subsidiary corporation, who is estopped under an exclusive remedy provision in his state’s workers’ compensation act from suing his employer, may nonetheless bring a third-party claim against the subsidiary’s parent or sibling corporation.” Sims v. W. Waste Indus., 918 S.W.2d 682, 684 (Tex. App.—Beaumont 1996, writ denied) (cleaned up). “We are not persuaded that the legislature ever intended parent corporations, who deliberately chose to establish a subsidiary corporation, to be allowed to assert immunity under the Texas Workers’ Compensation Act by reverse piercing of the corporate veil they themselves established.” Id. at 686. “A corporation cannot be used when it benefits and be disregarded when it is to the advantage of the organizers to do so.” Id. at 685 (cleaned up). Other courts have endorsed this reasoning. See Lenoir v. U.T. Physicians, 491 S.W.3d 68, 88 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (op. on reh’g); Ingalls v. Standard Gypsum, L.L.C., 70 S.W.3d 252, 260–61 (Tex. App.—San Antonio 2001, pet. denied) (op. on reh’g). “One cannot demand differentiation in one context yet benefit from blurred lines in another.” Lenoir, 491 S.W.3d at 88. The rationale for this rule speaks less powerfully here because Chevron is not attempting to bypass the boundaries of its own business, but still the underlying rule stands: in the hard light of corporate separateness, Chevron must live with the agreements it made and not the ones it wishes it had made.

*5 In summary, we conclude as follows. First, a plea to the jurisdiction was not a proper procedural vehicle to decide this case. Second, despite the use of an overlapping trade name, Apache Global is not Apache Industrial. Chevron has not conclusively proved the existence of a written agreement with Olivares’s employer, and thus Chevron has not established that it is Olivares’s deemed employer under the summary-judgment standard. The dismissal based on the exclusive-remedy defense therefore cannot stand.

We sustain Olivares’s first and second issues. This renders it unnecessary to consider his remaining issue, which concerns evidentiary objections that could afford him no greater relief.

III. CONCLUSION

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

Footnotes

Briefly, Chevron also directs our attention to affidavit testimony stating the conclusion that Apache Global was a party to the contract and the application through its assumed name. A conclusory statement is one that does not provide the underlying facts to support the conclusion. Saronikos, Inc. v. City of Dallas, 285 S.W.3d 512, 516 (Tex. App.—Dallas 2009, no pet.). Conclusory statements in affidavits are not competent evidence to support summary judgment because they are not susceptible to being readily controverted. Eberstein v. Hunter, 260 S.W.3d 626, 630 (Tex. App.—Dallas 2008, no pet.). Because this testimony is not competent summary-judgment evidence, it does not establish that Apache Global was a party to the contract and application.

Court of Appeals of Texas, Dallas.

MURPHY OIL USA, INC. D/B/A MURPHY OIL USA #7350, Appellant

DONNETTA STEGALL, Appellee

No. 05-21-00644-CV

Opinion Filed February 22, 2023

On Appeal from the 191st Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-18-08452

Before Justices Partida-Kipness, Pedersen, III, and Nowell

Opinion by Justice Pedersen, III

MEMORANDUM OPINION

BILL PEDERSEN, III JUSTICE

*1 AFFIRMED and Opinion Filed February 22, 2023

Murphy Oil USA, Inc. d/b/a Murphy Oil USA #7350 (Murphy Oil) appeals the trial court’s judgment in favor of appellee Donnetta Stegall on her claim for premises liability. In a single appellate issue, Murphy Oil argues that (a) the Texas Workers’ Compensation Act (the TWCA) bars Stegall’s common law claim and limits her recovery to workers’ compensation benefits; therefore, (b) the trial court erred by denying Murphy Oil’s motion for judgment as a matter of law based on the TWCA’s exclusive remedy provision. We affirm the trial court’s judgment.

Background

Stegall worked as a cashier at Murphy Oil’s store in Balch Springs, Texas. On September 25, 2017, Stegall’s aunt drove her to work and dropped her off in the store’s parking lot, approximately ten minutes before Stegall’s afternoon shift was scheduled to start. On her way across the parking lot, Stegall stepped in a pothole, fell, and seriously injured her ankle. Three men, including her supervisor at the store, helped her into the building, but she was in significant pain and unable to work. She called her aunt to return and to bring her home. Stegall incurred almost $13,000 in medical bills for treatment of her injuries.

Soon after the accident, Stegall initiated a workers’ compensation claim, but she did not send the insurer information necessary to evaluate the claim, and it was denied.

Stegall initially sued Wal-Mart Stores, Inc. on a claim of premises liability.¹ In her first amended petition, she added Murphy Oil as a defendant on the same theory of liability. Approximately one year after Murphy Oil was joined as a defendant, it moved for summary judgment, contending that the exclusive remedy provision of the TWCA precluded Stegall’s common law claim.² Stegall responded, arguing that she was not in the course and scope of her employment when she was injured, so the TWCA did not apply in this case. The trial court denied the motion.³

As trial approached, the parties drew up and filed an Agreed Statement of Facts, which listed the following stipulations:

• On September 25, 2017, while exiting a vehicle, Stegall stepped in a pothole and fell (the Incident).

• As a result of the Incident, Stegall injured both her left and right ankles.

• As a result of the Incident, Stegall sought medical treatment from a number of medical providers and incurred $12,789.01 in medical bills.

• The pothole was located in the parking lot of Murphy Oil’s premises at 12330 Lake June Road, Balch Springs, Texas 75180.

• At the time of the Incident, Stegall was an employee of Murphy Oil.

• At the time of the Incident, Stegall was an invitee on Murphy Oil’s premises.

*2 • At the time of the Incident, Stegall’s manager at Murphy Oil was Nikisha Pye.

• At the time of the Incident, Stegall was arriving to her work shift for the day but had not yet clocked in.

• At the time of the Incident, Murphy Oil subscribed to Worker’s Compensation Insurance through Liberty Mutual Insurance Company (Liberty Mutual).

• On September 29, 2017, Stegall filed a worker’s compensation claim, Claim No. WC949—D46144, with Liberty Mutual for the injuries she allegedly suffered as a result of the Incident.

• On October 20, 2017, Liberty Mutual denied Stegall’s Worker’s Compensation claim on the stated grounds that Stegall had not provided any information or responded to Liberty Mutual’s inquiries from which Liberty Mutual could verify the existence, duration, and extent of Stegall’s disability.

• On November 5, 2018, Stegall filed her First Amended Petition asserting claims against Murphy Oil.

Although the parties did not list it in their Agreed Statement of Facts, they do not dispute that the parking lot on Murphy Oil’s premises is used by both employees and the public.

The trial court presided over the trial without a jury, and each party called one witness. Stegall testified in detail to her injury and the damages she suffered because of it.⁴

After Stegall’s testimony, Murphy Oil moved for judgment as a matter of law, again based upon the TWCA’s exclusive remedy provision. The trial court denied the motion. Murphy Oil then offered testimony from Courtney Shick, a District Manager for Murphy Oil who oversees ten stores, including the store in Balch Springs where Stegall worked. Shick testified that the parking lot where Stegall was injured is part of that store’s premises.

The trial court signed its Final Judgment, awarding Stegall $12,789.01 for past medical expenses, $5,000 for past physical pain and mental anguish, and $2,000 for past physical impairment. Both parties submitted proposed findings of fact and conclusions of law, but the trial court did not sign either set. Neither party filed a Notice of Past Due Findings of Fact and Conclusions of Law pursuant to rule 297 of the Texas Rules of Civil Procedure.

This appeal followed.

Discussion

The fundamental issue before us involves the application of the undisputed facts of this case to the exclusive remedy provision relied upon by Murphy Oil. TEX. LAB. CODE ANN. § 408.001(a). “The proper construction of a statute presents a question of law that we review de novo.” TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 74 (Tex. 2016).⁵

*3 At the outset, the parties agree that—at the time of Stegall’s injury—Murphy Oil was a workers’ compensation subscriber and Stegall was its employee. Murphy Oil argues, therefore, that Stegall’s remedy is limited by the Act’s exclusive remedy provision, which states:

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.

LAB. § 408.001(a).

Stegall argues that her claim does not fall within the purview of section 408.001(a) because she was not in the course and scope of her employment when she was injured.⁶ “Course and scope” is defined by the TWCA to mean:

an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations.

LAB. § 401.011(12). It is undisputed that Stegall had not clocked in and had not yet begun working as a cashier or in any other fashion for the benefit of Murphy Oil at the time of her injury. Accordingly, for the exclusive remedy provision to apply, Stegall’s injury must somehow be brought within the ambit of course and scope, although she had not begun to work.

Murphy Oil argues that Stegall was in the course and scope of her employment because she was on her way to work, traveling across her employer’s parking lot. However, “[t]he general rule, and it is a well settled rule, is that the benefits of the workmen’s compensation statute do not apply to injuries received going to and from work.” Tex. Comp. Ins. Co. v. Matthews, 519 S.W.2d 630, 631 (Tex. 1974). Indeed, the TWCA states specifically that “course and scope” does not include “transportation to and from the place of employment” with limited exceptions that all agree do not apply here.⁷

Murphy Oil relies upon the access doctrine, a common law exception to the going-to-and-from-work exclusion. In Matthews, the supreme court defined the access doctrine to include:

cases [1] in which the employer has evidenced an intention that the particular access route or area be used by the employee in going to and from work, and [2] where such access route or area is so closely related to the employer’s premises as to be fairly treated as a part of the premises.

*4 Id.; see also Turner v. Tex. Employers’ Ins. Ass’n, 715 S.W.2d 52, 53 (Tex. App.—Dallas 1986, writ ref’d n.r.e.).

Murphy Oil cites two cases as authority for its assertion that employers’ parking lots fall within the second prong of the Matthews test, i.e., that parking lots are so closely related to the employer’s premises as to be fairly treated as a part of the premises.⁸ However, the first of its cases, U.S. Fire Insurance Co. v. Deering Management Group, Inc., 946 F. Supp. 1271 (N.D. Tex. 1996), is not a workers’ compensation case. Indeed, the District Court addresses the access doctrine only in hypothetical fashion and concludes that it is unable to determine whether the doctrine should apply at all. Id. at 1282–83. Murphy Oil’s second case, Aetna Life Insurance Co. v. Woods, 449 S.W.2d 86 (Tex. Civ. App.—Fort Worth 1969, writ ref’d n.r.e.), applies the access doctrine when the employee was injured in a parking lot that was fenced, guarded, and maintained “for the convenience of itself, its employees to enable them to park closer to their work, and authorized visitors.” The lot was not an area open to the public. Id. at 87–88. Murphy Oil then argues that the access doctrine should apply as a matter of law, relying upon Bordwine v. Texas Employers’ Insurance Ass’n, 761 S.W.2d 117 (Tex. App.—Houston [14th Dist.] 1988, writ denied), where an employee sustained a fall similar to Stegall’s in her employer’s parking lot. But that opinion makes clear that the “parking lot [was] provided by the employer for the sole use of its employees.” Id. at 120. These cases do not support Murphy Oil’s broad conclusion that injuries suffered on an employer’s parking lot are to be governed in all cases by the access doctrine.

Instead, we are persuaded by Stegall’s argument that a distinction lies between premises—including employers’ parking lots—that are purposefully intended solely for employees’ use in accessing their place of employment and premises that are equally available to the public. The rationale for excluding injuries sustained while going to and from work from the employee’s course and scope is longstanding: “in most instances such an injury is suffered as a consequence of risk and hazards to which all members of the traveling public are subject rather than risk and hazards having to do with and originating in the work or business of the employer.” Kelty v. Travelers Ins. Co., 391 S.W.2d 558, 562 (Tex. Civ. App.—Dallas 1965, writ ref’d n.r.e.). In this case, the Murphy Oil parking lot was used by employees and the public. The pothole that caused Stegall’s injury was a risk or hazard not only to her and other employees, but to all members of the traveling public. Accordingly, Stegall’s injury cannot meet the first prong of the access doctrine test, because the injury did not occur where “the employer has evidenced an intention that the particular access route or area be used by the employee in going to and from work.” See Matthews, 519 S.W.2d at 632 (“no cause has extended the ‘access exception’ out into the public streets where other members of the public are subject to the same hazard”).

*5 We conclude that the access doctrine exception does not apply to this case. Stegall was traveling to work when she was injured; she was not in the course and scope of her employment at that time. Because her injury was not work-related, the exclusive remedy provision of the TWCA does not apply in this case. The trial court did not err in denying Murphy Oil’s motion for judgment as a matter of law. We overrule its single issue.

Conclusion

We affirm the trial court’s judgment.

Footnotes
¹	There is a Wal-Mart store next to the Murphy Oil store; the two stores’ parking lots are separate, but close to one another.
²	See TEX. LAB. CODE ANN. § 408.001(a) (discussed below).
³	Murphy Oil re-urged its motion before trial. Our record does not contain a written ruling on the motion, but the trial court’s docket sheet contains a note stating the motion was denied.
⁴	On cross-examination, Stegall testified that she had received documents from the workers’ compensation insurer. However, she had been told by her attorney not to sign anything, so she forwarded the documents to him.
⁵	Although this case was not technically tried as an “Agreed Case,” see TEX. R. CIV. P. 263, we identify above the parties’ lengthy list of agreed facts, and we have not identified any disputed material facts in the remainder of the record. Accordingly, as in a rule 263 case, “the question on appeal is limited to the correctness of the trial court’s application of the law to the agreed facts.” Patton v. Porterfield, 411 S.W.3d 147, 154 (Tex. App.—Dallas 2013, pet. denied). We review de novo the issue of whether the trial court properly applied the law to the undisputed facts, but we do not review the legal or factual sufficiency of the evidence. See id.
⁶	The term “work-related” is not defined in the statute. However, we know that “only injuries occurring ‘in the course and scope of employment’ are compensable.” Payne v. Galen Hosp. Corp., 28 S.W.3d 15, 17 (Tex. 2000) (citing LAB. § 401.011(10), defining “compensable injury”). Accordingly, we agree with Stegall’s premise that the application of the exclusive remedy defense turns initially on whether she was in the course and scope of her employment at the time she was injured.
⁷	The statute excepts injuries that occur when: (i) the transportation is furnished as a part of the contract of employment or is paid for by the employer; (ii) the means of the transportation are under the control of the employer; or (iii) the employee is directed in the employee’s employment to proceed from one place to another place. LAB. § 401.011(12)(A).
⁸	The evidence established that the parking lot at issue was in fact on Murphy Oil’s premises. However, as Stegall avers, she did not work on the parking lot. The access doctrine applies, even if on the employer’s premises, only when those premises are the employee’s place of work. Turner, 715 S.W.2d at 54.

Court of Appeals of Texas, Dallas.

THE UNIVERSITY OF TEXAS SYSTEM, Appellant

DIANE M. BARTEK, Appellee

No. 05-20-00525-CV

Opinion Filed December 29, 2022

On Appeal from the 101st Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-16-12515

Before Justices Myers, Nowell, and Rosenberg¹

Opinion by Justice Rosenberg

MEMORANDUM OPINION

BARBARA ROSENBERG JUSTICE, ASSIGNED

*1 Reversed and Rendered and Opinion Filed December 29, 2022

This is a worker’s compensation case. After the Texas Department of Insurance (Department²), Division of Worker’s Compensation (Division³) ruled that Diane M. Bartek “did not sustain a compensable injury in the form of an occupational disease” on February 4, 2015, and she “did not have [a] disability during the period beginning August 10, 2015 through April 17, 2016, as a result of the claimed injury,” and the Department’s appeals panel affirmed that ruling, Bartek filed a petition for review in the trial court. After a trial, the jury found Bartek sustained a compensable injury in the form of an occupational disease and that injury was the producing cause of her disability and awarded her attorney’s fees.

The University of Texas System (UT System) appeals the trial court’s final judgment in favor of Bartek and raises two issues on appeal arguing: (1) the evidence is legally and factually insufficient to support the judgment because the expert’s opinion on causation was unreliable and amounts to no evidence; and (2) the trial court erred when it overruled the UT System’s objection to the jury charge on the basis that it applied a definition of “injury” that is contrary to the law. We conclude the testimony of Bartek’s expert was unreliable and is therefore, no evidence. As a result, the evidence is legally insufficient to support the trial court’s judgment. The trial court’s judgment is reversed and a take-nothing judgment is rendered in favor of the UT System.

I. FACTUAL AND PROCEDURAL BACKGROUND

In her original petition, Bartek, an employee of the UT System at the University of Texas at Dallas Police Department, alleged she sustained a compensable injury in the form of an occupational disease on February 4, 2015. And she alleged that she sustained a compensable disability as a result of the occupational disease from August 10, 2015 through April 17, 2016.

On April 14, 2016, a Division benefit review officer held a benefit review conference to mediate the resolution of the disputed claim. However, the parties were unable to reach an agreement.

On June 9, 2016, a Division hearing officer held a contested case hearing and signed a written decision and order on June 15, 2016. In the “discussion” section of the written decision and order, the hearing officer noted, among other things:

• After an ice storm in February 2015 that caused water damage to the police building where Bartek worked, including wet carpet and walls, the area was tested and found to have developed mold;

• “The air in the building was tested on March 17, 2015[,] and found to have elevated levels of Stachybotrys mold spores in several offices... where [Bartek] worked”;

• “[Bartek] and other employees working in the building were relocated on March 18, 2015[,] and the mold [was] cleaned up and remediated by May 21, 2015” and the remediation company reported that “cleaning and remediation had been successfully completed and there was no longer air contamination by mold spores in the building”;

*2 • Maureen McGeehan, M.D., an allergist Bartek had been seeing since October 2010, ordered an immunoassay after Bartek’s mold exposure, which reported that the antigen for Stachybotrys exposure was absent or undetectable in her system on March 20, 2015.

• On April 28, 2015, another test was performed that found elevated levels of trichothecene mycotoxin, group of toxins from multiple genera of fungi, in Bartek’s urine, which “may be associated with exposure to mold, or acquired from foodstuffs in which it is naturally occurring, or from livestock feeds”;

• “[Bartek] admitted she is exposed to livestock feed daily”;

• Bartek provided a causation opinion from William J. Rea, M.D., a specialist in environmental medicine, who is treating Bartek for conditions he relates to “toxic effects of mold exposure,” including diagnoses of “chemical sensitivity, allergic rhinosinusitis, allergic food gastroenteritis, autoimmune nervous system dysfunction, immune deregulation, vasculitis, headache, chronic fatigue, fibromyalgia, [ ] metal sensitivity, [and] toxic encephalopathy”;

• Bartek provided a causation opinion from William Marcus Spurlock, M.D., “who has been treating [Bartek] with vitamin[s] and medications for her complaints” and that Bartek “was continuously exposed to mold for over 5 years resulting in chronic illness”;

• “The opinions [of Dr. Rea and Dr. Spurlock] were not persuasive because they are based on an assumption of continuous exposure to mold at work over a long period of time”;

• “T]he facts show that mold was detected only after flooding in February, 2015[,] with testing on March 17, 2015[,] showing mold spores in the interior air in greater concentrations than the outside air”;

• There was no evidence of direct mold exposure other than to spores in the air and [Bartek] has only claimed inhalation exposure”;

• “The evidence showed that [Bartek] had not developed antigen in her blood for mold exposure, and the presence of tric[h]othecene in [Bartek’s] urine is explained by [Bartek’s] exposure to livestock feed daily at home”;

• Dr. Rea took Bartek off work on August 7, 2015 and did not give her a release to return to work until April 17, 2016;

• Bartek testified that “the reason for the work restrictions before that date was that she felt remediation was not complete” and the UT System “had agreed to do regular mold testing after that”; and

• “The evidence failed to show that [Bartek] was unable to perform her preinjury work during the disability period claimed, but rather that she was taken off to avoid further exposure to mold at work.”

In the “findings of fact” section of the written decision and order, the hearing officer found in part:

3. [Bartek] did not sustain damage or harm to the physical structure of her body in the course and scope of her employment in the form of an occupational disease with a date of injury of February 4, 2015.

4. [Bartek] was not unable to obtain or retain employment at wages equivalent to her preinjury wage due to her claimed injury of February 2, 2015[,] during the period beginning August 10, 2015[,] through April 17, 2016.

In the “conclusions of law” section of the written decision and order, the hearing officer found in part:

3. [Bartek] did not sustain a compensable injury in the form of an occupational disease with a date of injury of February 4, 2015.

*3 4. [Bartek] did not have [a] disability during the period beginning August 10, 2015[,] through April 17, 2016[,] as a result of the claimed injury of February 4, 2015.

Bartek requested review of the hearing officer’s decision and order by the administrative appeals panel. On September 6, 2016, the administrative appeals panel gave notice that the hearing officer’s decision and order were final.

In the trial court, Bartek filed a petition for judicial review of the Department’s decision relating to compensability and benefits eligibility and requested attorney’s fees. In her petition, Bartek complained that the hearing officer’s findings of fact nos. 3–4 and conclusions of law nos. 3–4 were contrary to the preponderance of the evidence. The UT System answered, generally denying the allegations and asserting the affirmative defenses of immunity from suit and immunity from liability as well as maintaining that as an agency or representative of the State, it is not liable for attorney’s fees in Bartek’s action.

Before trial, the UT System moved to exclude the causation testimony of Dr. Rea as unreliable because his opinion was based on erroneous assumptions, i.e., five years of mold exposure, and his methodologies for diagnoses and causation were known to be unsound in the medical and legal communities. The trial court denied the UT System’s motion. Immediately before trial, the UT System renewed its objections to Dr. Rea’s causation opinions, which the trial court overruled. During the trial, Dr. Rea’s deposition testimony was read to the jury. At the close of the UT System’s case, the UT System moved for a directed verdict on the grounds that Bartek had not met her burden of proof, which the trial court denied. A majority of the jury, i.e., ten jurors, returned a verdict in Bartek’s favor, finding that she sustained a compensable injury in the form of an occupational disease and that compensable injury was a producing cause of her disability.

The UT System filed a motion for new trial and a motion for judgment notwithstanding the verdict. Both motions were denied by operation of law.

II. LEGAL SUFFICIENCY OF THE EVIDENCE

In issue one, the UT System argues the evidence is legally and factually insufficient to support the judgment for the reason that the expert’s opinion on general and specific causation was unreliable and amounts to no evidence because: (1) it assumes facts not in the record; (2) it is based on testing methods that have been openly rejected by the scientific and medical communities; and (3) many courts have rejected Dr. Rea’s testimony as to causation as well as his scientifically unsupported diagnoses and methodologies.⁴ Bartek responds that there is ample evidence to support the jury’s verdict because Dr. Rea is Bartek’s treating physician and he is knowledgeable of the facts.

*4 When confronted by both a legal and factual sufficiency challenge, an appellate court must first review the legal sufficiency of the evidence. See Glover v. Texas Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex. 1981). Accordingly, we begin by reviewing the UT System’s argument that the evidence is legally insufficient to support the judgment.

A. Standard of Review

Evidence is legally insufficient to support a jury finding when: (1) the record discloses a complete absence of evidence of a vital fact: (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact: (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). Under a traditional legal sufficiency standard of review, when a party attacks the legal sufficiency of the evidence to support an adverse finding on which it did not have the burden of proof at trial, it must demonstrate there is no evidence to support the adverse finding. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215 (Tex. 2011). In determining whether the evidence is legally sufficient to support a finding, an appellate court considers the evidence in the light most favorable to the judgment and indulges every reasonable inference that would support it. City of Keller, 168 S.W.3d at 822.

When a scientific opinion is not conclusory but the basis offered for it is unreliable, a party who objects may complain that the evidence is legally insufficient to support the judgment. City of San Antonio v. Pollock, 284 S.W.3d 809, 816–17 (Tex. 2009). However, in such a case, if a reviewing court were to consider the evidence in the light most favorable to the verdict, that court should not look beyond the expert’s testimony to determine if it is reliable. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 712 (Tex. 1997). But such an argument is too simplistic because it reduces the no-evidence standard of review to a meaningless exercise of looking to see only what words appear in the transcript of the testimony, not whether there is some evidence. Id. Reliability is determined by looking at numerous factors, therefore, when reviewing whether expert testimony is scientifically unreliable such that it is no evidence, an appellate court necessarily looks beyond what the expert said. Id.

B. Applicable Law

1. Judicial Review of Administrative-Level Workers’ Compensation Decisions

The Texas Workers’ Compensation Act⁵ entitles a subscribing-employer’s employee who sustains a compensable injury to all health care reasonably required by the nature of the injury as and when needed. TEX. LAB. CODE ANN. § 408.021(a). The Texas Workers’ Compensation Act provides for employee compensation for “compensable injuries” which means “an injury that arises out of and in the course and scope of employment for which compensation is payable under [the Act].” LAB. § 401.011(10). It also provides for employee compensation for a “disability” which the Act defines as “the inability because of a compensable injury to obtain and retain employment at wages equivalent to the preinjury wage.” LAB. § 401.011(16). An “occupational disease” is defined as “a disease arising out of and in the course of employment that causes damage or harm to the physical structure of the body.... The term does not include an ordinary disease of life to which the general public is exposed outside of employment, unless that disease is an incident to a compensable injury or occupational disease.” LAB. § 401.011(34).

*5 At the administrative level, disputed claims for benefits proceed through a three-step process: (1) a benefit-review conference; (2) a contested-case hearing; and (3) an administrative appeal. LAB. §§ 410.021–034, 410.151–169, 410.201–.209; Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514, 516 (Tex. 2007). A claimant may appeal the administrative appeals panel’s decision by filing suit in the district court. LAB. § 410.301; Morales, 241 S.W.3d at 516. The decision of the appeals panel is final in the absence of an appeal for judicial review. LAB. § 410.205.

The Texas Workers’ Compensation Act divides judicial review of workers’ compensation appeals into two categories by drawing a distinction between issues that concern compensability and those that do not. LAB. §§ 410.255(a) (all issues other than compensability), 410.301(a) (compensability and benefits eligibility); Morales, 241 S.W.3d at 516. Section 410.301 governs judicial review of administrative-level workers’ compensation decisions regarding compensability or benefits eligibility. LAB. § 410.301; Morales, 241 S.W.3d at 516. The issues of compensability or benefits eligibility that were decided by the administrative appeals panel are tried to the court or to a jury, and the appealing party bears the burden of proof by a preponderance of the evidence.⁶ LAB. §§ 410.302(b) (issues limited), 410.302 (burden of proof); Williams v. City of Richardson, No. 05-20-00085-CV, 2021 WL 3891593, at *2 (Tex. App.—Dallas Aug. 31, 2021, no pet.) (mem. op.). The records of a contested case hearing are admissible in accordance with the Texas Rules of Evidence, and trial is limited to issues decided by the appeals panel and on which judicial review is sought.” LAB. § 410.302; Williams, 2021 WL 3891593, at *2. Further, to the extent there is a conflict between the Texas Workers’ Compensation Act and the Texas Rules of Civil Procedure, the former controls. LAB. § 410.305. However, the fact finder does not simply review the administrative appeals panel decision for reasonableness, but decides the issues independently based on a preponderance of the evidence. Williams, 2021 WL 3891593, at *2.

2. Reliability of Expert Opinion

Expert testimony is required when an issue involves matters beyond jurors’ common understanding. Gharda USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338, 348 (Tex. 2015). However, the testimony of an expert is generally opinion testimony and whether it rises to the level of evidence is determined under the Texas Rules of Evidence, including Rule 702. Havner, 953 S.W.2d at 712.

Texas Rule of Evidence 702 provides that if scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise. TEX. R. EVID. 702. In accordance with Rule 702, expert testimony is admissible if: (1) the expert is qualified, and (2) the testimony is relevant and based on a reliable foundation. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995). Th relevance and reliability requirements of Rule 702 apply to all expert opinions even though the criteria for assessing them must vary depending on the nature of the evidence. Transcontinental Ins. Co. v. Crump, 330 S.W.3d 211, 216–17 (Tex. 2010). A claim will not stand or fall on the mere ipse dixit of a credentialed witness. Gharda, 464 S.W.3d at 349.

*6 There are six useful considerations for determining the reliability of expert testimony, which are sometimes referred to as the Robinson factors:

(1) the extent to which the theory has been or can be tested;

(2) the extent to which the technique relies on the subjective interpretation of the expert;

(3) whether the theory has been subjected to peer review, publication, or both;

(4) the technique’s potential rate of error;

(5) whether the underlying theory or technique has been accepted as valid by the relevant scientific community; and

(6) the non-judicial uses which have been made of the theory or technique.

Transcontinental Ins., 330 S.W.3d at 216 (citing Robinson, 923 S.W.2d at 557). The Robinson factors apply to a no-evidence review of scientific evidence. Havner, 953 S.W.2d at 714.

Whether an expert’s testimony is reliable is based on more than whether the expert’s methodology satisfies the Robinson factors, which are non-exclusive. See Gharda, 464 S.W.3d at 349; Transcontinental Ins., 330 S.W.3d at 216. Further, Rule 702 contemplates a flexible inquiry. Transcontinental Ins., 330 S.W.3d at 216.

An expert’s testimony must not suffer from an analytical gap that renders it unreliable. See Gharda, 464 S.W.3d at 349. Analytical gaps may include circumstances where: (1) the expert improperly applies otherwise sound principles and methodologies, i.e., examining the facts relied on; (2) the expert’s opinion assumed facts that vary materially from the facts in the record, i.e., examining the facts in the record; and (3) the expert’s opinion is based on tests or data that do not support the conclusions reached, i.e., examining the expert’s ultimate opinion. See Gharda, 464 S.W.3d at 348–49. If an expert relies upon unreliable foundational data, any opinion drawn from that data is likewise unreliable. Havner, 953 S.W.2d at 714.

Unreliable expert testimony, including an unsupported expert opinion, is legally no evidence. Seger v. Yorkshire Ins. Co., 503 S.W.3d 388, 410 n.23 (Tex. 2016); see Pollock, 284 S.W.3d at 820.

3. General and Specific Causation

General and specific causation requirements may apply in the context of a workers’ compensation claim. See Texas Workers’ Compensation Ins. Fund v. Lopez, 21 S.W.3d 358, 363–66 (Tex. App.—San Antonio 2000, pet. denied). “Toxic tort” causation must be applied in the workers’ compensation context. See id. (general or specific causation evidentiary requirements used to evaluate expert testimony in toxic exposure workers’ compensation case).

General causation involves whether the substance at issue is capable of causing the injury at issue while specific causation involves whether the substance at issue in fact caused the particular injury at issue. Havner, 953 S.W.2d at 714. However, general causation is never the ultimate issue of causation tried to the finder of fact in exposure cases. Bostic v. Georgia-Pacific Corp., 439 S.W.3d 332, 351 (Tex. 2014).

Specific causation involves whether a substance caused a particular individual’s injury. Havner, 953 S.W.2d at 714. Importantly, when the evidence demonstrates that there are other plausible causes of the injury or conditions that could be negated, the plaintiff must offer evidence excluding those causes with reasonable certainty. See Bustamonte v. Ponte, 529 S.W.3d 447, 456 (Tex. 2017); Havner, 953 S.W.2d at 720.

*7 Expert testimony is particularly necessary in exposure cases, in which medically complex diseases and causal ambiguities compound the need for expert testimony. See Brown v. Rreef Mgmt. Co., No. 05-06-00942-CV, 2007 WL 1829725, at *1 (Tex. App.—Dallas June 27, 2007, pet. denied). Proving one type of causation does not necessarily prove the other, and logic dictates that both are needed for an exposure plaintiff to prevail. See id.

C. Application of the Law to the Facts

First, the UT System argues Dr. Rea’s expert causation opinion was unreliable and amounts to no evidence because it assumes facts not in the record. More particularly, it contends that Dr. Rea’s opinion assumed facts that vary materially from the facts in the record; he relied upon facts not in the record. That is, Dr. Rea’s opinion is based on pure speculation as to the duration of Bartek’s exposure to Stachybotrys mold. Without citation to the record, Bartek maintains “there is ample evidence to support that [her] exposure was for the entire time [Bartek] was employed with [the UT System].”

In Plunkett v. Connecticut Gen. Life Ins. Co., 285 S.W.3d 106 (Tex. App.—Dallas 2009, pet. denied), this Court considered a toxic tort case involving claims for property damage by plaintiff apartment tenants, alleging that all of the personal property of each tenant was contaminated by mold on the landlord’s premises. Id. at 115. The Court looked at the testimony of a toxicologist who opined that all of the plaintiffs’ property was contaminated even though he only tested a small number of items, several years after the exposure, which were not taken from areas where mold was found. Id. The expert “theorized, based on generalized toxicological expertise about the ‘very nature’ of mold, that all residents’ property items must have been contaminated.” Id. at 116. Because there was no scientific foundation for the opinion (i.e., “no actual test data from any source”), this Court concluded that the expert’s opinion constituted no evidence of causation. Id. at 117. There was “no empirical evidence that explain[ed] the validity of his extrapolation ....” Id.

Here, Dr. Rea testified that Bartek gave him a patient history indicating she had been exposed to black mold for five years. He stated that Bartek told him that she began working in a moldy building in 2010. On the health questionnaire that Bartek completed for Dr. Rea, she wrote, in part, “Mold exposure @ work over 5 yrs. Significant health changes during that period.” Consistent with Bartek’s statement, Dr. Rea’s causation letter states that “[Bartek] states that she first moved into a mold[y] [ ] work building in 2010.” However, at trial, Bartek testified she did not notice the mold in her office before February 4, 2015, she did not see mold in her office in March 2010, and she was not aware of any testing before March 2015 that confirmed the presence of mold.

In addition, David Zacharias, the chief of police for the University of Texas at Dallas, testified that he worked in the same building as Bartek since 2009, he had not ever seen mold in the police building before Bartek found mold in her office, he did not receive any reports from employees about mold before Bartek found the mold, he is not aware of the building having been tested for mold prior to March 2015, and he is not aware of anything that would show there was mold in the building for approximately five years duration. Timothy Dorsey, Bartek’s coworker who was responsible for support services, testified that no one reported the presence of mold to him before February 2015, he was surprised to find mold in Bartek’s office, and he was not aware of any mold or moisture problems in that area of the building until February 4, 2015. Further, Gary Gross, M.D., the UT System’s expert testified that he had not seen any evidence supporting that Bartek had been exposed to mold at work for over five years.

*8 If an expert’s opinion is based on certain assumptions about the facts, we cannot disregard evidence showing those assumptions were unfounded. City of Keller, 168 S.W.3d at 813. Dr. Rea’s expert opinion on causation was based on Bartek’s report of continuous exposure to mold at work over a period of approximately five years; it assumed facts that vary materially from the facts in the record. Moreover, there was no scientific basis to validate that opinion. See Plunkett, 285 S.W.3d at 117. As a result, his opinion is drawn from unreliable foundational data. See Havner, 953 S.W.3d at 714 (if expert relies on unreliable foundational data, any opinion drawn from that data is unreliable).

Second, the UT System argues Dr. Rea’s expert causation opinion was unreliable because it is based on testing methods that have been openly rejected by the scientific and medical communities. Essentially, they contend that Dr. Rea’s underlying theory or technique has not been accepted as valid by the relevant scientific community and his opinion is based on tests or data that do not support the conclusions reached. When conducting a no-evidence review, we cannot consider only an expert’s bare opinion, but must also consider contrary evidence showing it has no scientific basis. See Gharda, 464 S.W.3d at 349; City of Keller, 168 S.W.3d at 813.

In his causation report, Dr. Rea diagnosed Bartek with toxic encephalopathy, toxic effect molds and mycotoxins, chemical sensitivity, allergic rhinosinusitis, allergic food gastroenteritis, autonomic nervous system disfunction, immune deregulation, vasculitis, headache, chronic fatigue, fibromyalgia, and metal sensitivity. However, Dr. Gross testified that these medical conditions were not caused by or have never been related to exposure to Stachybotrys mold.

Dr. Rea based these diagnoses on the following medical or laboratory findings: urine mycotoxin; delayed immunity test (DIT); immunoglobin levels; venous blood gas; heart rate variability; posture sway (balance) testing (Romberg test); and intradermal serial dilution provocation or neutralization testing. He concluded that “in all medical probability [Bartek’s] incapacitation [was] a result of her exposure to molds and mycotoxins in the workplace.”

Dr. Rea’s causation report states the urine mycotoxin analysis revealed elevated levels of Trichothecene which is a mycotoxin associated with Stachybotrys. However, Dr. Gross testified that this is not a Federal Drug Administration (FDA) approved test, the Centers for Disease Control and Prevention (CDC) had a report that stated it has not been shown to have any relationship to a disease, and he is not aware of any literature that supports the test. Further Dr. Gross stated the test does not reflect the source of the Trichothecene, which could have also been food, medication, or livestock feed. Dr. Gross testified it is not a test that he “would put any stock in to try to help [him] make a diagnosis.” Further, Bartek admitted she keeps horses and hay or horse feed on her property. And, the evidence does not demonstrate that these other plausible causes of Bartek’s injury or condition were negated, and Bartek was required to offer evidence excluding those causes with reasonable certainty. See Bustamonte, 529 S.W.3d at 456; Havner, 953 S.W.2d at 720.

In his causation report, Dr. Rea stated he conducted a delayed immunity test. However, Dr. Gross testified that this test cannot be used to determine whether someone has an allergy to Stachybotrys mold and one of the things that suppresses delayed immunity is steroids, which Bartek was taking.

*9 Next, Dr. Rea’s causation report states that he tested Barteks’ immunoglobin levels. While Dr. Gross did not have an issue with type of testing, he testified that the testing results actually showed Bartek’s IGA, IgG, and IgM were normal, which indicated that Bartek has a normal functioning immune system. As a result, Dr. Gross was unsure how Dr. Rea could opine that Bartek had immune deregulation.

Also, Dr. Rea conducted a venous blood gas test. However, Dr. Gross testified that this test does not have much utility and is not a test that is commonly done. Although the test is reliable, Dr. Gross stated it is not a functional test and it would not be used to determine whether someone was allergic to Stachybotrys mold.

In his causation report, Dr. Rea concluded that the Heart Rate Variability Test revealed “a dominant sympathetic nervous system.” However, Dr. Gross testified that this is not a valid test for determining whether someone is allergic to Stachybotrys mold and a person’s heart rate varies during the day without exposures.

Dr. Rea concluded in his causation report that “[t]he posturography test documents central and peripheral nervous system dysfunction.” Dr. Gross stated that the Romberg test is a neurological test that reflects whether there is an abnormality in another part of the body, e.g., the spinal system or middle part of the ear. According to Dr. Gross this is not a test that would be used to determine whether someone was having an adverse health effect related to Stachybotrys mold exposure.

Finally, Dr. Rea’s expert report relied on intradermal serial dilution provocation or neutralization testing and concluded “the molds and mycotoxins reproduced [Bartek’s] symptom [that] she was experiencing at work.” However, Dr. Gross testified that studies from a university in California and doctors in Colorado showed that with a high enough concentration, everyone will test positive so the test is not valid. Also, patients who received a placebo had the same incidence of symptoms as the patients injected with the allergen. In addition, Dr. Gross stated that this test is no longer used and would not be a test used for determining whether someone had an allergy to Stachybotrys mold.

Dr. Rea’s expert causation opinion was unreliable because it is based on testing methods that have been openly rejected by the scientific and medical communities. His opinion is based on tests or data that do not support the conclusions reached.

Bartek maintains that Dr. Rea is her treating physician and therefore, “empowered under the Texas Workers’ Compensation Act to provide a causation report.” And as her treating physician, Dr. Rea has knowledge of the facts involved in her work-related injury claim, including specialized reports from her other providers and the various testing agencies. We note that, although Dr. Rea was Bartek’s treating physician, his opinion must meet the same criteria for establishing causation as any other expert. See Feria v. Dynagraphics Co., No. 08-00-00078-CV, 2004 WL 500869, at *4–6 (Tex. App.—El Paso Mar. 15, 2004, pet denied) (mem. op.). It did not.

Therefore, Dr. Rea’s expert opinion suffers from analytical gaps that renders it unreliable. Accordingly, we conclude that Dr. Rea’s expert testimony is legally no evidence.

Bartek submitted the causation letters of Dr. Wm. Marcus Suprlock and Dr. Maureen McGeehan. They were admitted over objection. First, letters written for the purpose of advising as to a doctor’s findings on examination and evaluation of a patient are hearsay. Rollins v. Texas Coll., 515 S.W.3d 364, 368 (Tex. App.—Tyler 2016, pet denied). The trial court erred in admitting them. Moreover, the letters suffered from some of the same deficiencies as Dr. Rea’s testimony. Neither evaluates the medical probability. The Spurlock affidavit was based on the same assumptions as Rea’s testimony. McGeehan does not claim to be an expert. Because Bartek’s workers’ compensation “causation letters” from Drs. Spurlock and McGeehan are inadmissible hearsay without an exception, and because they are not medical opinions given to reasonable medical probability, they are no evidence of causation.

*10 Consequently, we conclude the evidence was legally insufficient to support the trial court’s judgment. The first part of issue one is decided in favor of the UT System.

Based on our resolution of issue one, we need not address the second part of the UT System’s first issue arguing the evidence is factually insufficient to support the judgment or its second issue arguing the trial court erred when it overruled the UT System’s objection to the jury charge on the basis that it applied a definition of “injury” was is contrary to the law.

III. CONCLUSION

We reverse the trial court’s judgment and render a take-nothing judgment in favor of the UT System.

Footnotes
¹	The Hon. Barbara Rosenberg, Justice, Assigned. This case was submitted without oral argument. At the time this case was submitted, Justice Leslie Osborne was a member of the panel. After her resignation, Justice Rosenberg was designated to sit on the panel and participated in the decision of this case. TEX. R. APP. P. 41.1.
²	Section 401.011(13-a) defines “Department” as “the Texas Department of Insurance.” TEX. LAB. CODE ANN. § 401.011(13-a).
³	Section 401.011(16-a) defines “Division” as “the division of workers’ compensation of the [D]epartment.” LAB. § 401.011(16-a).
⁴	The UT System’s survey of the law is correct with some of the courts specifically rejecting or discrediting Dr. Rea’s opinions. E.g., Bradley v. Brown, 42 F.3d 434, 436–39 (7th Cir. 1994), affirming 852 F. Supp. 690 (N.D. Ind. 1994); Coffey v. Cty. of Hennepin, 23 F. Supp. 2d 1081, 1086 (D. Minn. 1998); McCook v. Unum Life Ins. Co. of Am., 463 F. Supp. 3d 729, 737–39 (E.D. La., 2020) (order); Bryant v. Metric Prop. Mgmt., Inc., No. Civ.A. 4:03-CV-212-Y, 2004 WL 1359526, at 7–8 (N.D. Tex. June 17, 2004) (order); Hundley v. Norfolk & W. Ry. Co., No. 91 C 6127, 1995 WL 17826563, at 1 (N.D. Ill. Apr. 3, 1995) (order); Brown v. Rreef Mgmt. Co., No. 05-06-00942-CV, 2007 WL 182975, at 1–2 (Tex. App.—Dallas June 27, 2007, pet. denied) (mem. op.); McNeel v. Union Pac. R.R. Co., 753 N.W.2d 321, 329–332 (Neb. 2008); Myhre v. N.D. Workers Comp. Bureau, 653 N.W.2d 705, 710–713 (N.D. 2002); Jones v. Riskin Mfg.*, 834 So.2d 1126 (La. Ct. App. 2002). However, while it is informative, these decisions are not determinative of our analysis.
⁵	Section 401.001 of the Texas Labor Code provides that title 5, subtitle A, may be cited as the “Texas Workers’ Compensation Act.” LAB. § 401.001.
⁶	We note that all issues other than compensability or benefits eligibility are reviewed under the substantial evidence rule. LAB. § 410.255(b); Williams, 2021 WL 3891593, at *2.

Court of Appeals of Texas, Dallas.

KENNETH HENRY, Appellant

MARC A. NOTZON AND LAW OFFICE OF MARC A. NOTZON, P.C., Appellees

No. 05-20-00994-CV

Opinion Filed December 22, 2022

On Appeal from the 191st Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-19-13449

Before Justices Schenck, Molberg, and Pedersen, III

Opinion by Justice Pedersen, III

Molberg, J., dissenting.

MEMORANDUM OPINION

BILL PEDERSEN, III JUSTICE

*1 AFFIRMED and Opinion Filed December 22, 2022

Appellant Kenneth Henry sued appellees Marc A. Notzon and the Law Offices of Marc A. Notzon, P.C. (together, Notzon) claiming a breach of fiduciary duty. The trial court granted summary judgment in favor of Notzon based on collateral estoppel. In two appellate issues, Henry argues the trial court erroneously granted summary judgment and erroneously denied Henry’s motions to compel certain discovery by Notzon. We affirm the trial court’s judgment.

Background

On May 29, 2015, Henry was driving a truck for his long-time employer, Time Warner Cable (TWC). As a Maintenance Technician, Henry was assigned a company truck to drive to commercial and residential locations to install and repair cable services. Henry ran a red light and hit another vehicle; Henry and the three people in the other vehicle were seriously injured, and both vehicles were totaled. That accident touched off a series of business and legal proceedings, culminating with this case now on appeal.

Henry’s Termination

Well before the 2015 accident, TWC learned that Henry had been diagnosed with insulin-dependent diabetes mellitus. On the day of the accident, a co-worker raised a question about Henry’s behavior, claiming Henry was acting “weird and combative.” Concern was expressed about Henry’s blood sugar, and a supervisor was notified. For part of the day, Henry rode in a truck with the supervisor. Eventually he “was put back in his company truck and told to go home.” That was when the accident occurred. Henry’s injuries included broken vertebrae.

Just days after the accident, Notzon undertook representation of both Henry and TWC in regard to the accident; Notzon had represented TWC for many years. Notzon called Henry, requesting a list of his medications. Henry took his medications to TWC, where he met with Notzon and a number of TWC employees. The group discussed Henry’s diabetes, his medications, and the accident. Days after that meeting, according to Henry, an Accident Review Committee (ARC) conducted a review of the accident.¹ Notzon and a number of TWC representatives attended the proceeding.

Henry continued to be treated for his injuries. He filed a worker’s compensation claim and was released to return to work on September 7, 2015. Shortly thereafter, according to TWC and Notzon, an ARC was held. (A TWC representative testified that these committees typically review an accident within seven days, but this one was delayed because of Henry’s leave of absence.) Henry learned that Notzon had spoken with TWC representatives before and after that proceeding. Notzon contends he spoke with Henry then as well and advised him “to say very little to avoid criminal prosecution.” Henry denies that Notzon spoke to him at all concerning the proceeding, and Henry denies attending the proceeding. Indeed, Henry questions whether a September ARC actually occurred. According to TWC, the ARC determined that Henry’s accident had been avoidable.

*2 On October 2, 2015, Henry’s employment was terminated. TWC asserted that Henry was fired because he was responsible for a severe, avoidable accident.

The Ward Lawsuit

Both Henry and TWC were sued by the three people in the vehicle struck by Henry.² Notzon represented both defendants throughout the suit, and he eventually negotiated settlements with all three plaintiffs. Documents indicate that Notzon’s representation of Henry was paid for by ESIS, Inc., the entity that administered Henry’s worker’s compensation claim.

Henry v. TWC

Henry sued TWC for wrongful termination in federal court. He claimed that TWC discriminated against him because of his disability, i.e., his diabetes. He also alleged that TWC fired him in retaliation for his filing a worker’s compensation claim. In a summary judgment proceeding discussed in more detail below, the trial court concluded that Henry was unable to prove either of his claims because the summary judgment evidence established that TWC fired him for causing a severe, avoidable accident. Henry appealed the trial court’s decision to the Fifth Circuit Court of Appeals; that court affirmed the judgment for TWC.

Henry v. Notzon

Henry filed this lawsuit against Notzon in August 2019. He contends that Notzon breached the fiduciary duty he owed Henry while representing him. Specifically, Henry charges that Notzon gave TWC information at the time of the September ARC that resulted in TWC’s terminating Henry. Notzon did not disclose to Henry that he was meeting with TWC, and he refused to disclose anything he had told TWC about Henry. Henry complains further that Notzon has misrepresented facts surrounding his role in the termination, including the contention that there was an ARC on September 25, 2015, and that he warned Henry to say little to avoid criminal charges. Henry contends that Notzon was involved in the decision to fire Henry, to “orchestrate” the September ARC so that it would appear the accident was solely the fault of Henry, and to exculpate TWC for its own gross negligence in allowing Henry to drive. Henry pleaded that these violations of Notzon’s duty caused TWC to terminate Henry’s employment, and he alleges that he suffered not only a loss of employment-related benefits, but also actual and exemplary damages as a result.

Notzon filed a traditional motion for summary judgment, arguing that Henry was unable to prove that any breach of duty by Notzon was the cause of his termination and the damages that flowed from that termination. Notzon asserted that the cause of Henry’s termination had been determined in the federal lawsuit: TWC fired him because he caused a severe, avoidable accident. Notzon argued that the doctrine of collateral estoppel, thus, barred relitigation of the causation issue. The trial court granted Notzon’s motion.

As the case proceeded below, Henry pressed for discovery of a number of documents that Notzon contended were privileged based on his attorney-client relationship with TWC. The trial court denied Henry’s motions to compel production of the documents.

*3 Henry’s appeal in this Court challenges the trial court’s grant of summary judgment and its denial of his motions to compel.

Summary Judgment Based on Collateral Estoppel

The affirmative defense of collateral estoppel—sometimes called issue preclusion—bars the successive litigation of an issue of fact or of law that was actually litigated and resolved in a valid court determination essential to the prior judgment. Taylor v. Sturgell, 553 U.S. 880, 892 (2008). In his first issue, Henry argues that the trial court erred by granting Notzon’s motion for summary judgment based on collateral estoppel.³ This defense is designed to “promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues.” Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994).

Henry v. TWC: The First Motion for Summary Judgment

Henry’s federal court wrongful termination suit was predicated on two legal theories: discrimination based on his disability and retaliation for his filing a worker’s compensation claim. TWC filed a motion for summary judgment seeking to show (1) that Henry could not prove either discrimination or retaliation, and (2) that the summary judgment evidence actually proved a different reason for Henry’s termination, i.e., the fact that he had caused a severe, avoidable accident. The Honorable Judge David Godbey issued a Memorandum Opinion, granting TWC’s motion. Henry v. Spectrum LLC, No. 3: 18-CV-01 086-N (N.D. Tex. March 3, 2019) (Henry I).

The court applied the burden-shifting test from McDonnell Douglas Corporation v. Green, 411 U.S. 792 (1973) in evaluating this claim. It concluded that even if all inferences were drawn in favor of Henry to conclude that he made a prima facie showing of discrimination, TWC had articulated a legitimate, nondiscriminatory reason to terminate Henry’s employment, and Henry had failed to show that a reasonable jury could conclude that TWC’s reasons for terminating Henry were mere pretext. Henry I at 6–7.⁴ Ultimately, the court concluded:

In sum, Henry cannot show either direct or circumstantial evidence of disability discrimination. That the parties dispute whether Henry’s diabetes was in fact the cause of the accident is irrelevant. Time Warner alleges that Henry’s condition was never a factor in its decision, and Henry produces no evidence to create a reasonable inference that it was. The Court thus grants summary judgment to Time Warner as to Henry’s ADA discrimination claim.

Id. at 7.

*4 The opinion goes on to assert that, if he was to survive summary judgment on his workers’ compensation retaliation claim, “Henry must show that ‘the employer’s action would not have occurred when it did had the employee’s protected conduct filing workers’ compensation claim not occurred.’ ” Id. at 8 (citing Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2006)). But the court concluded: “In short, [Henry] has not given the Court any evidence suggesting that he would have been treated differently but for his decision to file for workers’ compensation.” Henry I at 9.

Having concluded that TWC’s stated reason for terminating Henry’s opinion was not a pretext and that Henry had provided no evidence that the termination would not have occurred when it did if he had not filed his workers’ compensation claim, Judge Godbey granted TWC’s summary judgment motion and dismissed Henry’s suit for wrongful discharge. Id.

Henry appealed, and the Fifth Circuit affirmed. See Henry v. Spectrum, L.L.C., No. 19-10452 (5^th Cir. 20119) (per curiam, not designated for publication). As to Henry’s claim for discharge based on his disability, the court stated:

To succeed, Henry needed to create a fact issue about Time Warner’s motive in firing him. The company’s safety policy explicitly allowed for immediate termination for severe accidents. The undisputed facts indicate that is what happened here.

Id. at 4 (interior citation omitted). And when reviewing Henry’s retaliation claim, the court agreed with the trial court that Henry failed to establish causation. It concluded that there was “nothing in the record” supporting a conclusion that Henry would have been treated differently but for his filing for workers’ compensation. Id. at 6.

Thus, the Fifth Circuit affirmed that Henry was unable to establish that his termination was caused by discrimination or retaliation. Instead, the termination was caused by TWC’s conclusion that Henry had caused a severe, avoidable accident.

Henry v. Notzon: The Second Summary Judgment Motion

In this lawsuit, Henry alleges a breach of Notzon’s fiduciary duty, tied primarily to Notzon’s undisclosed meetings and communications with TWC which, Henry contends, caused TWC to fire him. To prevail on a breach of fiduciary duty claim, a plaintiff must prove three elements: the existence of a fiduciary duty, a breach of the duty, and damages caused by the breach. Las Colinas Obstetrics-Gynecology-Infertility Ass’n, P.A. v. Villalba, 324 S.W.3d 634, 645 (Tex. App.—Dallas 2010, no pet.).

Notzon’s traditional summary judgment motion raised the affirmative defense of collateral estoppel. He argued that the issue of causation of damages had been conclusively determined against Henry in the federal lawsuit. Judge Godbey’s opinion, affirmed by the Fifth Circuit, determined that the actual (i.e., not pretextual) reason for Henry’s termination was TWC’s good faith belief that Henry had caused a severe, avoidable accident. Thus, Notzon argues, Henry is precluded in this lawsuit from arguing that it was Notzon’s betrayal that caused the termination and damages that flowed from it. See, e.g., Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 521 (Tex. 1998) (“If a cause of action in the second lawsuit involves an element already decided in the first lawsuit, that cause of action is barred.”).

The trial court granted Notzon’s motion, and Henry appeals that order. The application of collateral estoppel is a legal question that we review de novo. See In re J.A.C., No. 05-17-00768-CV, 2018 WL 2191604, at *3 (Tex. App.—Dallas May14, 2018, no pet.) (mem. op.).

The Requirements of Collateral Estoppel

*5 A party attempting to establish that a claim is barred by collateral estoppel must prove: (1) that the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) that those facts were essential to the judgment in the first action; and (3) that the party against whom the doctrine is asserted was a party in the first action. See Trapnell, 890 S.W.2d at 801. In this case, it is undisputed that Henry was a party to his suit for wrongful discharge against TWC and that he is bound by its judgment. Accordingly, we discuss in detail only the first two collateral estoppel requirements.

(1) Relitigation of the same facts

Notzon’s motion for summary judgment argued that the cause of Henry’s termination from TWC was fully and fairly litigated in the TWC case. To determine whether facts were fully and fairly litigated in the first suit, we consider whether the parties were fully heard, whether the court supported its decision with a reasoned opinion, and whether the decision was subject to appeal or was in fact reviewed on appeal. Webb v. Diversegy, LLC, No. 05-17-01258-CV, 2019 WL 1146707, at *4 (Tex. App.—Dallas Mar. 13, 2019, pet. denied) (mem. op.).

Our review of the summary judgment proceedings in federal court indicate that the parties were fully heard. TWC’s summary judgment motion addressed both of Henry’s claims. TWC established first that—even if Henry could establish a prima facie case of discrimination based on a disability—it had an articulable, non-discriminatory reason to terminate Henry’s employment, namely Henry’s causing a severe, avoidable accident. Henry responded to the motion, but he offered no evidence that the reason articulated by TWC was pretextual. Similarly, Henry was unable to offer any evidence that he would not have been terminated when he was if he had not filed a worker’s compensation claim.

Judge Godbey addressed each of Henry’s attempts to defeat TWC’s motion, but he rejected the evidence offered by Henry as irrelevant or insubstantial. The opinion relies on the summary judgment record and settled law. We conclude that the Henry I opinion is well reasoned. That conclusion is supported by the fact that the Fifth Circuit affirmed not only Judge Godbey’s disposition of the case, but also his rationalization, stating:

Id. at 4.

Henry disputes that this case turns on facts litigated in the federal case. He argues that because Notzon’s ethical breaches were hidden at the time of the federal proceeding, the breach of his fiduciary duty to Henry could not have been litigated then. This argument appears to misunderstand the nature of collateral estoppel. To the extent Henry is focused on his tort claim for breach of fiduciary duty, we stress that collateral estoppel does not operate to preclude claims; instead, it precludes relitigation of specific facts or issues. See Trapnell, 890 S.W.2d at 801.⁵ For that reason, collateral estoppel can apply in two cases based on different claims, so long as the issue determined in the first case appears in the second case as well. See Webb, 2019 WL 1146707, at *4 (“Collateral estoppel prevents relitigation of issues resolved in a prior suit, even if the issue recurs in the context of a different claim.”). Here, Notzon contends that a specific factual issue—the cause of Henry’s termination—has already been legally determined, and, therefore, its relitigation is precluded. Notzon’s defense is not defeated because the cause of Henry’s termination was determined in a lawsuit that urged different claims.

*6 We conclude that the cause of Henry’s termination was fully and fairly litigated in federal court. In that proceeding “the undisputed facts” established that he was fired by TWC because he caused the severe, avoidable accident that injured himself and others.

(2) Proof of causation was essential to the first judgment

To determine whether a fact issue is essential to the judgment, we look to the factual determinations that were necessary to form the basis of the first judgment. Tarter v. Metro. Sav. & Loan Ass’n, 744 S.W.2d 926, 928 (Tex. 1988). Henry’s brief acknowledges that causation was an essential element of both bases of his wrongful discharge claim:

In the prior case, the essential elements Henry sought to prove under the Americans Disabilities Act were: (1) he has a disability or was regarded as disabled; (2) he was qualified for the job; and (3) he was subject to an adverse employment decision because of his disability.

Nall v. BNSF Ry. Co., 917 F.3d 335, 341 (5th Cir. 2019) (emphasis added).

With respect to the workers’ compensation retaliation claim, Henry sought to prove: that (1) he, in good faith, filed a workers’ compensation claim; (2) he suffered an adverse employment action; and (3) there is a causal link between the two, i.e., that the filing of the claim was a “determining factor” in his discharge.

Continental Coffee Products Co. v. Cazares, 937 S.W.2d 444 (Tex. 1996) (emphasis added).

Importantly, Henry has claimed the same injury in both lawsuits: termination of his employment. In addition, Henry has claimed the same damages flowing from that termination: past and future lost earnings and employee benefits; compensatory damages, including mental anguish and other nonpecuniary losses; and exemplary damages.⁶ In both lawsuits, thus, Henry was required to prove that the defendant’s tortious conduct caused his termination and those damages. The question raised, then, is whether Henry can prove that Notzon’s conduct, however reprehensible it may have been, caused TWC to fire Henry, because the federal courts have concluded that the cause of his termination was actually the severe, avoidable accident that he caused.

Henry contends that collateral estoppel cannot apply because Notzon’s duties and responsibilities to Henry were never decided in any fashion in the federal suit. In effect, Henry argues that because his attorney’s disloyal conduct—the breach element of Henry’s breach of fiduciary duty claim—was not an element of his prior claims against TWC, the factual issues litigated in the wrongful termination case can have no preclusive effect in this case. We have already confirmed that the claims in two lawsuits need not be identical for collateral estoppel to apply. See Webb, 2019 WL 1146707, at *4. It follows necessarily that all of the essential elements of the claims urged in the two actions need not be identical. It is sufficient to invoke the doctrine of collateral estoppel if one essential element, proven in the first action, is also necessary to the second. See State & Cnty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001) (“The issue decided in the prior action must be identical to the issue in the pending action.”).

*7 Finally, if Henry’s argument directed at proof of the element of breach is a challenge to the sufficiency of Notzon’s summary judgment motion, we must reject it as well. A defendant may prevail on summary judgment if he establishes as a matter of law that the plaintiff-movant cannot establish one element of his cause of action. See Wilbert Family Ltd. P’ship v. Dallas Area Rapid Transit, 371 S.W.3d 506, 510 (Tex. App.—Dallas 2012, pet. dism’d). Texas law does not require the defendant to disprove every element of the plaintiff’s claim.

We are not unsympathetic to Henry’s contentions concerning his attorney’s conduct. An attorney owes a fiduciary duty of loyalty to his client throughout the course of the representation. Gillis v. Provost & Umphrey Law Firm, LLP, No. 05-13-00892-CV, 2015 WL 170240, at *10 (Tex. App.—Dallas Jan. 14, 2015, no pet.). The existence of a joint representation does not somehow diminish that duty. But this is not a case in which we are charged with adjudging the sufficiency of a jury’s findings concerning an attorney’s violation of his duties. We can only determine the issue before us: whether the trial court erred in granting Notzon’s motion for summary judgment on the ground that Henry is collaterally estopped from proving that Notzon’s breach was the cause of his termination.

Causation is an essential element in a client’s claim seeking actual damages as a remedy for his breach of fiduciary duty claim. Rogers v. Zanetti, 517 S.W.3d 123, 136 (Tex. App.—Dallas 2015), aff’d, 518 S.W.3d 394 (Tex. 2017). It was also an essential element in Henry’s wrongful termination claims. See Nall v. BNSF Ry. Co., 917 F.3d 335, 341 (5th Cir. 2019); Continental Coffee Products Co. v. Cazares, 937 S.W.2d 444 (Tex. 1996). And the injury allegedly caused in both cases is identical. Accordingly, we conclude the trial court appropriately applied the doctrine of collateral estoppel in this case.

The Equitable Exception for Proof of Causation

Henry contends that, even if he cannot prove causation, his claim should survive. He relies upon the case of First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214 (Tex. 2017). In that case, the church alleged that one of its lawyers, Mr. Parker, had breached his fiduciary duty to inform the church when he learned that another lawyer had stolen over a million dollars of the church’s money that was being held in the law firm’s trust account. Id. at 217—18. The court of appeals had affirmed the trial court’s summary judgment in favor of Parker, concluding that Parker’s conduct had not caused the church’s loss. Id. at 219. In the supreme court, the church argued—as Henry does here—that it did not have to prove causation in a breach of fiduciary case. Id. at 220. The supreme court reviewed its earlier decisions in Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (1942), in which a disloyal agent was forced to return his “secret commission,” and Burrow v. Arce,. 997 S.W.2d 229, 240 (Tex. 1999), in which attorneys who breached fiduciary duties to their clients were forced to return their fees to those clients. Id. at 220—21. Then the supreme court delivered this succinct statement of the rule concerning when proof of causation is and is not required in a breach of fiduciary duty case:

In neither of those cases did we hold that a client need not prove that a breach of fiduciary duty caused actual damages if a client is claiming such damages. Plainly put, for the church to have defeated a no-evidence motion for summary judgment as to a claim for actual damages, the church must have provided evidence that Parker’s actions were causally related to the loss of its money. It did not do so. On the other hand, the church was not required to show causation and actual damages as to any equitable remedies it sought.

*8 Id. at 221.

It is not entirely clear what Henry hopes to recover at this point in his lawsuit. As we discussed above, he pleaded entitlement to actual and exemplary damages. At one point in his appellate brief, Henry states that he “only seeks equity,” and Henry did request fee forfeiture in this case. But in his reply brief, Henry reasserts that he “is entitled to equity, compensatory damages, and potentially exemplary damages.”

Based upon the Parker rule quoted above, we conclude that Henry is not entitled to actual damages because he has failed to prove that Notzon’s conduct caused such damages. See id. Moreover, Texas law forbids recovery of exemplary damages in the absence of an award of actual damages. TEX. CIV. PRAC. & REM. CODE ANN. § 41.004(a).

The Parker rule allows a client to force his unfaithful lawyer to forfeit his fees, even in the absence of proof of causation. But Henry did not pay Notzon’s fees; TWC’s worker’s compensation administrator paid them. Henry asserts without citation that “whether Henry paid fees is irrelevant. His lawyer deceived him.” But Texas law does not allow disgorgement of amounts not paid by the client. Liberty Mut. Ins. Co. v. Gardere & Wynne, L.L.P., 82 Fed. Appx. 116, 118 (5th Cir. 2003).

We conclude the trial court did not err by granting summary judgment in Notzon’s favor. We overrule Henry’s first issue.

Denial of Henry’s Motions to Compel

In his second issue, Henry argues that the trial court erroneously denied his motion to compel production of Notzon’s file (specifically including all of the documents identified in Notzon’s privilege log and a calendar used to refresh Notzon’s recollection in proceedings below) and refused to compel Notzon to answer all questions regarding his secret meetings with TWC. The materials sought by Henry through his motions to compel may be relevant to the breach element of his breach of fiduciary duty claim. However, our resolution of Henry’s first issue renders these discovery matters moot.

We need not address the substance of Henry’s second issue.

Conclusion

We affirm the trial court’s judgment.

Footnotes
¹	In our record, the acronym ARC is sometimes used to refer to the committee and sometimes used to refer to the committee’s procedure for reviewing an accident.
²	The lawsuit was styled Wanda Adaway and Anethra Ward, Individually and as Next Friend of Ladaysha Robinson, a Minor v. Time Warner Cable Texas, LLC and Kenneth Raynard Henry; it was filed in the same court as this suit, the 191st District Court of Dallas County.
³	Although the parties initially briefed additional issues in the trial court, they have agreed that only the issue of collateral estoppel could support the trial court’s summary judgment.
⁴	The opinion considered and rejected both of Henry’s arguments concerning pretext: that TWC gave inconsistent explanations regarding his termination and that TWC departed from its disciplinary policy in terminating him. The court concluded that Henry may have identified conflicting evidence about issues such as timing or personnel involved, there was no conflicting evidence about why he was fired. Id. at 6—7. And although Henry argued that company policy called for progressive punishment, the court pointed out that the policy provided that severity of an accident can accelerate punishment up to and including termination. Id. at 7.
⁵	To the extent Henry is focused upon a failure to prove the element of breach within his breach of fiduciary claim, we address that concern below.
⁶	The single addition to Henry’s demand in this action is the equitable remedy of fee forfeiture, which we address in the next section of this opinion.

Court of Appeals of Texas, Dallas.

Deloris PHILLIPS, Appellant

TEXAS DEPARTMENT OF INSURANCE DIVISION OF WORKERS’ COMPENSATION, Fleming Foods, Inc., Core-Mark Holding Co., the Raymond Corp., Cigna Insurance Co., Bankers Standard Insurance Co., ESIS-Chubb Management Corp., Liberty Mutual Insurance Co., United Parcel Service, Inc., Teamsters Local Union 767, City of Dallas Municipality, Dallas County Municipality, and Dallas Police Department, Appellees

No. 05-22-00610-CV

Opinion Filed July 8, 2022

On Appeal from the 101st Judicial District Court, Dallas County, Texas, Trial Court Cause No. DC-21-06299

Attorneys & Firms

James Anthony Person III, Dennis M. McKinney, for Appellee Texas Department of Insurance Division of Workers Compensation, et al.

Todd Keith Sellars, for Appellee Dallas County Municipality.

Devin Q. Alexander, Tatia R. Wilson, for Appellee City of Dallas Municipality.

Jamie King Harrison, James Roddy Tanner, for Appellee Teamsters Local Union 767.

John V. Jansonius, for Appellee United Parcel Service, Inc.

Deloris Phillips, Pro Se.

David L. Brenner, Robert Reginald Graves Jr., for Appellee Bankers Standard Insurance.

Chalon N. Clark, Francis H. LoCoco, for Appellee Raymond Forklift Trucks.

Christopher M. Losey, for Appellee Liberty Mutual Insurance.

Before Chief Justice Burns, Justice Goldstein, and Justice Smith

MEMORANDUM OPINION

Opinion by Chief Justice Burns

*1 Before the Court is appellant’s petition for permissive appeal. The petition fails to meet each requirement set forth in Texas Rule of Appellate Procedure 28.3(a), (e). Accordingly, we deny the petition and dismiss the appeal for want of jurisdiction. See id.; 42.3(a); Draper v. Guernsey, No. 03-15-00741-CV, 2016 WL 462763, at *2 (Tex. App.—Austin Feb. 3, 2016, pet. denied) (mem. op.) (dismissing appeal for want of jurisdiction because appellant failed to obtain trial court order granting permission to pursue permissive appeal of interlocutory order).

Court of Appeals of Texas, Dallas.

Phyllis LEE, Appellant

GRAND PRAIRIE INDEPENDENT SCHOOL DISTRICT, Appellee

No. 05-22-00338-CV

Opinion Filed June 7, 2022

On Appeal from the 95th District Court, Dallas County, Texas, Trial Court Cause No. DC-21-18237

Attorneys & Firms

Phyllis Lee, Pro Se.

Timothy R. White Jr., for Appellee.

Before Justices Partida-Kipness, Pedersen, III, and Nowell

MEMORANDUM OPINION

Opinion by Justice Nowell

*1 In the underlying lawsuit, appellant seeks judicial review of the decision and order of the Texas Department of Insurance, Division of Workers’ Compensation. She appeals from the trial court’s March 25, 2022 interlocutory order granting appellee’s motion to transfer venue and transferring the case to Travis County. Because the interlocutory order did not appear to be subject to appeal, we questioned our jurisdiction and directed the parties to file letter briefs addressing the issue. The parties complied.

Generally, this Court has jurisdiction over final judgments and certain interlocutory orders as permitted by statute. See TEX. CIV. PRAC. & REM. CODE § 51.014(a) (listing appealable interlocutory orders); Lehmann v. Har–Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A trial court’s venue determination is not subject to an interlocutory appeal. See TEX. CIV. PRAC. & REM. CODE § 15.064(a); TEX. R. CIV. P. 87(6).

In her letter brief, appellant asserts the trial court may permit an appeal of an order that is not otherwise appealable. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d). Appellant is correct, but the record before us does not contain a written order permitting an appeal of the venue order. See TEX. R. CIV. P. 168. In the remainder of appellant’s letter brief, she addresses the merits of the trial court’s action transferring venue.

The trial court’s interlocutory venue order is not subject to interlocutory appeal. See TEX. CIV. PRAC. & REM. CODE § 15.064(a); TEX. R. CIV. P. 87(6). Because appellant has failed to demonstrate that we have jurisdiction, we dismiss the appeal. See TEX. R. APP. P. 42.3(a).

Court of Appeals of Texas, Dallas.

CORBY W. STEVENSON, Appellant

TEXAS MUTUAL INSURANCE COMPANY, Appellee

No. 05-21-00464-CV

Opinion Filed May 13, 2022

On Appeal from the 354th Judicial District Court

Hunt County, Texas

Trial Court Cause No. 82551

Before Justices Myers, Osborne, and Nowell

Opinion by Justice Nowell

MEMORANDUM OPINION

ERIN A. NOWELL JUSTICE

Affirmed and Opinion Filed May 13, 2022

Corby W. Stevenson appeals the trial court’s order denying his motion to apportion settlement proceeds and granting Texas Mutual Insurance Company’s cross-motion for apportionment. In a single issue, Stevenson argues the trial court failed to properly apportion settlement proceeds pursuant to the Texas Labor Code. We reverse the trial court’s order in part and remand for the trial court to calculate Texas Mutual’s proportionate share of expenses.

FACTUAL BACKGROUND

Stevenson suffered a workplace injury in June 2013, which was exacerbated by negligent medical treatment he received on December 23, 2013. Texas Mutual, the workers’ compensation carrier for Stevenson’s employer, paid workers’ compensation benefits to and on behalf of Stevenson for his injuries. In January 2015, Stevenson sued his health care providers for negligence.

On April 29, 2016, Texas Mutual sent a letter to Stevenson’s counsel stating:

Texas Mutual Insurance Company is the workers’ compensation carrier for Corby Stevenson’s 06/30/2013 accident. Our investigation reveals that your client may be pursuing a claim for damages against the liable third party or parties.

Because of the accident, to date we have paid $253,665.95 in workers’ compensation benefits to and on behalf of your client. This amount, which is our subrogation lien, may continue to increase. Chapter 417 of the Texas Labor Code gives us a statutory subrogation right to step in the shoes of your client to obtain reimbursement of the benefits we have paid. This letter is notice of our subrogation lien and intent to subrogate.

In case of settlement or judgment, we have a legal right to receive reimbursement before your client receives any money.

On December 29, 2016, Texas Mutual sent another letter to Stevenson’s counsel stating:

To date, Texas Mutual Insurance Company (Texas Mutual) has paid $307,546.67 on behalf of Corby Stevenson. Attached is an itemized abstract detailing the medical and indemnity paid to date. The total amount of the workers’ compensation lien from June 30, 2013 through December 23, 2013 is $27,519.40.

Our lien is not final. Please contact me before settlement for an updated lien amount.

Texas Mutual sent similar letters to Stevenson’s counsel on July 21, 2017, stating Texas Mutual had paid $318,092.46 on Stevenson’s behalf to date and again on January 22, 2018 stating it had paid $318,551.33 to date. Each letter advised that the total amount of the workers’ compensation lien from June 30, 2013 through December 23, 2013 was $27,519.40.

Stevenson settled his medical negligence case on January 25, 2018, for $270,000.

On February 1, 2018, Texas Mutual sent another letter to Stevenson’s counsel stating:

In my previous correspondence with you, I indicated the total amount we had paid on the claim and also indicated the amounts paid prior to the cast being applied too tightly on December 23, 2013, which was the basis of the lawsuit you filed on behalf of Mr. Stevenson. My letters stated very clearly that the $27,519.40 was what we paid from the date of the original injury until December 23, 2013, which was the period before the cast was applied too tightly. As of today, the total paid is $318,551.33 less $27,519.40 = $291,031.93 which is the amount of our lien attributable to the medical malpractice.

Texas Mutual then filed its original petition in intervention to recover its “subrogation lien for medical and indemnity benefits of $318,551.33 paid to and on behalf of” Stevenson. In response, Stevenson filed a motion for apportionment and requested the trial court limit Texas Mutual’s recovery to $27,519.40 before deductions for attorney’s fees and expenses. Texas Mutual responded with its own motion for apportionment in which it proposed the apportionment of settlement funds could be proper pursuant to labor code section 417.003(a), which would reduce its recovery to pay attorney’s fees and expenses to Stevenson’s counsel.

Following a hearing, the trial court entered an order denying Stevenson’s motion for apportionment and granting Texas Mutual’s cross-motion for apportionment. The trial court found: Texas Mutual’s subrogation interest is $291,031.93; Texas Mutual is entitled to first-money recovery of its subrogation interest from Stevenson’s medical malpractice settlement; Texas Mutual’s subrogation interest exceeds the value of the medical malpractice settlement; Texas Mutual is entitled to recover $270,000 to satisfy its subrogation interest; and Stevenson’s counsel is entitled to receive no more than one-third of Texas Mutual’s subrogation recovery in attorney’s fees. Therefore, the trial court found: “Pursuant to Texas Labor Code 417.003(c), Intervenor Texas Mutual Insurance Company’s subrogation recovery out of the $270,000 settlement is: $270,000 less a maximum attorney fee of $90,000 = $180,000.” The trial court ordered Stevenson’s counsel to pay $180,000 from the settlement funds to Texas Mutual. This appeal followed.

LAW & ANALYSIS

In a single issue on appeal, Stevenson argues the trial court failed to properly apportion the settlement proceeds and also requests that Texas Mutual’s recovery be limited to no more than $27,519.40.

An employee may seek damages from a third party who is liable for an injury that is compensable under the labor code. See TEX. LAB. CODE ANN. § 417.001(a). When a benefit is claimed by an injured employee, the insurance carrier is subrogated to the rights of the injured employee. See id. § 417.001(b).

The Texas Supreme Court has repeatedly stated that an insurance carrier is entitled to recover all benefits paid to an injured worker out of the “first money” the worker recovers from a liable third party. See Exxon Mobile Corp. v. Ins. Co. of Am., 568 S.W.3d 650, 651 (Tex. 2019) (citing TEX. LAB. CODE ANN. §§ 417.001–.002). Considering sections 417.001 and 417.002 of the labor code, the supreme court recently reiterated that the insurance carrier has the right to “the first money a worker receives from a tortfeasor,” and “the employee has no right to any sums recovered from a third party until the carrier is reimbursed in full.” Id. at 655-56 (internal quotation marks and footnotes omitted); see also Tex. Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31, 35 (Tex. 2008) (“carrier gets the first money a worker receives from a tortfeasor”); Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 530 (Tex. 2002) (“For decades, the law has been that, under the Workers’ Compensation Act’s subrogation provision, the first money paid [to] or recovered by the employee, or his representatives, belongs to the compensation carrier paying the compensation, and until it is paid in full, the employee, or his representatives, have no right to any funds.”); Harris County, Tex. v. Knapp, 496 S.W.3d 871, 880 (Tex. App.—Houston [1st Dist.] 2016, pet. denied).

Applying the Texas Supreme Court’s authority, Texas Mutual is entitled to the first money Stevenson recovered in the medical malpractice action, and until Texas Mutual is paid in full, Stevenson has no right to the settlement money. In this case, the settlement amount ($270,000.00) does not exceed the amount of Texas Mutual’s subrogation interest as determined by the trial court ($291,031.93). Accordingly, as discussed below, Texas Mutual is entitled to the full amount of the settlement minus payment of attorney’s fees and expenses that Texas Mutual must pay to Stevenson’s counsel pursuant to section 417.003(a).¹

Section 417.003(a) provides:

An insurance carrier whose interest is not actively represented by an attorney in a third-party action shall pay a fee to an attorney representing the claimant in the amount agreed on between the attorney and the insurance carrier. In the absence of an agreement, the court shall award to the attorney payable out of the insurance carrier’s recovery:

(1) a reasonable fee for recovery of the insurance carrier’s interest that may not exceed one-third of the insurance carrier’s recovery; and

(2) a proportionate share of expenses.

TEX. LAB. CODE ANN. § 417.003(a). The parties agree that Texas Mutual’s interest was not actively represented by an attorney in the medical malpractice action, and the record does not reflect that Texas Mutual and Stevenson’s attorney agreed on a fee. Accordingly, Texas Mutual must pay a reasonable fee to Stevenson’s attorney and a proportionate share of expenses. See id.

Stevenson’s counsel was entitled to recover a reasonable fee not to exceed one-third of Texas Mutual’s recovery. See id. § 417.003(a)(1). The trial court awarded Stevenson’s counsel a fee equal to one-third of Texas Mutual’s recovery ($90,000).² We conclude this fee award was not in error. However, subsection (a)(2) requires that Texas Mutual also must pay a proportionate share of expenses from its recovery. See id. § 417.003(a)(2). The trial court erred when it failed to order Texas Mutual to do so.

Stevenson also argues that Texas Mutual is estopped from seeking to recover more than $27,519.40 of the settlement proceeds. Stevenson asserts that Texas Mutual consistently represented the amount of its subrogation lien to be $27,519.40, and “the settlement that was reached with the healthcare providers was based on that amount. Only after the case was settled did [Texas Mutual] come back, demanding subrogation well in excess of even the amount of the settlement.” We disagree.

Quasi-estoppel precludes a party from asserting, to another’s disadvantage, a right inconsistent with a position previously taken. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000); Jamison v. Allen, 377 S.W.3d 819, 823 (Tex. App.—Dallas 2012, no pet.). The principle applies when a party knowingly acts or conducts himself in a particular manner and then takes a position inconsistent with that act or conduct. Jamison, 377 S.W.3d at 823.

Texas Mutual’s written correspondence to Stevenson’s counsel consistently stated the total amount of the workers’ compensation lien from June 30, 2013 through December 23, 2013 was $27,519.40. Texas Mutual’s correspondence also consistently provided the total amount in workers’ compensation benefits that Texas Mutual had paid to and on Stevenson’s behalf; that amount was never less than $253,665.95, and each of the letters confirmed the lien was not final.

The undisputed facts show that the original workplace injury to Stevenson occurred on June 30, 2013, and the incidence of medical malpractice that exacerbated the injury occurred on December 23, 2013. Accordingly, Texas Mutual’s representation that “the total amount of the workers’ compensation lien from June 30, 2013 through December 23, 2013 is $27,519.40” only applied to the portion of the workers’ compensation that Texas Mutual paid before the medical malpractice event exacerbated the injury. Texas Mutual’s correspondence in no way indicated that $27,519.40 was the total amount of its subrogation interest. Rather, Texas Mutual consistently stated its subrogation interest exceeded $253,665.95 and was not final.

We conclude that, in seeking to recover the full amount of its subrogation interest, Texas Mutual did not assert a right inconsistent with a position previously taken and the trial court did not err by refusing to limit Texas Mutual’s recovery to $27,519.40 as Stevenson requested.

CONCLUSION

The trial court’s order denying Stevenson’s motion for apportionment and granting Texas Mutual’s cross motion for apportionment is reversed in part. We reverse the trial court’s order insofar as it incorrectly relies on Texas Labor Code section 417.003(c). We remand this case to the trial court to award a proportionate share of expenses payable to Stevenson’s counsel from Texas Mutual’s recovery pursuant to Texas Labor Code section 417.003(a). In all other respects, the trial court’s order denying Stevenson’s motion for apportionment and granting Texas Mutual’s cross motion for apportionment is affirmed.

Footnotes

Rather than apply section 417.003(a), the trial court erroneously applied section 417.003(c). Section 417.003(c) applies when “an attorney actively representing the insurance carrier’s interest actively participates in obtaining a recovery.” TEX. LAB. CODE. ANN. § 417.003(c). It is undisputed in this case that Texas Mutual did not participate in obtaining the medical malpractice settlement. Therefore, the trial court erred by applying subsection (c). See Morales v. Michelin N. Am., Inc., 351 S.W.3d 120, 122–23 (Tex. App.—San Antonio 2011, no pet.) (“Because Texas Mutual was not actively represented in Morales’s claims against the defendants he alleged were responsible for his injuries, section 417.003(a) is the applicable provision, and the trial court erred when it applied section 417.003(c) and failed to reduce Texas Mutual’s first money payment by the amount of its proportionate share of expenses.”).

Texas Mutual asserts the trial court could apply section 417.003(c) because Stevenson sought apportionment pursuant to that provision. However, the trial court denied Stevenson’s motion and granted Texas Mutual’s cross-motion for apportionment. Accordingly, the grounds on which Stevenson moved for apportionment are not at issue in this appeal; the grounds on which Texas Mutual moved are at issue, and Texas Mutual proposed a division pursuant to section 417.003(a). To the extent Texas Mutual argues the trial court could rely on Stevenson’s representations that section 417.003(c) was the proper provision under which to determine recovery of attorney’s fees and expenses, we consider this argument unavailing.

While reaching the correct result, the trial court incorrectly awarded the fees pursuant subsection (c) rather than pursuant to section 417.003(a)(1).

Court of Appeals of Texas, Dallas.

FLASHDANCER, INC., Appellant

John FULCHER III, Appellee

No. 05-21-00070-CV

Opinion Filed May 4, 2022

On Appeal from the 193rd Judicial District Court, Dallas County, Texas, Trial Court Cause No. DC-18-11379

Attorneys & Firms

Anthony Hamilton Green, for Appellant.

A. Jared Aldinger, Hutton W. Sentell, Geoffrey E. Schorr, for Appellee.

Before Justices Molberg, Reichek, and Garcia

MEMORANDUM OPINION

Opinion by Justice Garcia

*1 This is a common law negligence case against an employer for breach of the duty of care owed to employees. Jack Fulcher, a bouncer for Flashdancer, was shot in the finger when another Flashdancer employee discharged a firearm. Flashdancer now challenges the trial court’s judgment awarding Fulcher damages on his negligence claim, arguing the evidence is insufficient to establish breach of the duty of care. Finding no reversible error, we affirm the trial court’s judgment.

I. BACKGROUND

Ashley Clark worked as a dancer for Flashdancer. Fulcher was employed as a bouncer.

Flashdancer’s policy requires that all persons, including employees, be searched for contraband before entering the premises. There are no exceptions to this policy because state law prohibits firearms on the premises of a nightclub.

On the night in question, Clark visited Flashdancer as a patron. She was greeted by a fellow employee, paid her cover charge, and stepped inside the business. Her purse was not checked for weapons or contraband.

A fight ensued between Clark and her boyfriend, who was also a patron. Fulcher and a coworker intervened. As Fulcher stood beside Clark, she began to run. Fulcher chased Clark, and as he tried to grab her, a gun Clark was holding suddenly discharged, striking Fulcher in the first joint of his index finger. Fulcher was not aware that Clark had a gun until he was shot.

Fulcher was transported to the hospital for medical treatment. His injuries were such that his right index finger ultimately required amputation.

Fulcher sued Flashdancer and others for negligence. At the time of trial, Flashdancer was the only defendant remaining in the suit. The court conducted a bench trial at which Fulcher was the only witness. Several exhibits were admitted into evidence by agreement.¹

When the trial concluded, the court made findings of fact and conclusions of law and entered a final judgment awarding Fulcher $22,899.33 for medical expenses, $1,100 for lost earnings, and $22,899.33 for past and future pain, suffering, mental anguish, physical impairment, and disfigurement. Flashdancer appeals from that judgment.

II. ANALYSIS

Flashdancer argues the evidence is insufficient to establish that it breached the duty of care owed by an employer to an employee.² We disagree.

*2 When conducting a legal sufficiency review of a finding on which the appellant did not bear the burden of proof at trial, we use the “no evidence” standard. “No evidence” points must, and may only, be sustained when the record discloses one of the following situations: (a) a complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than a mere scintilla; (d) the evidence establishes conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).

More than a scintilla of evidence exists when the evidence reaches a level enabling reasonable and fair-minded people to differ in their conclusions. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). “Less than a scintilla of evidence exists when the evidence is ‘so weak as to do no more than create a mere surmise or suspicion’ of a fact.” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)).

A legal sufficiency challenge requires reviewing the record in the light most favorable to the judgment, crediting favorable evidence if a reasonable fact finder could and disregarding contrary evidence unless a reasonable fact finder could not. See City of Keller, 168 S.W.3d at 807. We indulge every reasonable inference in support of the judgment, and we may not substitute our opinions on credibility for those of the fact finder. See id. at 816–17, 822. The ultimate test for legal sufficiency is whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. Id. at 827.

In a bench trial, the trial court acts as a fact finder, and we accord its findings the same weight as a jury verdict. Thompson v. Smith, 483 S.W.3d 87, 93 (Tex. App.—Houston [1st Dist.] 2015, no pet.). Unchallenged findings of fact are binding on the parties and the appellate court. Rich v. Olah, 274 S.W.3d 878, 884 (Tex. App.—Dallas 2008, no pet.).

The elements of a negligence cause of action are a duty, a breach of that duty, and damages proximately caused by the breach of duty. Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995); Werner v. Colwell, 909 S.W.2d 866, 868 (Tex. 1995). The existence of a legal duty is a question of law. Gen. Elec. Co. v. Moritz, 257 S.W.3d 211, 217 (Tex. 2008).

The trial court found, inter alia, that Flashdancer was negligent by and through the actions and/or inactions of its employees because Clark was not searched and entered the premises with a firearm that was accidentally and recklessly discharged, injuring Fulcher. The trial court further found that Flashdancer was required to maintain the premises in a reasonably safe condition and Fulcher was injured due to unsafe conditions; specifically, Flashdancer’s employee’s failure to follow company policies and procedures. Fulcher’s testimony supports these findings.

Fulcher explained Flashdancer’s policy of checking bags and conducting pat down searches of patrons at the front door before they are allowed to enter the premises. There are no exceptions to the policy because firearms are forbidden on the premises under state law.

Recorded security footage was played for the court, and Fulcher identified Clark pulling up to the establishment and hugging the employee at the front door as she entered. Clark was not searched. Another segment of the recording showed Clark walking past the security officer who was smoking a cigarette. Again, Clark was not searched. Fulcher testified that it was not his job to conduct searches that night because he was working the floor, and searches were to be conducted by the person working the front door.

*3 Fulcher described the altercation Clark had with her boyfriend at the bar. When Fulcher chased Clark across the room, he did not see a gun in her hand. But she had a gun in her hand when he tried to grab her. The gun fell to the floor and discharged in the ensuing struggle. The gunshot hit the index finger on Fulcher’s right hand.

Fulcher’s status as an employee gave rise to Flashdancer’s duty to exercise ordinary care in providing a safe workplace. See Kroger Co. v. Elwood, 197 S.W.3d 793, 794 (Tex. 2006); Exxon Corp. v. Tidwell, 867 S.W.2d 19, 21 (Tex. 1993) (nonsubscriber to workers’ compensation owes duty of ordinary care to provide a safe workplace for its employees). Exxon Corp. v. Tidwell, 867 S.W.2d 19, 21 (Tex. 1993). Flashdancer acknowledges this duty but insists that it acted as a reasonable employer and there was an intervening criminal act.³

Flashdancer also insists that as a bouncer in a club, Fulcher was aware of and assumed the risks of such employment. Non-subscribers, however, may not invoke the assumption of the risk defense. See TEX. LAB. CODE ANN. § 406.033 (a)(2). Flashdancer has not identified any evidence contrary to the trial court’s finding that it is a non-subscriber or otherwise explained why it might be entitled to rely on this defense. In addition, although an employer owes no duty to warn of hazards that are commonly known or already appreciated by the employee, liability cannot be avoided by merely alleging the hazards were known when the employer has created a work environment that requires an employee to perform tasks in an unsafe manner. See Elwood, 197 S.W.3d at 794. Thus, while Fulcher may have been aware of the hazards of being a bouncer is an adult entertainment venue, those risks did not include working in an environment with firearms on the premises. The evidence establishes that Flashdancer is responsible for the work environment that required Fulcher to perform his duties as a bouncer in an unsafe manner.

Because the evidence establishes that Flashdancer’s search policy was not followed, creating unsafe working conditions for Fulcher that resulted in his injury, the trial court did not err in concluding that Flashdancer breached the duty owed to Fulcher and that the breach proximately caused his injuries. See, e.g., LMC Complete Automotive, Inc. v. Burke, 229 S.W.3d 469, 476 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (employee’s negligence while acting in scope of employment constituted breach of employer’s duty to use ordinary care to provide a safe workplace); West Star Transp. Inc. v. Robison, 457 S.W.3d 178, 187 (Tex. App.—Amarillo 2015, pet. denied) (employer breached duty to provide safe workplace). Flashdancer’s sole issue is resolved against it.

The trial court’s judgment is affirmed.

Footnotes
¹	These exhibits, which include medical records, security camera photographs, and four documents entitled “Texas Department of Insurance Division of Worker’s Compensation No Coverage Verification,” are not included in the reporter’s record but are not material to our analysis.
²	Although not raised as an issue, Flashdancer also states, without reference to evidence or citations to the record, that it was “not proven at trial that [Flashdancer] was a “non-subscribing employer.” Flashdancer discusses non-subscriber status in the context of a premises liability claim, but then acknowledges that an employee must prove all elements of a common law negligence claim to prevail against non-subscribing employers. This is not a premises liability case. See Austin v. Kroger Tex. L.P., 465 S.W.3d 193, 214, 216 (Tex. 2015) (distinguishing premises liability claims from other types of workplace negligence and noting that employer had a duty not to engage in negligent activities in addition to its premises liability duty). Our analysis here, as framed by the issue raised, is confined to whether the evidence supports a finding of common law negligence.
³	Flashdancer does not challenges the court’s causation findings. Moreover, when the intervening illegal act is the foreseeable result of negligence, it does not negate the continuing proximate causation and consequent liability of the initial actor. See Berly v. D&L Sec. Svcs, and Inv., Inc. 876 S.W.2d 179, 183 (Tex. App.—Dallas 1994, writ denied).