Court of Appeals of Texas, Beaumont.
IN RE FW SERVICES, INC., D/B/A PACESETTER PERSONNEL SERVICES
August 31, 2020
December 10, 2020
136th District Court of Jefferson County, Texas
Trial Cause No. D-204,923
Before McKeithen, C.J., Horton and Johnson, JJ.
*1 FW Services, Inc., d/b/a Pacesetter Personnel Services (“Pacesetter”), Relator, petitioned for a writ of mandamus to compel the trial court to vacate a June 22, 2020 order denying a plea to the jurisdiction and abate a personal injury suit filed by Pacesetter’s employee, Anthony Snowden, until workers’ compensation proceedings have been finally concluded.
Snowden sued Pacesetter and a fellow Pacesetter employee, Joshua Dancurtis Franklin. Snowden alleged that Franklin, acting in the course and scope of his employment with Pacesetter, was transporting Snowden to a jobsite and that Franklin failed to exercise ordinary care in the operation of the vehicle, resulting in a single-vehicle collision that injured Snowden. Snowden alleged Pacesetter was liable under the doctrine of respondeat superior, and that Pacesetter was negligent in hiring and retention, in entrustment, and in training and safety implementation. In an amended petition, Snowden alleged it has been determined that pursuant to the Texas Workers’ Compensation Act Snowden was not in the scope of employment for Pacesetter at the time of the collision.
Pacesetter alleged in its mandamus petition that the exclusive remedy provisions of the Texas Workers’ Compensation Act barred Snowden’s claims against Pacesetter. In addition to raising this affirmative defense in its answer, Pacesetter filed a plea to the jurisdiction through which it asserted that Snowden’s claims against Pacesetter must be abated because the claim was still pending before the commission. Pacesetter alleged that it is a subscriber to workers’ compensation, that the claim was reported as a work-related injury and that compensability was disputed because of Snowden’s intoxication. Pacesetter argued that the trial court must abate Snowden’s tort claims against Pacesetter until the administrative agency’s proceedings have finally concluded. The mandamus record includes a notice from the Texas Department of Insurance Division of Workers’ Compensation (“DWC”). The DWC notified the parties that a benefit review conference of Snowden’s workers’ compensation claim was set for July 23, 2020.
In his response to Pacesetter’s mandamus petition, Snowden argues the trial court has the discretion to deny the plea to the jurisdiction because Snowden raised a genuine issue of material fact as to whether Pacesetter admitted that Snowden was not in the course and scope of his employment with Pacesetter when the accident occurred. It is undisputed, however, that a workers’ compensation proceeding was actively before the DWC on the date that the trial court denied the plea to the jurisdiction. As a matter of law, the DWC has jurisdiction of a workers’ compensation proceeding with Snowden as the worker and Pacesetter as the employer. The trial court could not determine Pacesetter’s exclusive remedy defense until the administrative proceeding concluded. See In re Luby’s Cafeterias, Inc., 979 S.W.2d 813, 817 (Tex. App.—Houston [14th Dist.] 1998, orig. proceeding). A trial court abuses its discretion if it refuses to abate the negligence suit. Id. “Where the outcome of a presently-pending workers’ compensation proceeding would preclude liability in the parallel litigation, there is no adequate remedy by appeal.” In re Louisiana-Pacific Corp., 112 S.W.3d 185, 190 (Tex. App.—Beaumont 2003, orig. proceeding).
*2 We conditionally grant the petition for writ of mandamus. We are confident the trial court will follow the instructions of this Court and abate the case as long as the matter is pending before the commission; a writ will issue only if the trial court below fails to comply with this decision.
PETITION CONDITIONALLY GRANTED.
Submitted on August 31, 2020
Opinion Delivered December 10, 2020
Court of Appeals of Texas, Beaumont.
In the INTEREST OF C.E.A.Q.
Submitted on March 20, 2020
Opinion Delivered September 3, 2020
Attorneys & Firms
Kara Coursey, pro se.
Robert Hall, Burnet, Deterrean Gamble, Austin, for Appellee.
Michael Timothy Quinn, pro se.
Before McKeithen, C.J., Kreger and Johnson, JJ.
STEVE McKEITHEN, Chief Justice
*1 Pro se appellant M.T.Q. appeals from the trial court’s order modifying the terms of his child support obligation. M.T.Q. raises seventeen issues for our consideration. For the reasons explained herein, we affirm the trial court’s order.
In an order establishing the parent-child relationship, the trial court found that M.T.Q. is C.E.A.Q.’s father and ordered M.T.Q. to pay child support of $385.00 per month, beginning May 1, 2009, as well as retroactive child support in the amount of $6820.88. In 2014, M.T.Q. filed a petition seeking to modify the terms and conditions for access to or possession of the child, and on April 4, 2016, the trial court signed an order granting the petition to modify. On February 16, 2018, M.T.Q. filed a document entitled “Due Process Affidavit[,]” in which he made numerous arguments regarding the amount of his child support considering his status as a recipient of disabled veteran’s benefits, and social security disability benefits. Attached to M.T.Q.’s “Due Process Affidavit” was a “Challenge to Constitutionality of a State Statute[,]” in which M.T.Q. asserted that section 154.062 of the Texas Family Code is unconstitutional as applied to him. M.T.Q. also filed a “Memorandum of Law ... and Supplemental Petition for Challenge to Constitutionality of a State Statu[t]e” in support of his modification petition.
On March 5, 2018, the Office of the Attorney General (“OAG”) filed a suit for modification of the child support order. M.T.Q. filed a response, in which he asserted, among other things, that the Department of Veterans Affairs has exclusive jurisdiction and that compensation for disability from social security and disabled veterans’ benefits are protected federal benefits. In response, the OAG argued that the OAG has been assigned the right to collect child support from “any source authorized under the Social Security Act and the Texas Family Code.” In addition, the OAG argued that federal law did not preempt the Texas Family Code and the State’s police powers over domestic relations law, and that the trial court should therefore modify M.T.Q.’s child support obligation. M.T.Q. filed a response to the OAG’s response, and the trial court subsequently signed an order, in which the court found that M.T.Q. was $1156.93 in arrears and granted OAG a judgment against M.T.Q. for that amount. In its order, the trial court also found that M.T.Q.’s gross monthly resources are $4691 and modified M.T.Q.’s child support obligation to $590.21 per month.
M.T.Q. filed a motion for new trial, in which he asserted that the evidence was legally and factually insufficient to support the trial court’s order, and that the trial court therefore abused its discretion in calculating child support. The trial judge signed an order granting M.T.Q.’s motion for new trial, and the trial judge also signed a temporary order requiring M.T.Q. to pay monthly child support in the amount of $574.85. At the final hearing, M.T.Q. told the trial judge that he is a disabled veteran, and he agreed that he draws disability benefits and social security disability benefits. M.T.Q.’s counsel lodged several objections at the beginning of the hearing, including (1) asserting that the trial court lacked jurisdiction because both parties reside in Harris County, (2) objecting to the assignment of Veterans Affairs (VA) benefits, (3) objecting to child support being taken from M.T.Q.’s VA benefits “against Article 4, Section 1 of the U.S. Constitution and [M.T.Q.]’s equal protection under the law[,]” and (4) objecting to the trial court ruling prior to the expiration of forty-five days pursuant to section 402.010 of the Texas Government Code. The trial court overruled each objection. Both C.E.A.Q.’s mother and M.T.Q. testified. During closing arguments, the OAG asserted that the trial court should order monthly child support in the amount of $434. On January 24, 2019, the trial court signed an order on the modification suit, in which the court confirmed that M.T.Q. was $5767.68 in arrears and ordered M.T.Q. to pay child support in the amount of $434 per month.
*2 M.T.Q. filed this appeal, in which he raises seventeen issues for our consideration. Specifically, M.T.Q.’s issues assert that the trial court (1) failed to perform its ministerial duty to rule on his petition challenging the constitutionality of a state statute; (2) did not follow section 402.010(b) of the Government Code, which directs the trial courts to wait forty-five days after the date the OAG is notified of a constitutional challenge to a state statute before ruling; (3) failed to insure that M.T.Q. was afforded substantive and procedural due process rights; (4) denied M.T.Q. due process by failing to accept his Due Process Affidavit “as truth and fact when it remained uncontroverted[;]” (5) failed to require appellees to follow 38 C.F.R. 3.458(g); (6) failed to require the OAG to follow the directives of the Federal Office of Child Support Enforcement; (7) failed to require appellees to submit a VA apportionment claim; (8) failed to acknowledge that 38 U.S.C. §§ 511 and 5301(a) “unequivocally indicate the only lawful provisioning of Appellant’s VA award[;]” (9) erred by impliedly finding that the OAG had “privity of contract as a third party” with M.T.Q.’s VA apportionment claim; (10) violated title 38 of the U.S. Code, the Code of Federal Regulations, and “Congressional Acts” by rendering “an unauthorized, independent apportionment” of M.T.Q.’s VA disability benefits award; (11) erred by including appellant’s social security disability payments in calculating his child support obligations; (12) erred by not determining that C.E.A.Q.’s “monthly SSA derivative payment” is the total support amount that can be lawfully provisioned to C.E.A.Q. from M.T.Q.’s social security disability trust account; (13) erred by excluding M.T.Q.’s non-custodial “direct payments affidavits for credit provisioned by his SSDI trust payments paid directly to the Custodial Parent[;]” (14) erred by using M.T.Q.’s monthly veterans benefits and social security disability benefits for court costs, attorney’s fees, and “state fee payments[;]” (15) erred by requiring M.T.Q. to pay costs and fees despite his indigent status; (16) erred by not awarding M.T.Q. attorney’s fees and costs incurred in defending the petition for modification; and (17) erred by not finding that the OAG abused its power by filing a family violence citation warning without probable cause.
ISSUES ONE, FIVE, SEVEN, EIGHT, NINE, TEN, AND ELEVEN
We interpret M.T.Q.’s arguments in issues one, five, seven, eight, nine, ten, and eleven as asserting that federal law preempts state law, thereby depriving the trial court of jurisdiction and rendering section 154.062 of the Family Code, which expressly includes veterans’ disability as part of a child support obligor’s net resources, unconstitutional. See Tex. Fam. Code Ann. § 154.062. According to M.T.Q., the trial court erred by including his veterans’ disability and social security disability as part of his net resources. We address these issues together.
Section 154.062 of the Texas Family Code provides that for purposes of determining child support liability, net resources include wages, salary, and other compensation for personal services; interest dividends, and royalties; self-employment income; net rental income, and “all other income actually being received, including ... social security benefits other than supplemental security income, [and] United States Department of Veterans Affairs disability benefits other than non-service-connected disability pension benefits[;]” disability and workers’ compensation benefits; interest income; gifts and prizes; spousal maintenance, and alimony. Tex. Fam. Code Ann. § 154.062(a), (b)(5) (emphasis added).
State law that conflicts with federal law is without effect. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992). However, courts must begin with the assumption that the States’ historic police powers are not superseded by federal law unless that is the clear and manifest purpose of Congress. Id. Congressional purpose is the ultimate touchstone of preemption analysis. Id. Congress’s intent to preempt state law may be either explicitly stated in the statute’s language or implicitly contained within the structure and purpose of the statute. Id. If there is no express congressional command, state law is preempted if (1) the state law actually conflicts with federal law, or (2) federal law so thoroughly occupies a legislative field that Congress left no room for the States to supplement federal law. Id.
M.T.Q. argues that several federal statutes, including (1) the Uniformed Services Former Spouses Protection Act (USFSPA), (2) the Child Support Obligations Enforcement Act (“CSEA”), which is the portion of the Social Security Act that pertains to enforcement of child support obligations (“CSEA”), (3) the federal statute pertaining to nonassignability and exempt status of benefits, and (4) the Veterans Administration apportionment statute (VAAS), have preempted the United States Supreme Court’s holding in Rose v. Rose and rendered section 154.062 of the Family Code unconstitutional.1 Rose involved a disabled veteran whose main source of income was federal veterans’ benefits from the Veterans’ Administration and Social Security Administration. Rose v. Rose, 481 U.S. 619, 622 (1987). Upon the veteran’s divorce, the trial court considered the factors set forth in the applicable Tennessee statute, which included his earning capacity, obligations, needs, and financial resources, and the trial court ordered him to pay child support. Id. Rose asserted that the Tennessee court lacked jurisdiction over his disability benefits and that the state statute was null and void because it violated the Supremacy Clause. Id. at 623.
*3 In addressing the issue, the Supreme Court held as follows:
Given the traditional authority of state courts over the issue of child support, their unparalleled familiarity with local economic factors affecting divorced parents and children, and their experience in applying state statutes ... that do contain detailed support guidelines and established procedures for allocating resources following divorce, we conclude that Congress would surely have been more explicit had it intended the Administrator’s apportionment power to displace a state court’s power to enforce an order of child support. Thus, we do not agree that ... the state court’s award of child support from appellant’s disability benefits does ‘major damage’ to any ‘clear and substantial’ federal interest created by this statute.
Id. at 628. The Court concluded that Congress intended for veterans’ disability benefits to provide for disabled veterans as well as for their families, and that state proceedings to enforce a valid child support order are consistent with such intent. Id. at 630-31, 634. In addition, the Rose court noted that the VA administrator’s authority over payment of disability benefits as child support did not preempt state child support enforcement laws. See id. at 626 (holding that “Nowhere do the regulations specify that only the Administrator may define the child support obligation of a disabled veteran in the first instance.”). Rose expressly holds that federal law does not prohibit a state court from determining a veteran’s child support obligation. Id. at 626, 630-31. Therefore, the trial court did not err by considering M.T.Q.’s veteran’s disability benefits in calculating his net resources for purposes of child support. See id.
The USFSPA explicitly provides that “disposable retired pay” of a veteran may be paid directly to a Title IV-D agency or to a state disbursement unit upon presentation of a court2 order for child support. 10 U.S.C.A. § 1408(d). After reviewing the statute as a whole, we conclude that nothing in the USFSPA indicates that Congress intended to preempt the ability of state trial courts to consider veterans’ benefits in calculating the net resources of a parent who owes child support. See generally 10 U.S.C.A. § 1408.
We now turn to the CSEA. The CSEA provides that funds due to an individual from the United States may be used “to enforce the legal obligation of [an] individual to provide child support[.]” 42 U.S.C.A. § 659(a). Explicitly included within the statute’s definition of “individual” are “members of the Armed Forces of the United States,” and the statute also expressly permits state agencies to enforce the individual’s child support obligation. Id. We conclude that nothing in the CSEA indicates that Congress intended to preempt the ability of state trial courts to consider veterans’ benefits in calculating the net resources of a parent who owes child support. See generally 42 U.S.C.A. § 659; see also Cipollone, 505 U.S. at 516.
*4 We next turn to the federal statute pertaining to the nonassignability and exempt status of benefits. See 38 U.S.C.A. § 5301. The statute provides that payment of benefits “shall not be assignable except to the extent specifically authorized by law, ... and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.” Id. § 5301(a)(1). We conclude that nothing in the statute indicates that Congress intended to preempt state trial courts’ ability to include veterans’ benefits in a parent’s net resources for purposes of setting the amount of child support. See generally 38 U.S.C.A. § 5301; see also Cipollone, 505 U.S. at 516.
Lastly, we turn to the VAAS, which provides that all or any part of a veteran’s “compensation, pension, or emergency officers’ retirement pay” may be apportioned on behalf of the veteran’s children. See 38 U.S.C.A. § 5307(a)(1). According to the statute, apportionment may occur if the veteran is not reasonably discharging his duty to support his dependents. 38 C.F.R. § 3.450(a)(1)(ii). We conclude that nothing in the apportionment statute indicates that Congress expressly or impliedly intended to preempt the ability of state trial courts to consider veterans’ benefits in calculating the net resources of a parent who owes child support. See 38 U.S.C.A. § 5307; 38 C.F.R. § 3.450(a)(1)(ii); see also Cipollone, 505 U.S. at 516. We overrule issues one, five, seven, eight, nine, ten, and eleven.
In issue two, M.T.Q. argues that the trial erred by not waiting forty-five days after the date the OAG was notified of his constitutional challenge. See Tex. Gov’t Code Ann. § 402.010(b) (providing that “A court may not enter a final judgment holding a statute of this state unconstitutional before the 45th day after the date notice ... is served on the attorney general.”). M.T.Q. seems to argue that the trial court was required to wait forty-five days before ruling on M.T.Q.’s challenge to the constitutionality of section 154.062 of the Family Code. When construing statutes, we give words their plain meaning. See Epco Holdings, Inc. v. Chicago Bridge & Iron Co., 352 S.W.3d 265, 269-70 (Tex. App.—Houston [14th Dist.] 2011, pet. dism’d); see also Tex. Gov’t Code Ann. § 311.011(a). Section 402.010(b) of the Government Code expressly states that the trial court must observe the forty-five-day waiting period when entering a final judgment that declares a state statute unconstitutional; that is, it does not require the trial court to wait forty-five days before rejecting a challenge to the constitutionality of a statute. See id. In this case, the trial court did not hold the statute unconstitutional; therefore, the forty-five-day waiting period in section 402.010(b) of the Government Code does not apply. See Tex. Gov’t Code Ann. § 402.010(b). Accordingly, we overrule issue two.
ISSUES THREE, FOUR, SIX, TWELVE, THIRTEEN, FOURTEEN, FIFTEEN, SIXTEEN, AND SEVENTEEN
Appellate briefs “must contain a clear and concise argument for the contentions made, with appropriate citations to the authorities and to the record.” Tex. R. App. P. 38.1(i) (emphasis added). An issue that is unsupported by argument or citation to any legal authority presents nothing for the court to review. Plummer v. Reeves, 93 S.W.3d 930, 931 (Tex. App.—Amarillo 2003, pet. denied). An appellant must put forth specific argument and analysis demonstrating that the record and the law support his contentions. San Saba Energy, L.P. v. Crawford, 171 S.W.3d 323, 338 (Tex. App.—Houston [14th Dist.] 2005, no pet.). “An appellate court has no duty to perform an independent review of the record and applicable law to determine whether the error complained of occurred.” Strange v. Cont’l Cas. Co., 126 S.W.3d 676, 677 (Tex. App.—Dallas 2004, pet. denied). A pro se litigant is held to the same standards as licensed attorneys and must comply with applicable laws and rules of procedure. In re Office of Attorney Gen. of Tex., 193 S.W.3d 690, 693-94 (Tex. App.—Beaumont 2006, orig. proceeding).
*5 M.T.Q. set forth issues three, four, six, twelve, thirteen, fourteen, fifteen, sixteen, and seventeen in the statement of issues in his brief, but he included no argument or citations to the record or the applicable law in the body of his brief. We therefore conclude that M.T.Q. has failed to properly present these issues for appellate review. See Tex. R. App. P. 38.1(i); San Saba Energy, L.P., 171 S.W.3d at 338; Strange, 126 S.W.3d at 677; Plummer, 93 S.W.3d at 931. Accordingly, we overrule issues three, four, six, twelve, thirteen, fourteen, fifteen, sixteen, and seventeen. Having overruled each of M.T.Q.’s issues, we affirm the trial court’s judgment.
481 U.S. 619 (1987).
Included in the USFSPA’s definition of “court” is “any court of competent jurisdiction of any State[.]” 10 U.S.C.A. § 1408(a)(1)(A).
Court of Appeals of Texas, Beaumont.
CONN APPLIANCES, INC., Appellant
Richard PUENTE, Appellee
Submitted on December 30, 2019
Opinion Delivered August 13, 2020
Attorneys & Firms
Tommy L. Yeates, Beaumont, Bryan Adam Terrell, Jon B. Burmeister, Beaumont, for Appellee.
Pamela D. Williams, Joseph W. Gagnon, Houston, J. Thad Heartfield, for Appellant.
Before Kreger, Horton and Johnson, JJ.
LEANNE JOHNSON, Justice
*1 Conn Appliances, Inc. (Conn’s) appeals the trial court’s Order granting Richard Puente’s Motion to Vacate an Arbitration Award, denying Conn’s Motion to Confirm the Award, vacating the Arbitration Award, and declaring Conn’s Dispute Resolution Plan (the “Arbitration Agreement”) void. Because we conclude the trial court erred, we reverse the trial court’s order and remand the case to the trial court for proceedings consistent with this opinion.
Puente was employed by Conn’s as an appliance repairman. While repairing a customer’s appliance, Puente injured his thumb and hand. Puente sued Conn’s, his employer, for his personal injuries. Conn’s is a non-subscriber under the Texas Workers’ Compensation Act. See Tex. Labor Code Ann. § 406.003. Puente alleged that Conn’s was negligent in failing to provide him the necessary tools to perform the repair work he was assigned to do, resulting in an injury to his right thumb and hand.
Conn’s had an Arbitration Agreement with Puente. The Arbitration Agreement included the following provisions:
[ ] Either party may bring an action in any court of competent jurisdiction to compel arbitration, to enforce an arbitration award, and to vacate an award under this Plan. The award may be vacated or modified on the grounds specified in the Federal Arbitration Act or when the arbitrator’s award reflects a manifest disregard for the law.
[ ] CONN’S and the employee understand that they are agreeing to substitute one legitimate dispute resolution forum (arbitration) for another (litigation), and that each is hereby waiving its/his/her right to have its/his/her covered dispute(s) resolved by a court and/or jury.
[ ] The terms of this Plan are severable. The invalidity or unenforceability of any provision shall not affect the validity or enforceability of any other provision.
[ ] No party is relying on any representations, oral or written, on the subject or the effect enforceability or meaning of this Agreement, except as specifically set forth in this Plan.
In response to the lawsuit, Conn’s filed an Answer and alleged that the parties had entered into a binding Arbitration Agreement and sought to have the claim submitted to arbitration. Puente and Conn’s then asked the trial court to enter an agreed order to abate the suit and to submit Puente’s claim to binding arbitration. The parties agreed upon an arbitrator and the arbitrator held a final hearing and thereafter issued an Award. The arbitrator concluded that Conn’s was negligent and awarded Puente $60,000. The arbitrator made findings of fact and conclusions of law, which included findings, in pertinent part, that: specific tools should have been provided to Puente by Conn’s which would have prevented his injuries; Puente did not seek other medical treatment for almost five months after initially receiving treatment after the incident, did not follow-up with treatment, and saw his primary care health professional three times following the incident but never mentioned his hand injury; Puente stated in his recorded statement immediately following the injury that he did not feel Conn’s contributed to his injury in any way and that Conn’s is a safe place to work, which “greatly weighed in the final award”; Puente signed a Safety Pledge when he was hired in which he agreed he would report an unsafe act or condition, but Puente failed to report his need for the proper tools despite being trained to use them; Puente was released to return to work in September 2016 but instead of returning to Conn’s, he went to work in the same position for another business, which limited future damages from September 1, 2016; Puente failed to produce certain pay and income records; Conn’s is entitled to a credit for its earlier payment to Puente for $16,025.70; Puente’s reported rotator cuff injury was not caused by the injury; the Award took into account Puente’s obligation to use ordinary care and to act in a reasonable manner, which the arbitrator did not find Puente did to the full extent he should have; and that Conn’s “in its response, whether as to fact or law, has cited a contrary position on almost every material issue which has been carefully considered in rendering this Final Award.”
*2 Puente filed a Motion to Vacate the Arbitration Award on the grounds that the arbitrator manifestly disregarded the law by improperly considering contributory negligence principles in reducing the amount of the damages award. According to the motion, the improper ruling on damages provided a contractual ground for vacatur under the Arbitration Agreement because it allowed for vacatur when the arbitrator displays a manifest disregard for the law, and the improper ruling on damages also provided a statutory ground for vacatur because the arbitrator violated the Texas Arbitration Act (TAA) and Federal Arbitration Act (FAA) by “exceeding his powers” in issuing an award that reflects a manifest disregard of the law. Conn’s filed a Motion to Confirm the award.
The trial court heard the motions and entered an Order that denied Conn’s motion to confirm the arbitration award, granted Puente’s motion to vacate the arbitration award, declared the arbitration agreement void, and stated that Puente could pursue his claim in the trial court. The trial court’s Order included the following findings:
That Defendant is bound by the terms of the Arbitration Agreement applicable to this matter, which Defendant drafted;
That the Arbitration Agreement contained a provision that allowed any Arbitration Award to be vacated if the Arbitrator was found to have manifestly disregarded the law;
That this provision was a material part of the Arbitration Agreement;
That Defendant never intended to abide by this material provision in the Arbitration Agreement;
That the Arbitrator, in his Final Award in this matter, manifestly disregarded the applicable law governing the issues in this matter in a manner that benefitted Defendant;
That, based on Defendant’s material breach, the Arbitration Agreement is VOID.
Issues on Appeal
In Conn’s first issue, it argues the trial court erred in granting Puente’s motion to vacate the arbitrator’s final award and denying Conn’s motion to confirm where the only ground for vacatur presented was a claim of manifest disregard, which is no longer a valid basis for vacatur in arbitrations conducted pursuant to the FAA. In issue two, Conn’s argues that, even if the FAA permits vacatur based on manifest disregard of the law, the trial court erred in finding manifest disregard of the law because the arbitration award never mentioned contributory negligence. In issue three, Conn’s argues the trial court erred because its order declared the entire Arbitration Agreement void based on a claim of fraud, where no evidence of fraud was presented and the arbitration includes a savings clause and disclaimer of representations. In issue four, Conn’s argues the trial court erred in allowing the case to be tried in court following vacatur and Section 10 of the FAA only permits the trial court to order a rehearing by the arbitrator.
Standard of Review and Applicable Law
We review de novo a trial court’s order confirming, modifying, or vacating an arbitration award under the FAA. Banc of Am. Inv. Servs., Inc. v. Lancaster, No. 2-06-314-CV, 2007 WL 2460277, at *, 2007 Tex. App. LEXIS 7100, at *8 (Tex. App.—Fort Worth Aug. 31, 2007, no pet.) (mem. op.) (citing McIlroy v. PaineWebber, Inc., 989 F.2d 817, 819-20 (5th Cir. 1993)); see also In re Chestnut Energy Partners, Inc., 300 S.W.3d 386, 397 (Tex. App.—Dallas 2009, pet. denied); Statewide Remodeling, Inc. v. Williams, 244 S.W.3d 564, 567 (Tex. App.—Dallas 2008, no pet.). This de novo standard is intended to give this Court full power to give strong deference to the award. See Banc of Am. Inv. Servs., 2007 WL 2460277, at *, 2007 Tex. App. LEXIS 7100, at *8; see also McIlroy, 989 F.2d at 819-20. Texas law strongly favors arbitration, and judicial review of an award is narrow and exceedingly deferential. See Hoskins v. Hoskins, 497 S.W.3d 490, 494 (Tex. 2016); Myer v. Americo Life, Inc., 232 S.W.3d 401, 407-08 (Tex. App.—Dallas 2007, no pet.). An arbitration award has the same effect as a judgment of a court of last resort; accordingly, all reasonable presumptions are indulged in favor of the award and none against it. See CVN Grp., Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002); Cambridge Legacy Grp., Inc. v. Jain, 407 S.W.3d 443, 447 (Tex. App.—Dallas 2013, pet. denied). “A party seeking to vacate an arbitration award bears the burden of presenting a complete record that establishes grounds for vacatur.” Amoco D.T. Co. v. Occidental Petroleum Corp., 343 S.W.3d 837, 841 (Tex. App.—Houston [14th Dist.] 2011, pet. denied). The entire record is considered in our review. Statewide Remodeling, Inc., 244 S.W.3d at 567.
*3 Under the FAA, an arbitration award is presumed to be valid. Myer, 232 S.W.3d at 407. An arbitration award governed by the FAA must be confirmed unless it is vacated, modified, or corrected under limited grounds. Amoco D.T. Co., 343 S.W.3d at 841. Under section 10(a), a court may vacate an arbitration decision upon the application of any party to the arbitration:
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
9 U.S.C. § 10(a). The FAA does not include an additional ground to vacate an arbitration award based on the Arbitrator’s error in the interpretation or application of the law, or for mistakes in fact-finding and courts should not “ ‘conduct a review of an arbitrator’s decision on the merits.’ ” Rosales v. Lone Star Corrugated Container Corp., No. 05-19-00183-CV, 2020 WL 415926, at *2, 2020 Tex. App. LEXIS 729, at *6 (Tex. App.—Dallas Jan. 27, 2020, no pet.) (mem. op.) (quoting Householder Grp. v. Caughran, 354 Fed. App’x 848, 851 (5th Cir. 2009)). Under the FAA, courts may vacate an arbitrator’s decision “only in very unusual circumstances.” Id. at *7 (quoting Oxford Health Plans, LLC v. Sutter, 569 U.S. 564, 568, 133 S.Ct. 2064, 186 L.Ed.2d 113 (2013)); see also Hughes Training, Inc. v. Cook, 148 F. Supp. 2d 737, 742 (N.D. Tex.) (“[R]eview of an arbitration award is extraordinarily narrow under the FAA[.]”), aff’d, 254 F.3d 588 (5th Cir. 2001). In other words, this Court’s review is so limited that “we may not vacate an award even if it is based upon a mistake in law or fact.” Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818, 826 (Tex. App.—Dallas 2009, no pet.). Judicial scrutiny focuses on the integrity of the process, not the propriety of the result. Id. (citing TUCO, Inc. v. Burlington N. R.R. Co., 912 S.W.2d 311, 315 (Tex. App.—Amarillo 1995), modified on other grounds, 960 S.W.2d 629 (Tex. 1997)). “Ultimately, our review is a determination of whether the ‘[a]ward [is] so deficient that it warrant[s] sending the parties back to square one.’ ” Howerton v. Wood, No. 02-15-00327-CV, 2017 WL 710631, at *3, 2017 Tex. App. LEXIS 1532, at *7 (Tex. App.—Fort Worth Feb. 23, 2017, no pet.) (mem. op.) (quoting Cat Charter, LLC v. Schurtenberger, 646 F.3d 836, 842 (11th Cir. 2011)).
Although FAA section 10(a)(4) permits a trial court to vacate an award “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made[,]” that provision does not allow a court to vacate an arbitration award for “errors in interpretation or application of the law or facts.” Ancor Holdings, LLC, 294 S.W.3d at 827, 830 (citing Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 429 (Tex. App.—Dallas 2004, pet. denied)); see also 9 U.S.C. § 10(a).
In issue one, Conn’s argues the trial court erred in granting Puente’s motion to vacate the arbitrator’s final award and denying Appellant’s motion to confirm where the only ground for vacatur presented was a claim of manifest disregard and such is not a valid basis for vacatur in arbitrations conducted pursuant to the FAA, even though the Conn’s Arbitration Agreement expressly stated that “[t]he award may be vacated or modified on the grounds specified in the Federal Arbitration Act or when the arbitrator’s award reflects a manifest disregard of the law.” In issue two, Conn’s argues that, even if the FAA still permits vacatur based on manifest disregard of the law, the trial court erred in finding manifest disregard of the law because the arbitration award does not exhibit the arbitrator manifestly disregarded the law and the award never mentioned contributory negligence. On appeal, Puente argues that the final award demonstrates that the arbitrator manifestly disregarded the law by improperly considering Puente’s contributory negligence, “which is forbidden by the State of Texas as a penalty” to a non-subscribing employer. According to Puente, Conn’s also materially breached the Arbitration Agreement by taking the position that Puente could not assert “manifest disregard” as grounds for vacatur, Conn’s fraudulently induced Puente to sign the Arbitration Agreement when it made material representations in the agreement about Puente’s ability to seek vacatur on the basis of a manifest disregard of the law,1 and that caselaw post-Hall states that manifest disregard can fall under Section 10(a)(4)’s “where the arbitrators exceeded their powers” language. See Hall St. Assocs., L.L.C. v. Mattell, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). In his First Amended Supplemental Brief, Puente also asserts that, under the Supreme Court’s recent decision in New Prime Inc. v. Oliveira, ––– U.S. ––––, 139 S. Ct. 532, 202 L.Ed.2d 536 (2019), he is exempt from coverage under Section 1 of the FAA.
*4 Before we address the issues raised by Appellant, we examine Puente’s argument that his claim is exempt from coverage under the FAA pursuant to Section 1 of the FAA. According to Puente, New Prime
provides additional, independent grounds for affirming the trial court’s holding that the Arbitration Agreement at issue in this case is void and unenforceable, as the case recognizes that matters like the instant situation are exempt from coverage by Section 1 of the Federal Arbitration Act, which exempts from the Act’s coverage “contracts of employment of ... workers engaged in interstate commerce.”
Conn’s responds that the “residual exemption in Section 1 of the FAA does not extend beyond the transportation industry[,]” and New Prime reaffirmed prior Supreme Court precedent construing the Section 1 exemption to apply exclusively to workers engaged in the transportation industry. Puente was an appliance repair technician, and nothing in the record indicates he was a worker engaged in the transportation industry. Conn’s also argues that, even if New Prime and the Section 1 exemption applied to the facts in the present case, Puente waived any argument that he is exempted from the FAA’s arbitration requirements by invoking the arbitration process. We need not determine whether the exemption discussed in New Prime applies to Puente if Puente waived the exemption.
Waiver is “an intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right.” Sun Exploration & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987). The reason for finding waiver lies in the “inherent unfairness caused by ‘a party’s attempt to have it both ways by switching between litigation and arbitration[.]’ ” In re Citigroup Global Mkts, Inc., 258 S.W.3d 623, 625 (Tex. 2008) (quoting Perry Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008)). “This reason equally applies when a party substantially invokes the arbitral process to the other party’s detriment.” Thomas Petroleum, Inc. v. Morris, 355 S.W.3d 94, 97 (Tex. App.—Houston [1st Dist.] 2011, pet. denied).
A party must challenge the authority of an arbitrator to resolve a dispute before arbitration occurs, not after. Piggly Wiggly Operators’ Warehouse, Inc. v. Piggly Wiggly Operators’ Warehouse Indep. Truck Drivers Union, Local No. 1, 611 F.2d 580, 584 (5th Cir. 1980). “Under the FAA, the proper procedure for a party to challenge whether it is subject to an arbitration agreement is to move the court for a stay of arbitration.” Garner v. MBNA Am. Bank, N.A., No. 3:05-CV-1029-R, 2006 WL 2354939, at *3, 2006 U.S. Dist. LEXIS 56799, at *9 (N.D. Tex. Aug. 14, 2006). A party must also preserve its jurisdictional objection by first raising it with the arbitrator. Teamsters Local Union No. 764 v. J.H. Merritt & Co., 770 F.2d 40, 42-43 (3d Cir. 1985). Failure to make a timely objection to the arbitration procedure amounts to waiver of the objection. Brook v. Peak Int’l, Ltd., 294 F.3d 668, 674 (5th Cir. 2002); Teamsters Local Union No. 764, 770 F.2d at 42-43.
Puente consented to and joined the filing of the Agreed Motion for Abatement. As stated in the Agreed Motion, the parties agreed
that the claims asserted by Plaintiff are covered by a mutual written agreement to arbitrate all disputes relating to Plaintiff’s employment, and that Plaintiff’s claims are arbitrable .... The [p]arties have agreed to arbitrate this matter.
*5 The trial court signed the Agreed Proposed Order to Abate Proceedings and sent the matter to arbitration. Puente never raised an objection to the arbitrator, or to the arbitration procedure, nor did he seek to stay the arbitration. See Teamsters Local Union No. 764, 770 F.2d at 42-43; Piggly Wiggly Operators’ Warehouse, 611 F.2d at 584; Garner, 2006 WL 2354939, at *3, 2006 U.S. Dist. LEXIS 56799, at *9. Puente first asserted he was exempt from the arbitration under Section 1 of the FAA on appeal. We conclude that Puente waived his exemption argument by substantially invoking the arbitral process. See id.
Having rejected the exemption argument made by Puente, we now address Conn’s first appellate issue. Conn’s argues that pursuant to the Supreme Court’s 2008 opinion in Hall Street Associates, L.L.C. v. Mattel, Inc., the grounds for which a trial court may vacate an arbitration award under the FAA are limited to those expressly identified in Section 10. Conn’s contends that the Supreme Court has expressly concluded that the statutory grounds for vacatur cannot be supplemented by agreement. See Hall St. Assocs., 552 U.S. at 578, 128 S.Ct. 1396. Accordingly, Conn’s argues that its arbitration award could not be set aside or vacated due to a “manifest disregard of the law.”
Following Hall, federal courts in the Fifth Circuit and several intermediate Texas appellate courts have concluded that our review of an arbitration award under the FAA is limited to the statutory grounds enumerated in the statute, and “manifest disregard of the law” as a non-statutory ground is no longer a proper basis for setting aside an arbitration award under the FAA. See Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009); WEH-SLMP Invs., LLC v. Wrangler Energy, LLC, No. 05-19-00271-CV, 2020 WL 994697, at **, 2020 Tex. App. LEXIS 1808, at **9-10 (Tex. App.—Dallas Mar. 2, 2020, no pet.) (mem. op.); Holmes Builders at Castle Hills, Ltd. v. Gordon, No. 05-16-00887-CV, 2018 WL 1081635, at *, 2018 Tex. App. LEXIS 1572, at *5 (Tex. App.—Dallas Feb. 28, 2018, no pet.) (mem. op.); Prescription Health Network, LLC v. Adams, No. 02-15-00279-CV, 2017 WL 1416875, at *, 2017 Tex. App. LEXIS 3533, at **11-15 (Tex. App.—Fort Worth Apr. 20, 2017, pet. denied) (mem. op.); Ancor Holdings, LLC, 294 S.W.3d at 829-30; Allstyle Coil Co., L.P. v. Carreon, 295 S.W.3d 42, 44 (Tex. App.—Houston [1st Dist.] 2009, no pet.); Chandler v. Ford Motor Credit Co., LLC, No. 04-08-00100-CV, 2009 WL 538401, at **, 2009 Tex. App. LEXIS 1587, at **8-10 (Tex. App.—San Antonio Mar. 4, 2009, no pet.) (mem. op.). We agree with our sister courts and conclude that manifest disregard of the law is not an independent basis for setting aside an arbitration award under the FAA.
That said, Appellee contends that even if “manifest disregard of the law” may not be an independent basis for vacatur, it remains a viable argument as part of the “judicial gloss” within the statutory grounds enumerated in section 10.2 We need not determine whether manifest disregard constitutes a basis for vacating this arbitration award as part of a “judicial gloss” within the statutory grounds enumerated in Section 10 because Puente failed to meet his burden to demonstrate that the arbitrator manifestly disregarded controlling law. To the extent that manifest disregard survived Hall Street, it requires far more than mere error in the law or failure of the arbitrator to properly apply or consider the law. WEH-SLMP Invs., LLC, 2020 WL 994697, at **, 2020 Tex. App. LEXIS 1808, at **9-10; see also McKool Smith P.C. v. Curtis Int’l, Ltd., 650 Fed. App’x 208, 212-13 (5th Cir. 2016). The standard for manifest disregard for the law is deferential to the arbitrator and, by design, is “difficult to satisfy.” Bacon, 562 F.3d at 354. “Manifest disregard ‘means more than error or misunderstanding with respect to the law.’ ” Brabham v. A.G. Edwards & Sons, Inc., 376 F.3d 377, 381 (5th Cir. 2004) (quoting Prestige Ford v. Ford Dealer Comput. Servs., Inc., 324 F.3d 391, 395 (5th Cir. 2003)); see also DynaColor, Inc. v. Razberi Techs., Inc., 795 Fed. App’x 261, 264 (5th Cir. 2020) (per curiam). Puente failed to establish that the arbitrator “appreciated the existence of a clearly governing principle but decided to ignore or pay no attention to it.” Brabham, 376 F.3d at 381-82 (quotation omitted). Even if the arbitrator understood—and ignored—Texas law, “the award should be upheld unless it would result in significant injustice, taking into account all the circumstances of the case[.]” Williams v. Cigna Fin. Advisors, Inc., 197 F.3d 752, 762 (5th Cir. 1999); see also United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (“[T]hat a court is convinced [the arbitrator] committed serious error does not suffice to overturn [the arbitrator’s] decision[, but] decisions procured by the parties through fraud or through the arbitrator’s dishonesty need not be enforced.”). Here, giving deference to the arbitrator’s award and considering all the circumstances of the case, we cannot say that the award would result in significant injustice. See Bacon, 562 F.3d at 354; Williams, 197 F.3d at 762. Our review is so limited that we cannot vacate the award even if the arbitrator made a mistake in law or fact. Ancor Holdings, LLC, 294 S.W.3d at 826; see also Wilko v. Swan, 346 U.S. 427, 436-37, 74 S.Ct. 182, 98 L.Ed. 168 (1953) (An arbitrator’s erroneous interpretations or applications of law are not reversible.). We cannot say here that the award is so deficient that it warrants sending the parties back to square one. See Howerton,2017 WL 710631, at *3, 2017 Tex. App. LEXIS 1532, at *7.
*6 Puente also argues that the trial court correctly vacated the award because the award was procured by fraud. In the Order vacating the Award, the trial court found that Conn’s never intended to abide by the material provision in the Arbitration Agreement that allowed an arbitration award to be vacated if the arbitrator was found to have manifestly disregarded the law. In his motion to set aside and vacate the Award, Puente argued that Conn’s fraudulently induced him to enter into the Arbitration Agreement in 2014 by promising the relief of vacatur if the arbitrator manifestly disregarded the law, a provision Puente contends Conn’s never intended on honoring, and that Conn’s breached the Arbitration Agreement by intentionally taking the position that under Hall Street (a 2008 case) the provision was unenforceable. Puente’s “evidence” of the alleged fraud was Conn’s argument and reliance on Hall Street in its effort to confirm the arbitration award.
Section 10(a)(1) of the FAA expressly allows a party to vacate an award “where the award was procured by corruption, fraud, or undue means[.]” See 9 U.S.C. § 10(a)(1). To warrant vacatur of an arbitration award under this subsection, the movant must establish fraud by clear and convincing evidence and there must be a nexus between the award and the alleged fraud. Morgan Keegan & Co. v. Garrett, 495 Fed. App’x 443, 447 (5th Cir. 2012); Forsythe Int’l, S.A. v. Gibbs Oil Co., 915 F.2d 1017, 1022 (5th Cir. 1990) (citing Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1383 (11th Cir. 1988)); see also In re Arbitration Between Trans. Chem. Ltd. & China Nat’l Mach. Imp. & Exp. Corp., 978 F. Supp. 266, 304 (S.D. Tex. 1997); Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 810-11 (Tex. App.—Dallas 2008, pet. denied). Fraud requires a showing of bad faith during the arbitration proceedings, such as bribery, undisclosed bias of an arbitrator, or willfully destroying or withholding evidence. Roehrs, 246 S.W.3d at 812; In re Trans. Chem., 978 F. Supp. at 304. Puente failed to establish by clear and convincing evidence that the alleged fraud (including the “manifest disregard” language in the agreement) in any way had a nexus to the arbitrator’s award. See Morgan Keegan & Co., 495 Fed. App’x at 447; Forsythe Int’l, S.A., 915 F.2d at 1022. Puente also failed to demonstrate a showing of bad faith during the arbitration proceeding. See Roehrs, 246 S.W.3d at 812; In re Trans. Chem., 978 F. Supp. at 304. Therefore, the trial court erred in vacating the award and based upon its finding that Conn’s did not intend to abide by the “manifest disregard” provision.
We conclude the district court erred in denying Conn’s motion to confirm the arbitration award, it erred in granting Puente’s motion to vacate the arbitration award, and it erred in declaring the Arbitration Agreement void. Accordingly, we sustain Conn’s second issue. Because of our resolution of issue two, we need not address Appellant’s remaining issues. See Tex. R. App. P. 47.1. We reverse the trial court’s order and remand the case to the trial court for proceedings consistent with this opinion.
REVERSED AND REMANDED.
Puente has not directed this court to any evidence in the record to support his claim that Conn’s knew that the “manifest disregard” language was unenforceable at the time it entered into the Arbitration Agreement with Puente, nor has he cited to evidence in the record that Conn’s knew at the time the Arbitration Agreement was drafted that manifest disregard was not a proper basis for vacatur. The only evidence in the record now before us indicates that the Arbitration Agreement was a form drafted by Conn’s in 2006, which predates issuance of the 2008 Hall opinion. See Hall St. Assocs., L.L.C. v. Mattell, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). We also note that the Arbitration Agreement had a “severability clause” and a disclaimer of reliance provision.
The Supreme Court’s dicta in a footnote in Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 n.3, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010), stated, “We do not decide whether ‘manifest disregard’ survives our decision in [Hall Street] as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth in 9 U.S.C. § 10.”
Court of Appeals of Texas, Beaumont.
Michael GUSTAFSON, Appellant
COMPLETE MANUFACTURING SERVICES INC., Ronald Smith and Oletha Smith, Appellees
Submitted on October 8, 2019
Opinion Delivered July 23, 2020
Attorneys & Firms
Dale Carrington, for Appellees.
Ray A. Burgess, Conroe, Alton C. Todd, Friendswood, C. Michael Davis, for Appellant.
Before McKeithen, C.J., Kreger and Horton, JJ.
CHARLES KREGER, Justice
*1 Appellant Michael Gustafson sued Appellees Complete Manufacturing Services, Inc. (“CMS”), Ronald Smith, and Oletha Smith for injuries he sustained while on the job.1 Locke Technical Services, Inc. (“Locke”) employed Gustafson and subsequently assigned him to work for CMS, on whose premises the accident occurred. Gustafson alleged CMS was a non-subscriber to workers’ compensation insurance and asserted claims of negligence and gross negligence against Appellees. He further sought to pierce the corporate veil of CMS and hold the Smiths individually liable for his damages. Appellees filed a motion for summary judgment asserting that CMS was entitled to the exclusive remedy defense claiming Locke “leased” Gustafson to CMS and cited to the Staff Leasing Services Act (SLSA). See Act of May 18, 2013, 83rd Leg., R.S., ch. 117, § 29(b), 2013 Tex. Sess. Law. Serv. 495, 507 (codified at Tex. Lab. Code Ann. §§ 91.001–.062). The trial court granted Appellees’ summary judgment.
In five issues, Gustafson challenges the summary judgment as to his negligence claims and the corporate veil-piercing theory.2 In his first issue, Gustafson disputes the availability of and Appellees’ entitlement to the workers’ compensation exclusive remedy defense under the SLSA, as amended in the Professional Employer Organizations Act (PEOA). See id. In his second and third issues, Gustafson challenges the contention that his status as a temporary worker or borrowed servant entitled CMS to the exclusive remedy defense, pointing to CMS’s non-subscriber status. In his fourth issue, Gustafson asserts the corporate veil should be pierced, and the Smiths should be held individually liable. His last issue addresses his prima facie case of negligence. Because we determine genuine issues of material fact remain, we reverse the summary judgment and remand to the trial court for further proceedings.
Locke employed Gustafson as a shop helper and assigned him to work at CMS, one of Locke’s clients. Locke paid him an hourly rate and billed CMS at a higher rate for Gustafson’s time. While working in CMS’s facility, Gustafson was injured when a forklift load began to shift and the CMS forklift operator quickly set the forks down, causing the channels to cut Gustafson’s foot and requiring the amputation of his left big toe. It is undisputed that following the incident, Gustafson received benefits under Locke’s workers’ compensation policy. Gustafson sued Appellees for negligence and gross negligence and sought to hold the Smiths individually liable based on a corporate veil-piercing theory. Gustafson alleged the incident occurred during the course and scope of his employment and that CMS was a non-subscriber to workers’ compensation insurance.
*2 Appellees moved for summary judgment without specifying whether it was a traditional or no-evidence motion. Appellees asserted that CMS was Gustafson’s employer, Locke elected to provide workers’ compensation coverage, and therefore, Appellees were entitled to summary judgment based on the workers’ compensation exclusive remedy provision as a matter of law. Appellees contended in their summary judgment motion that Gustafson could have more than one employer and cited to the SLSA. In their summary judgment motion, although Appellees argued that Locke “leased” Gustafson to CMS, they reasoned that it did not matter whether Gustafson “was a borrowed servant, a leased employee or a jointly controlled employee.” Appellees further asserted there was no evidence that would allow Gustafson to pierce the corporate veil.
The summary judgment evidence included: (1) excerpts from Ronald Smith’s deposition containing testimony that Gustafson was a CMS employee and CMS supervised his work; (2) Locke’s invoices submitted to CMS for Gustafson’s hours worked; (3) Gustafson’s check stubs showing his pay rate; (4) certificates of insurance for Locke showing workers’ compensation coverage for Locke only; (5) correspondence from the workers’ compensation carrier regarding Gustafson’s impairment rating and maximum medical improvement listing Locke as the employer; (6) Gustafson’s employment records from Locke; and (7) a State of Texas “Personnel Employment Service Certificate of Authority” issued to Locke that expired in 2006. The summary judgment evidence did not include any written agreement between CMS and Locke nor any evidence that Locke was a valid license holder at the time this incident occurred. The summary judgment record likewise did not include any evidence that CMS subscribed to workers’ compensation insurance.3
In response, Gustafson argued neither the SLSA nor the PEOA applied as no qualifying agreement existed between Locke and CMS, and Locke’s election of coverage was immaterial. Gustafson further argued that he was only a temporary worker at CMS, and CMS was a non-subscriber under the Texas Workers’ Compensation Act (TWCA). See Tex. Lab. Code Ann. § 401.001 et seq.
In Appellees’ reply to Gustafson’s summary judgment response, Appellees asserted that even if the SLSA or PEOA did not apply, Gustafson was a borrowed servant or a temporary worker, and therefore, Texas Labor Code section 93.004 applies entitling Appellees to judgment as a matter of law pursuant to the workers’ compensation exclusive remedy provision. Gustafson filed a sur-reply complaining that Appellees raised an entirely new basis for its summary judgment for the first time in their reply.4
II. Standard of Review
Because traditional and no-evidence summary judgment motions are distinct and afford distinct standards of review, we must make an initial determination regarding which type of motion was before the trial court. Compare Tex. R. Civ. P. 166a(c), with Tex. R. Civ. P. 166a(i). In making this determination, we look to the substance of the motion rather than categorizing the motion strictly by its form or title. See Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 375 (Tex. App.—Dallas 2009, pet. denied); Sanchez v. Mulvaney, 274 S.W.3d 708, 710 (Tex. App.—San Antonio 2008, no pet.). But see Phillips v. Am. Elastomer Prods., L.L.C., 316 S.W.3d 181, 185 (Tex. App.—Houston [14th Dist.] 2010, pet. denied) (noting that if a “motion does not clearly and unambiguously state that it is being filed under rule 166a(i), the nonmovant has no notice that the movant is seeking a no-evidence summary judgment”) (citation omitted). Here, Appellees moved for summary judgment on the affirmative defense of the workers’ compensation exclusive remedy, which required them to conclusively establish that defense.
*3 Although a plaintiff may move for no-evidence summary judgment on the ground that there is no evidence of one or more essential elements of an affirmative defense that a defendant alleged and has the burden to prove, a defendant must file a traditional motion for summary judgment if it wishes to establish each element of that defense as a matter of law. See FDIC v. Lenk, 361 S.W.3d 602, 609 (Tex. 2012) (“ ‘When a defendant moves for summary judgment based on an affirmative defense, ... the defendant, as movant, bears the burden of proving each essential element of that defense.’ ” (quoting Ryland Grp., Inc. v. Hood, 924 S.W.2d 120, 121 (Tex. 1996) (per curiam)); see also Haver v. Coats, 491 S.W.3d 877, 881–82 (Tex. App.—Houston [14th Dist.] 2016, no pet.). The burden of proof never shifts to the non-movant unless and until the movant has “establish[ed] his entitlement to a summary judgment on the issues expressly presented to the trial court by conclusively proving all essential elements of his cause of action or defense as a matter of law.” City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); see also Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989). Thus, because Appellees moved for summary judgment on the affirmative defense of exclusive remedy, they must carry the burden of proof on their traditional motion for summary judgment.
Regarding Gustafson’s alter ego theory, Appellees argued “Plaintiffs (sic) have pleaded an alter ego theory, although no evidence supports such a claim.” Based on the substance of this portion of the motion, we determine Appellees’ summary judgment on Gustafson’s veil-piercing claims was a no-evidence motion. In order to defeat a no-evidence motion, the nonmovant must bring forth enough summary judgment evidence to raise a genuine issue of fact on each element the movant has challenged. Tex. R. Civ. P. 166a(i); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). “A genuine issue of material fact exists if more than a scintilla of evidence establishing the existence of the challenged element is produced.” Ridgway, 135 S.W.3d at 600 (citation omitted).
We review the grant of a traditional summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010) (citation omitted). “A party moving for summary judgment must conclusively prove all elements of its cause of action or defense as a matter of law.” Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001) (citing Tex. R. Civ. P. 166a(c); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996)). We consider the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge all reasonable inferences and resolve any doubts in the nonmovant’s favor. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004) (citations omitted).
A. Applicable Law: Exclusive Remedy Defense Generally
The TWCA allows a subscribing employer’s injured employee to recover benefits for work-related injuries on a no-fault basis. See Tex. Lab. Code Ann. § 406.031. The TWCA’s intent is to benefit employees and employers. See Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238, 241 (Tex. 2012); AmeriGas Propane LP v. Aboytes-Muñiz, No. 09-18-00122-CV, 2019 WL 2127750, at *5 (Tex. App.—Beaumont May 16, 2019, pet. denied) (mem. op.). Under the TWCA’s exclusive remedy provision, recovery of workers’ compensation benefits is the exclusive remedy of an employee against an employer for a work-related injury. See Tex. Lab. Code Ann. § 408.001. Texas courts have long held that an employee can have more than one employer for purposes of the TWCA, and each employer may raise the defense of exclusive remedy as to an employee’s claims. See Western Steel Co. v. Altenburg, 206 S.W.3d 121, 123 (Tex. 2006); Garza v. Exel Logistics, Inc., 161 S.W.3d 473, 476–78 (Tex. 2005); Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 143, 149 (Tex. 2003). To be entitled to summary judgment based on the affirmative defense of the workers’ compensation exclusive remedy, a defendant must conclusively establish that at the time of the work-related injury: (1) the injured worker was an employee or borrowed servant of the defendant; and (2) the defendant had workers’ compensation insurance at the time of the accident. Garza, 161 S.W.3d at 475–77 (Tex. 2005); AmeriGas Propane LP, 2019 WL 2127750, at *5.
*4 There is no evidence that CMS subscribed to workers’ compensation insurance.5 Therefore, to be entitled to the exclusive remedy defense as a non-subscriber, CMS had to establish not only that Gustafson was an employee or borrowed servant but that it could avail itself of Locke’s proof of workers’ compensation coverage. See Garza, 161 S.W.3d at 475–77; AmeriGas Propane LP, 2019 WL 2127750, at *5; see also Tex. Lab. Code Ann. § 408.001.
In his first three issues, Gustafson challenges whether Appellees conclusively established their entitlement to the exclusive remedy defense and argues genuine issues of material fact exist precluding summary judgment. We address these issues in turn.
1. Issue One: SLSA and PEOA
On appeal and in response to the summary judgment below, Gustafson claims that neither the SLSA nor its successor the PEOA applies as a matter of law. Gustafson points to the absence of a written agreement between Locke and CMS as well as the fact that the statute, in its current form, excludes “temporary help.” See Tex. Lab. Code Ann. § 91.001(14)(A).
In support of Appellees’ summary judgment contention that the TWCA’s exclusive remedy defense applied to CMS and barred Gustafson’s claims, Appellees argued that Locke and CMS were “co-employers as defined by the Staff Leasing Services [Act].” See id. § 408.001. The legislature amended the SLSA in 2013 and re-codified it as the Professional Employer Organization Act. See Tex. Lab. Code Ann. §§ 91.001–.062. The 2013 amendments apply only to professional employer services agreements entered on or after September 1, 2013. See Act of May 18, 2013, 83rd Leg., R.S., ch. 117, § 29(b), 2013 Tex. Sess. Law. Serv. 495, 507 (codified at Tex. Lab. Code Ann. §§ 91.001–.062); see also Reveles v. OEP Holdings, LLC, 574 S.W.3d 34, 37 (Tex. App.—El Paso 2018, no pet.). The summary judgment record is devoid of any written agreement between Locke and CMS.
Under the PEOA, “coemployer” is defined as a “professional employer organization or a client that is a party to a coemployment relationship.” See Tex. Lab. Code Ann. § 91.001(3-a). The PEOA further defines a “coemployment relationship” as “a contractual relationship between a client and a professional employer organization that involves the sharing of employment responsibilities ... to covered employees in accordance with the professional services agreement and this chapter.” Id. § 91.001(3-b). In order to qualify as coemployers under the PEOA, CMS and Locke necessarily had to be in a contractual relationship governed by a professional services agreement. See id. This agreement must be in writing. See id. § 91.031(a). The PEOA also requires that a professional employer organization be licensed. See id. § 91.011. “Co-employer status of a client company depends on the staff leasing services company being a license holder.” Synergy Mgmt. Grp., L.L.C. v. Thompson, 398 S.W.3d 843, 847 (Tex. App.—Eastland 2012, no pet.).
To benefit from Locke’s election of workers’ compensation insurance and thereby be entitled to the workers’ compensation exclusive remedy defense under the SLSA or PEOA, CMS had to establish it and Locke were co-employers under the statute. See Garza, 161 S.W.3d at 478; Tex. Workers’ Comp. Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591, 594 (Tex. 2000); Synergy Mgmt. Grp., L.L.C., 398 S.W.3d at 846. CMS could do so by providing summary judgment evidence that Locke was a valid license holder and the parties operated under a written agreement. See Tex. Lab. Code Ann. § 91.001(3-a), (3-b).
*5 The PEOA further directs that a professional services agreement must specify whether the parties have elected to obtain workers’ compensation insurance coverage for the covered employees and which party must maintain coverage. See id. § 91.042(a-1). For purposes of the PEOA, a certificate of insurance or other evidence of coverage showing that either a license holder or client maintains workers’ compensation coverage constitutes proof of coverage for the license holder and client with respect to all covered employees of the license holder and client. Id. § 91.006.6 If operating under a SLSA or PEOA-defined co-employment relationship, Appellees must also establish that Locke or CMS elected workers’ compensation coverage to be entitled to section 408.001’s bar. See id. § 91.042(c).
To avail itself of Locke’s election to provide workers’ compensation insurance under the PEOA and the exclusive remedy defense, CMS must have conclusively established that it was in a coemployment relationship with Locke, as that term is defined under the PEOA. This required Appellees to show that at the time of this accident, a written professional services agreement existed between CMS and Locke. See id. § 91.001(3-b); see also Rodriguez v. Lockhart Contracting Servs., Inc., 499 S.W.3d 48, 61 (Tex. App.—San Antonio 2016, no pet.). Moreover, that agreement would need to specify whether Locke, as the purported license holder, or CMS, would obtain workers’ compensation insurance. See Tex. Lab. Code Ann. § 91.042(a-1).
The only license produced in the summary judgment record expired in 2006. Appellees failed to provide summary judgment evidence that Locke held a valid license at the time the incident occurred or that a written professional services agreement existed between CMS and Locke. See Tex. Lab. Code Ann. § 91.001(3-b); Rodriguez, 499 S.W.3d at 61. Accordingly, CMS did not carry its burden to conclusively establish that it had a co-employment relationship with Locke under either the SLSA or PEOA that would make Locke’s election to procure workers’ compensation insurance for Gustafson applicable to CMS. See Synergy Mgmt. Group, 398 S.W.3d at 843 (explaining that where purported client company failed to establish that other company was a “license holder,” they “could not be co-employers” under the SLSA). We sustain issue one.
2. Issues Two and Three: Temporary Employee and Non-subscriber
In his second and third issues, Gustafson contends he “was a loaned, temporary employee” and that CMS was a non-subscriber to workers’ compensation insurance. Texas Labor Code section 93.004 provides that
[a] certificate of insurance coverage showing that a temporary employment service maintains a policy of workers’ compensation insurance constitutes proof of workers’ compensation insurance coverage for the temporary employment service and the client of the temporary employment service with respect to all employees of the temporary employment service assigned to the client.
Tex. Lab. Code Ann. § 93.004(a). The statutory provision became effective in 2013 and was part of the amendments to simplify the workers’ compensation scheme in Texas. Robles v. Mount Franklin Food, L.L.C., 591 S.W.3d 158, 166 (Tex. App.—El Paso 2019, pet. denied) (noting attempt by legislature to simplify entitlement to exclusive remedy provision with respect to temporary employment services by 2013 amendments to section 93.004).7 A certificate providing workers’ compensation insurance for the temporary employment service is proof which entitles both it and the client to the exclusive remedy defense. Id.; see also Tex. Lab. Code Ann. § 93.004. This section differs from the SLSA and PEOA as it does not require the same type of written agreements or a license. Compare Tex. Lab. Code Ann. § 93.004, with §§ 91.001(3-b), 91.011.
*6 Gustafson challenges whether Appellees properly addressed these arguments in their summary judgment motion and whether Appellees’ motion incorporated the requisite evidence. In their summary judgment motion, Appellees did not assert that Gustafson’s status as a temporary worker and section 93.004 or Gustafson’s status as a borrowed servant entitled them to the affirmative defense of exclusive remedy. Rather, after Gustafson filed his response to the motion for summary judgment, Appellees asserted for the first time in their reply that Gustafson was a borrowed servant or a temporary worker and such status entitled them to the exclusive remedy defense pursuant to section 93.004. Appellees further argued that his election to receive workers’ compensation benefits from Locke barred his claims against CMS. Gustafson objected to the trial court considering these issues in the summary judgment.
Rule 166a requires that a summary judgment motion state the specific grounds therefor, and the movant is entitled to judgment as a matter of law on the issues expressly set out in the motion or in an answer or other response. Tex. R. Civ. P. 166a(c) (emphasis added); Johnson v. Brewer Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002); Stiles v. Resolution Tr. Corp., 867 S.W.2d 24, 26 (Tex. 1993). In other words, a motion for summary judgment must “stand or fall on the grounds expressly presented in the motion.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993). “A reply is not a motion for summary judgment.” Reliance Ins. Co. v. Hibdon, 333 S.W.3d 364, 378 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (citing Guest v. Cochran, 993 S.W.2d 397, 403 (Tex. App.—Houston [14th Dist.] 1999, no pet.)). Courts have clarified that an issue raised for the first time in the movant’s reply to the nonmovant’s response cannot be considered as a basis for affirming the summary judgment. See Rodriguez, 499 S.W.3d at 61 (citing Henckel v. Norman, 441 S.W.3d 249, 251 n.1 (Tex. 2014)). A movant is not permitted to use its reply to amend its summary judgment motion or to raise new and independent grounds for summary judgment. Id.; Garcia v. Garza, 311 S.W.3d 28, 36 (Tex. App.—San Antonio 2010, pet. denied); 1001 McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital, 192 S.W.3d 20, 25 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (“In the absence of the nonmovant’s consent, a movant may not raise a new ground for summary judgment in a reply to the nonmovant’s response.”).
Here, Appellees’ motion for summary judgment vaguely referenced the SLSA/PEOA and failed to mention Texas Labor Code section 93.004. Then Appellees went on to assert in their summary judgment motion that it “doesn’t matter whether [Gustafson] was a borrowed servant, a leased employee or a jointly controlled employee.” We disagree. In the context of a summary judgment motion, it does matter. While it is undisputed that Gustafson elected and received workers’ compensation benefits, under each of the theories listed above, the proof required to establish CMS’s entitlement to the exclusive remedy defense differs. Appellees did not specifically argue in their summary judgment motion that Gustafson was a borrowed servant, a temporary worker, or subject to the SLSA. They simply said it did not matter.
The exact nature of the relationship between Locke and CMS was not established, other than Locke provided workers to CMS. It is unclear if the relationship fell under section 93.004 or the SLSA/PEOA, as the proof conclusively established neither. Because the SLSA/PEOA excludes “temporary workers,” and section 93.004 covers them, CMS was required to prove one or the other in order to benefit from Locke’s election of coverage that would entitle it to the exclusive remedy defense.
Since we are not permitted to affirm a summary judgment on grounds first raised in a movant’s reply to a nonmovant’s response, we cannot consider Appellees’ contention that a borrowed servant theory or that a temporary employment agency’s procurement of insurance entitles them to the exclusive remedy defense pursuant to Texas Labor Code section 93.004, regardless of their merit. McConnell, 858 S.W.2d at 341; Rodriguez, 499 S.W.3d at 61. CMS failed to show Locke’s election to obtain workers’ compensation insurance entitled it to the exclusive remedy defense. See Reveles, 574 S.W.3d at 39. We determine Appellees failed to meet their traditional summary judgment burden of proof, and genuine issues of material fact remain. We sustain Appellant’s second and third issues.
B. Issue Four: Piercing the Corporate Veil
*7 Although Appellees made the allegation with respect to Gustafson’s alter ego theory in its summary judgment motion that “no evidence supports such a claim,” they do not challenge any particular element of a corporate veil piercing theory or any of the particular factors a court should consider in making such a determination. “A no-evidence motion for summary judgment is legally insufficient as a matter of law if it is not specific in challenging a particular element or is conclusory.” See Sanchez, 274 S.W.3d at 710 (citing McConnell, 858 S.W.2d at 342). Because Appellees’ no-evidence motion for summary judgment on Gustafson’s corporate veil piercing theory is insufficient, we sustain this issue.8
Since Gustafson does not challenge the dismissal of his gross negligence claim, we affirm the judgment as to that claim. Genuine issues of material fact exist regarding CMS’s entitlement to the TWCA exclusive remedy defense as a “co-employer” under the former SLSA or the current PEOA, under section 93.004, and under a borrowed servant theory, precluding summary judgment. Further, Appellees’ no-evidence motion for summary judgment on the corporate veil piercing claim was insufficient. Therefore, the trial court improperly granted summary judgment. We reverse and remand for further proceedings.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
Ronald Smith is the owner of CMS, and Oletha Smith is his wife.
Gustafson pleaded a gross negligence claim, and despite Appellees’ failure to address that claim in the summary judgment motion, the trial court granted summary judgment on that claim. However, Gustafson states in his brief he is not appealing the summary dismissal of his gross negligence claim.
Although Appellees asserted in their summary judgment motion that they “maintained insurance for employees injured on the job, but those claims were denied” based on Smith’s deposition testimony, notably they do not specify this was workers’ compensation insurance. Rather, the first time a certificate of insurance appears is in CMS’s reply to Gustafson’s summary judgment response. The insurance certificate shows it was a policy for accidents or occupational injury for CMS employees, but expressly states in bold that it is not a workers’ compensation policy.
Gustafson also objected to certain evidence attached to the Appellees’ summary judgment reply, but the record does not establish he ever obtained rulings on those objections. In his brief on appeal, Gustafson again contends that Appellees first raised these arguments in their reply.
Note 3, infra.
Covered employees under the PEOA are distinct from “temporary help” which is not included under the provision of “professional employer services.” See id. § 91.001(14). Excluded “temporary help” is defined as “an arrangement by which an organization hires its own employees and assigns them to a company to support or supplement the company’s work force in a special work situation” such as employee absence, temporary skill shortage, seasonal work, or a special project. See id. § 91.001(16).
While the El Paso Court of Appeals determined in Robles v. Mount Franklin Food, L.L.C. that the defendant was entitled to summary judgment against a temporary worker based on the exclusive remedy provision, we note a key distinction. 591 S.W.3d 158 (Tex. App.—El Paso 2019, pet. denied). There, the defendant’s summary judgment motion asserted that the temporary employee’s receipt of benefits under the temporary employment’s service’s workers’ compensation policy barred recovery against it. See id. at 161. That is not the case here where Appellees made that specific argument for the first time in their reply. Moreover, in Robles, the client company’s human resources officer supported the summary judgment with an affidavit that averred the temporary employment agency assigns “temporary employees to work temporary employee positions” at their facility per an agreement between the two. No such affidavit exists here.
Based on resolution of his first four issues, we need not address Gustafson’s fifth issue as it would afford him no greater relief. See Tex. R. App. P. 47.1.
Court of Appeals of Texas, Beaumont.
VEL HOLDINGS, LLC, Appellant
MILHORN DEVELOPMENT, LLC, Appellee
Submitted on January 2, 2019
Opinion Delivered July 11, 2019
On Appeal from the 356th District Court, Hardin County, Texas, Trial Cause No. 58156, Steven R. Thomas, Judge.
Attorneys & Firms
John R. Woodward, Woodward and Shaw, Dallas, TX, for VEL Holdings, LLC.
M.C. Carrington, Mehaffy Weber, PC, Beaumont, TX, for Milhorn Development, LLC.
Before Johnson, JJ.
CHARLES KREGER, Justice
*1 Appellant VEL Holdings, LLC (VEL) appeals the trial court’s order granting summary judgment on Milhorn Development, LLC’s (Milhorn) declaratory judgment action. See generally Tex. Civ. Prac. & Rem. Code Ann. § 37.001–.011 (West 2015). In two issues, VEL asks (1) whether Milhorn had standing to bring its cause of action in the trial court, and (2) whether the trial court erred “in granting Milhorn’s Motion for Summary Judgment and Declaratory Judgment when it ruled that Claire Oil and Gas, Inc. did not own any oil and gas leases covering all or a portion of the described lands in the July 2, 2014 Deed of Trust[.]” We affirm the trial court’s judgment.
On March 1, 2006, WFMMS, Inc. assigned oil and gas leases of Lots fourteen through thirty-one as described in an Agreement between S.R. Buchanan and B.G. Dowell, et al., dated December 8, 1927, to Claire. On March 15, 2011, Claire and Vanguard Energy Corporation (Vanguard) entered into a farmout letter agreement whereby Vanguard would “conduct further operations for the exploration and development of said land for the mutual benefit of [Claire] and [Vanguard.]” The farmout letter agreement described the property as “100 acres, more or less, out of the Josephine Milhorn Survey, A-387, Hardin County, Texas, sometimes referred to as the Tomlinson Unit, and being Lots 14 through 31 described in an instrument dated March 29, 2006, from WFMMS, Inc. to Claire[.]” The farmout letter agreement between Claire and Vanguard outlined the terms for percentages earned, drilling test wells, number of wells to be drilled, operations, extensions and renewals, plugging and abandoning wells, and termination of the agreement, among other things. Thereafter, on April 18, 2011, Claire and Vanguard executed a memorandum of farmout agreement containing the same property description which referenced the farmout letter agreement between the parties. The parties recorded the memorandum of farmout agreement in the real property records of Hardin County on April 20, 2011.
On June 26, 2012, Claire executed a Quitclaim Deed conveying its interests in the leased property to Wendy Southerland. This conveyance expressly provided that it was subject to the March 15, 2011 farmout agreement between Claire and Vanguard. On December 20, 2012, Southerland and Vanguard agreed in writing to extend the March 15, 2011 farmout agreement previously made between Claire and Vanguard. This extension provided that Southerland waived any requirement regarding the number of wells to be drilled through the date of the letter. Further, the extension additionally reduced the number of wells Vanguard had to drill from six wells to three. With the exception of those amendments, the prior farmout agreement remained “in force and effect in accordance with its terms.”
On June 13, 2014, Vast Exploration (Vast), a successor in interest to Vanguard, executed a deed of trust for a $6.9 million promissory note held by VEL. As security for the note, Vast used its “interest” in five of the oil and gas leases at issue, in addition to interests it held in other unrelated leases. Specifically, the description indicated the security interest attached to
*2 [a]ll those oil and gas leases owned by Dr. Michael C. Holmes, WFMMS, Inc., and/or Claire Oil and Gas, Inc. covering all or a portion of the following described lands:
100 acres, more or less, out of the Josephine Milhorn Survey, A-387, Hardin County, Texas, sometimes referred to as the Tomlinson Unit, and being Lots 14 through 31 described in an instrument dated March 29, 2006, from WFMMS, Inc. to Claire[.]
VEL ultimately foreclosed on the note. The substitute trustee executed a deed, assignment, conveyance, and bill of sale on April 4, 2017, each using the same property description as the original deed of trust. Vast was the grantor, and VEL was the grantee, with the stated consideration of a $2 million credit on the deed of trust.
Prior to the foreclosure and Vast’s conveyance to VEL, Southerland entered into a separate farmout agreement with Milhorn covering the same property interests and expressed that the prior agreement between Southerland and Vanguard “expired and/or terminated in accordance with their terms prior to Milhorn’s acquisition of any rights in such agreement(s).” Following the foreclosure, VEL advised Sunoco of the title dispute. Upon learning of the dispute, Sunoco withheld further revenue payments to Milhorn until the parties resolved the dispute.
Milhorn filed suit for declaratory judgment and to quiet title.1 VEL’s answer contained a general denial. Milhorn later moved for summary judgment on its declaratory judgment claim and sought “summary judgment that Milhorn is the rightful owner of the mineral interests subject to the Farmout Agreement.” In the trial court, in its response to the summary judgment motion, VEL argued that Vanguard’s interest in the mineral leases continued despite Claire’s conveyance (by Quitclaim Deed) to Southerland. VEL argued that the Vanguard farmout agreement predated the conveyance from Claire to Southerland, and Southerland purchased her interests from Claire subject to the farmout agreement; however, VEL did not challenge the validity of the Claire Quitclaim Deed to Southerland in its summary judgment response. The trial court granted Milhorn’s motion for summary judgment. The summary judgment order contained the following declarations:
1. VEL Holding’s Deed of Trust would have only attached, if at all, to leases owned by Dr. Michael C. Holmes, WFMMS, Inc., and/or Claire Oil and Gas, Inc. on July 2, 2014.
2. Dr. Michael C. Holmes, WFMMS, Inc., and/or Claire Oil and Gas, Inc. did not own any oil and gas leases covering all [or] a portion of the described lands in the July 2, 2014 Deed of Trust.
3. Defendant VEL Holdings has no property or lien interest in any oil and gas leases owned by Wendy Southerland.
4. Milhorn Development, LLC’s interest in the oil and gas leases owned by Wendy Southerland is and was unaffected by the foreclosure sale conducted by VEL Holdings.
The trial court also awarded Milhorn $15,000.00 in attorney’s fees. On appeal, VEL challenges Milhorn’s standing to sue and only the trial court’s summary judgment declaration that “Claire Oil and Gas, Inc. did not own any oil and gas leases covering all [or] a portion of the described lands in the July 2, 2014 Deed of Trust.”2
II. Standard of Review
*3 “In reviewing a declaratory judgment, we refer to the procedure for resolution of the issue at trial to determine the applicable standard of review on appeal.” Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996).
A. Milhorn’s Standing
In its second issue, VEL asserts that Milhorn lacked standing to bring a cause of action. Since the question of standing implicates jurisdiction, we address this issue first. See Neeley v. West Orange-Cove Consol. Indep. Sch. Dist., 176 S.W.3d 746, 774 (Tex. 2005).
VEL foreclosed on a deed of trust which purported to create a security interest in the mineral leases at issue. Milhorn’s original petition claimed that “[b]ecause of Defendant’s interference with Plaintiff’s proper ownership, Plaintiff has suffered actual damages.” In its motion for summary judgment, Milhorn asserted that by proceeding with the foreclosure sale and notifying Milhorn’s first purchaser it was the valid owner of the property, VEL interfered with its rights. Milhorn asserted in its summary judgment motion that VEL’s conduct caused it to suffer a suspension of revenue payments until the title dispute was resolved. As part of its summary judgment evidence, Milhorn submitted the affidavit of its president which described the suspension of its revenue payments caused by the dispute.
Because Milhorn claimed a distinct injury due to VEL’s conduct in the form of interrupted revenue payments and sought judicial resolution of the dispute over ownership interest in the leases, it had standing to maintain a suit against VEL. See Brown, 53 S.W.3d at 305. We overrule VEL’s second issue.
B. Trial Court’s Summary Judgment and Declaration as to Claire’s Interest
*4 We now turn to VEL’s remaining issue. The only declaration VEL challenges on appeal from the trial court’s summary judgment order is that “Claire Oil and Gas, Inc. did not own any oil and gas leases covering all or a portion of the described lands in the July 2, 2014 Deed of Trust[.]” Accordingly, we confine our review to this issue. See Sonat Expl. Co. v. Cudd Pressure Control, Inc., 271 S.W.3d 228, 236 (Tex. 2008) (citations omitted) (noting that an appellate court cannot reverse on a ground an appellant has never raised). In support of its issue, VEL argues that Milhorn based its summary judgment motion on the assumption that the Claire-Southerland Quitclaim Deed was valid. VEL did not challenge the validity of the Quitclaim Deed in response to Milhorn’s motion for summary judgment but, VEL asserts for the first time on appeal, the Claire-Southerland Quitclaim Deed is void because it fails to satisfy the statute of frauds or statute of conveyances.
VEL is not a party to the instrument. Even if we assume without deciding that VEL had standing to challenge the conveyance, the statute of frauds and statute of conveyances are affirmative defenses that must be pleaded. See Tex. R. App. P. 33.1.
We conclude Milhorn had standing to bring its lawsuit against VEL, and because VEL failed to preserve the issue of the Claire-Southerland Quitclaim Deed’s validity by raising it in the trial court, we are precluded from reaching its merits. See Garcia, 311 S.W.3d at 44. Accordingly, we affirm the trial court’s judgment.
VEL did not file special exceptions in the trial court, did not complain in its summary judgment response, and does not raise an issue on appeal regarding Milhorn’s use of a declaratory judgment action in the underlying litigation. See Tex. R. App. P. 47.1.
VEL does not challenge any other declaration contained in the trial court’s summary judgment order.
Court of Appeals of Texas, Beaumont.
IN RE INVISTA S.A.R.L.
Submitted on September 21, 2018
Opinion Delivered November 1, 2018
On Appeal from the 136th District Court, Jefferson County, Texas, Trial Cause No. D-201,939, Baylor Wortham, Judge
Attorneys & Firms
David L. Villarreal, McDowell Hetherington LLP, Houston, TX, for Relator.
Daniel E. Sheppard, Morrow & Sheppard LLP, Houston, TX, for Real Party in interest.
Before Johnson, JJ.
*1 Relator INVISTA S.à.r.l. (“INVISTA”), a respondent1 in a Rule 202 proceeding in Cause Number D-201,939, Jacqulyn McDonald, Individually and as Representative of the Estate of David Lee McDonald v. INVISTA S.à.r.l. d/b/a INVISTA S.à.r.l., LLC, et al., seeks a writ of mandamus compelling the Honorable Baylor Wortham, Judge of the 136th District Court, to vacate his order requiring INVISTA to produce a witness or witnesses for deposition and subpoena duces tecum. See Tex. R. Civ. P. 202. For the reasons explained herein, we conditionally grant the writ of mandamus.
The real party in interest, Jacqulyn McDonald, alleges that her father, David Lee McDonald,2 died of cancer due to overexposure to a toxic substance while working during a turnaround at INVISTA’s facility in Orange, Texas. McDonald filed a verified petition for Rule 202 discovery, in which she asserted that INVISTA was involved in or has knowledge of decedent’s exposure to toxic substances that caused or contributed to his death. In her petition, McDonald sought the following:
depositions, documents, and electronic materials referencing or related to (1) any exposure to butadiene and/or another toxic substance while [decedent] was at Respondents’ facility and/or working for Respondents; (2) companies and persons involved in the exposure as well as the manufacture and/or maintenance of the substances, equipment, fixtures, area, materials, and appurtenances involved; and (3) any related investigations including internal and by third parties and governmental entities.
McDonald’s petition stated that she sought “all emails, electronic information, documents, and other tangible evidence in Respondent[’]s possession or to which it has access that references or relates to these issues[,]” as well as the depositions of respondent Eric Hinton and an INVISTA corporate representative.
McDonald asserted that the discovery would reveal information and documents “related to potential wrongful death and survival claims, as well as potential defendants.” According to McDonald, the requested discovery would prevent a failure or delay of justice by allowing her to “evaluate potential claims and secure information regarding proper parties[,]” and she asserted that the requested discovery is narrowly tailored to the issues and facts underlying her potential claims. McDonald also contended that the benefit of the discovery would outweigh “any burden or expense.”
INVISTA filed a response, in which it raised a general denial and asserted that the trial court lacked subject-matter jurisdiction. INVISTA also argued that McDonald had failed to exhaust her administrative remedies, and that the discovery McDonald sought is outside the scope of Rule 202. Additionally, INVISTA contended that McDonald’s petition failed to demonstrate that the benefit of the requested discovery outweighed its burden and expense and that the requested discovery would prevent a failure or delay of justice. INVISTA also filed an objection to McDonald’s Rule 202 petition, in which it reiterated the objections in its response and provided argument and authorities.
*2 McDonald filed a response to INVISTA’s objections, in which she provided argument and authorities for her assertions that the trial court has subject-matter jurisdiction; the exhaustion of remedies doctrine does not apply to possible claims against non-employer tortfeasors; INVISTA had not shown that it was decedent’s employer; Rule 202 permits discovery of documents in conjunction with nonparty depositions; and INVISTA had not demonstrated undue burden. On August 29, 2018, the date of the Rule 202 hearing, McDonald filed a supplement to her Rule 202 petition, in which she stated that INVISTA “engaged in intentional, grossly negligent, and negligent acts and omissions that caused or contributed to [decedent]’s exposure and wrongful death.” In the supplemental petition, McDonald also alleged that “persons and companies other than [decedent]’s employer committed acts and/or omissions that caused or contributed to his exposure and wrongful death, including contractors, manufacturers, other companies, and persons who owed independent duties to [decedent]. Respondents apparently have exclusive access to this information and refuse to disclose it.”
Attached to the supplemental petition was a document that purportedly constituted correspondence between McDonald and a person who represented that he had worked with the decedent. In that document, the alleged coworker asserted that (1) both he and the decedent were exposed to a carcinogenic chemical; (2) blood samples taken from both after the exposure were deemed unsuitable; (3) “they needed new samples ... because the results were really bad and they didn’t want to be liable[;]” and (4) the decedent told him that the nurse and “one of the head safety guys” asked the decedent if he was “okay” two or three weeks after the exposure and told the decedent there were “some unusual results in his blood work.” Also attached to the supplemental petition was an affidavit, signed by McDonald’s counsel, which stated that the document was a “true and accurate copy of correspondence between [McDonald] and a person who represented himself to be [decedent]’s coworker.”
As discussed above, on August 29, 2018, the trial court conducted a hearing on McDonald’s Rule 202 petition. At the hearing, the trial court heard arguments of counsel, but no evidence was offered. The next day, McDonald’s counsel filed a letter with the court, attached to which was McDonald’s sworn declaration, in which she stated, among other things, that (1) the benefits department told her that the decedent was employed by Invista; (2) the alleged co-worker referenced above had contacted her and informed her that he and the decedent had been exposed to butadiene, which “is known to cause cancer[;]” (3) that blood tests had been conducted and “people involved seemed to be covering up what had happened[;]” (4) the decedent “was told there were unusual results in his blood work[;]” (5) the decedent’s sister told McDonald that the decedent said he had been offered “hush money[;]” and “[t]he OSHA website says an investigation was opened into the Invista facility in Orange, Texas shortly after we filed the petition to take pre-suit discovery.”
The trial court signed an order granting McDonald’s Petition for Rule 202 discovery.3 In its order, the trial court stated that it had considered “all evidence, briefing, argument, and all other various materials presented by counsel,” including the petition for Rule 202 discovery, McDonald’s supplement to the petition, McDonald’s declaration, the attorney verifications, and all exhibits. The trial court found that (1) permitting McDonald to take the requested depositions and to secure documents and materials “may prevent a failure or delay of justice in an anticipated suit[,]” and (2) the likely benefit to McDonald “outweighs the burden or expense of the procedures.” The trial judge ordered INVISTA to present “a witness or witnesses” for oral deposition who could testify regarding McDonald’s alleged exposure to butadiene or other toxic substances; persons and entities who were onsite at the location of the incident or who controlled the location; “persons and entities involved in the custody, control, manufacture, construction, modification, maintenance, and/or inspection of the substances, equipment, fixtures, area, materials, and appurtenances involved in the [i]ncident;” and investigations into the incident, including “what persons and entities may have been involved or otherwise responsible for the [i]ncident.” In addition, the trial judge ordered INVISTA to produce at the deposition (1) any report regarding the incident, (2) documentation reflecting persons and entities onsite where the incident occurred, and (3) materials the witness or witnesses reviewed to prepare for the deposition.
*3 At the hearing, the trial judge stated as follows to INVISTA’s counsel:
[U]nless there is something you can articulate for me here in court on the record as to a materially disadvantageous or prejudicial effect that that supplemental filing would have on your ability to defend the 202 hearing or to be able to represent your client, I don’t believe that I have any discretion to deny them leave for the late filing. I agree with you the rules do say 15 days, although it’s not hard and fast.
The trial court’s written order did not contain a finding that justice or necessity required shortening the notice period under Rule 202. See Tex. R. Civ. P. 202.3(d).
STANDARD FOR MANDAMUS REVIEW
Mandamus is available when a trial court clearly abuses its discretion and the relator lacks an adequate remedy by appeal. In re Hewlett Packard, 212 S.W.3d 356, 360 (Tex. App.—Austin 2006, orig. proceeding [mand. denied] ).
In issue four, which we address first, INVISTA argues that the trial court lacked subject-matter jurisdiction to enter the order because McDonald did not exhaust her administrative remedies under the Texas Workers’ Compensation Act. Although the Texas Workers’ Compensation Act vests the power to award compensation benefits solely in the Workers’ Compensation Commission, subject to judicial review, judicial review is not available until the aggrieved party has exhausted its administrative remedies. See Office Emp. Int’l Union Local 277, AFL-CIO v. Sw. Drug Corp., 391 S.W.2d 404, 406 (1965) ). Because a petition for presuit deposition “does not request final or even preliminary adjudication[,]” it does not interfere with the exclusive jurisdiction of an administrative agency. Id. Therefore, the exhaustion of administrative remedies doctrine does not apply, and the trial court has subject-matter jurisdiction of McDonald’s Rule 202 petition. See id. Accordingly, we overrule issue four.
In its first issue, INVISTA asserts that the trial court abused its discretion by granting McDonald’s Rule 202 petition because McDonald did not offer, nor did the trial court admit, any supporting evidence at the hearing. “A trial court abuses its discretion by ordering a presuit deposition if the petitioner does not make the showing required by [R]ule 202.” In re Jorden, 249 S.W.3d 416, 423 (Tex. 2008) (orig. proceeding).
*4 McDonald argues that Rule 202 requires the filing of a verified petition, but it does not mention or require “evidence.” According to McDonald, rules of statutory construction require the Court to presume that evidentiary requirements “were excluded for a purpose.” Additionally, McDonald asserts that the “authenticated text messages,” “various pleadings[,]” and verifications are not hearsay because they are not used to prove the truth of the matters asserted therein. McDonald asserts that the statements are instead being used to demonstrate a good faith basis for conducting the requested discovery, to show that the benefit of conducting the discovery outweighs the burden, and that the requested discovery “will prevent a failure of justice in an anticipated suit.” Furthermore, McDonald argues that even if the statements constituted hearsay, exceptions to the hearsay rule would permit their admission into evidence.
As the petitioner, McDonald had the burden to show either that allowing her to take the depositions would prevent a failure or delay of justice in an anticipated suit, or that the likely benefit of allowing her to take the requested depositions to investigate a potential claim or suit outweighs the burden or expense of the procedure. In re Dallas Cnty. Hosp. Dist., No. 05-14-00249-CV, 2014 WL 1407415, at *2 (Tex. App.—Dallas Apr. 1, 2014, orig. proceeding) (mem. op.).
We conclude that McDonald’s verified pleadings do not constitute proper evidence supporting her Rule 202 petition. See id. In addition to reliance upon her verified pleadings, McDonald points to the text messages and verifications as evidentiary support for her petition. Assuming without deciding that the trial court did not abuse its discretion by considering McDonald’s late-filed declaration and the text messages, neither of which was introduced at the hearing, both McDonald’s declaration and the text messages from the decedent’s co-worker contain hearsay. See Tex. R. App. P. 47.1.
In sum, we conclude that the trial judge’s order constitutes an abuse of discretion because McDonald did not provide evidence supporting her petition, and INVISTA has no adequate remedy at law. We conditionally grant the writ of mandamus. We are confident that the trial court will promptly vacate its order of August 31, 2018, which required INVISTA to produce a witness for deposition and subpoena duces tecum, and the writ will issue only if the trial court fails to do so. Our stay order issued on September 11, 2018, is lifted.
*5 PETITION CONDITIONALLY GRANTED.
Another respondent, Eric Hinton, did not seek mandamus relief.
Because the real party in interest and the decedent share the same last name, we will refer to the real party in interest as “McDonald” and to her father as “decedent.”
The order in the electronically filed sworn mandamus record is not dated; however, INVISTA stated in its motion for emergency stay that the trial judge signed the order on August 31, 2018.
Court of Appeals of Texas, Beaumont.
AMERIGAS PROPANE, L.P., Appellant
Jose Francisco ABOYTES-MUÑIZ, Andy Medina-Cardenas and Bernabe Bustillo-Rivera, Appellees
Submitted August 8, 2018
Opinion Delivered May 16, 2019
On Appeal from the 284th District Court, Montgomery County, Texas, Trial Cause No. 15-09-09003-CV, Cara Wood, Judge.
Attorneys & Firms
Byron C. Keeling, Keeling and Downes, PC, Houston, for Appellant.
Dale W. Felton, Navasota, Lisa J. Mathews, Conroe, for Appellee.
Before Johnson, JJ.
LEANNE JOHNSON, Justice
*1 This is a permissive appeal of a grant of a partial no-evidence motion for summary judgment and the denial of a traditional motion for summary judgment in a lawsuit concerning a workplace injury. The Appellees allege that they were injured at AmeriGas Propane, L.P.’s (AmeriGas or Defendant) propane-filling facility in Conroe, Texas. This Court previously entered an order accepting the permissive appeal. See (f) (West Supp. 2018).1 We reverse and remand.
The record before us indicates that AmeriGas Propane, L.P. is a limited partnership organized in Delaware. AmeriGas Propane, Inc. (AG Inc.) is the general partner of AmeriGas Propane, L.P. AmeriGas Propane, L.P. is a subsidiary of UGI Corporation (UGI).
According to the record before us, Defendant AmeriGas Propane, L.P. owns and operates the “AmeriGas Cylinder Exchange” facility in Conroe, Texas, where, as AmeriGas explains, empty propane tanks are delivered, cleaned, refilled with propane, and redistributed for sale. On November 6, 2012, while workers at the AmeriGas Cylinder Exchange were refilling the tanks, gas escaped, ignited, and caused a fire. Several of the workers, including Roberto Cabrera (Roberto), Jose Francisco Aboytes-Muñiz (Jose), Andy Medina-Cardenas (Andy), and Bernabe Bustillo Rivera (Bernabe) allege they sustained injuries from the accident.
In August of 2015, Roberto filed an original petition against defendant AmeriGas Propane, L.P., alleging that he was injured at the AmeriGas facility and asserting tort claims against AmeriGas. Appellant and Appellees state in their briefs that AmeriGas Propane, L.P. and Roberto settled and therefore Roberto is not a party to this appeal. We discuss any other facts relating to Roberto herein only as necessary to the issues on appeal.
In September of 2015, Jose, Andy, and Bernabe (collectively “Intervenors”) filed petitions in intervention in Roberto’s lawsuit against AmeriGas. In their petitions, Intervenors alleged claims against AmeriGas for premises liability, negligence, and gross negligence arising out of the accident. AmeriGas filed an answer and asserted a general denial and affirmative defenses of statute of limitations and exclusive remedy under the Texas Workers’ Compensation Act (TWCA).
No-Evidence Motion for Summary Judgment
In 2016, Roberto filed a no-evidence motion for partial summary judgment, which was joined by the Intervenors, in which Roberto and the Intervenors argued that “[t]here is no evidence that AmeriGas Propane, L.P., was a named insured subscriber to a policy of workers’ compensation insurance at the time of the incident made the basis of this suit.” AmeriGas filed a response and a counter-motion for summary judgment as to Roberto only. AmeriGas explained in its response that it is a subsidiary of the parent corporation UGI, which operates various energy and utilities businesses. AmeriGas alleged that UGI’s domestic propane business is conducted through AmeriGas, and that AmeriGas’s general partner is AG Inc. According to AmeriGas, it is the operating partnership and holds title to the real property involved in the accident at issue in this lawsuit. But, AG Inc. manages AmeriGas’s operations and payroll and executes contracts on behalf of AmeriGas. According to AmeriGas, it can only act through AG Inc., its general partner.
*2 AmeriGas argued that it was insured under a workers’ compensation policy obtained by UGI and issued by ACE Indemnity Insurance Company of North America (ACE), policy number C46784583, and the policy did not specifically name AmeriGas as a named insured due only to an administrative error. AmeriGas further argued that it paid insurance premiums on policy C46784583, that an endorsement was issued at a later date naming AmeriGas as a named insured on policy C46784583 in order to correct the administrative error, and that AmeriGas had paid and Roberto had accepted over $ 500,000 in workers’ compensation benefits under policy C46784583. AmeriGas supported its response and counter-motion with affidavits and documents.
Intervenors filed a reply in which they argued that policy C46784583 named UGI Corporation and AmeriGas Propane, Inc., but not AmeriGas Propane, L.P. Intervenors also argued that the endorsement that was added to the UGI policy in 2016 was an attempt to “retroactively change the policy” three years after the policy had expired. The Intervenors attached an affidavit from Brad McClellan, an attorney who is board certified in workers’ compensation law, who opined that the mutual mistake argument and the retroactive revision to the UGI policy should not be allowed. The trial court entered an Order dated November 28, 2017, granting Plaintiff and Intervenors’ partial no-evidence motion for summary judgment and denying AmeriGas’s counter-motion for traditional summary judgment as to Roberto.
AmeriGas’s Traditional Motion for Summary Judgment as to Intervenors
Thereafter, AmeriGas filed a traditional motion for summary judgment on the Intervenors’ claims, which incorporated by reference evidence and pleadings previously submitted with its response to the partial summary judgment and counter-motion against Roberto. AmeriGas argued that, at the time of the incident, Intervenors were employed by F.W. Services, Inc., which was doing business as Pacesetter Personnel Services (Pacesetter). According to AmeriGas, Pacesetter had a workers’ compensation policy that covered the Intervenors, and the policy contained an “Alternate Employer Endorsement” that states that workers’ compensation “will apply as though the alternate employer is insured.” AmeriGas also argued it had workers’ compensation coverage through its own insurer at the time of the incident. AmeriGas attached additional affidavits and documents as evidence of coverage under its own policy, including a certificate of insurance, information from the underwriting file, and AmeriGas’s payroll data used to determine premiums.
Jose filed a response to AmeriGas’s motion for summary judgment in which he argued that AmeriGas cannot claim coverage under Pacesetter’s workers’ compensation policy because Pacesetter and AmeriGas did not execute a written staff leasing contract and the Alternate Employer Endorsement does not name or refer to AmeriGas. Jose also argued that AmeriGas’s motion for summary judgment merely restated the same arguments and presented the same evidence that the trial court had already considered and rejected. Jose asserted that “[i]t is undisputed that AmeriGas Propane, L.P. was not listed as a named insured on a workers’ compensation policy at the time these workers were injured[ ]” as required by law.
Andy and Bernabe also filed a joint response to AmeriGas’s motion for summary judgment. Therein, Andy and Bernabe argued that the question whether AmeriGas had workers’ compensation insurance at the time of the incident had already been decided in the Intervenors’ favor. Andy and Bernabe also argued that any evidence concerning Pacesetter’s workers’ compensation policy was untimely filed and should be excluded. The Intervenors argued that the Alternate Employer Endorsement in Pacesetter’s policy does not apply to AmeriGas by its plain terms because there was no evidence of a staff leasing services agreement between Pacesetter and AmeriGas, and there was no evidence that Pacesetter held a staff leasing license.
*3 AmeriGas contends that the Intervenors were employees of Pacesetter and borrowed servants of AmeriGas. In contrast, the Intervenors collectively argue that they were hired by Pacesetter but sent to the AmeriGas facility where they worked as “long-term employees” of AmeriGas. AmeriGas further contends that it was the Intervenors’ “alternate employer[ ]” and that it supervised the Intervenors, controlled the details of their work, and owned the premises and equipment where the work was performed.
In his response to AmeriGas’s motion for summary judgment, Jose agreed that AmeriGas supervised and controlled the work site and his work but Jose argued he was a “long-term employee” of AmeriGas. Jose testified in his deposition that he was employed by Pacesetter but AmeriGas employees were his bosses. In his amended petition, he alleged that “[a]t all times material to this case, AmeriGas Propane, L.P., employed [Jose] to work at a liquid propane cylinder filling facility in Conroe, Montgomery County, Texas.”
In their response to AmeriGas’s motion for summary judgment, Andy and Bernabe argued that their continuous employment for about half a decade at the AmeriGas facility reflected that their employment was “long-term or continuing” and not “temporary.” In his deposition, Andy testified that his paychecks came from Pacesetter, but he received them at the AmeriGas offices and he had never been to Pacesetter’s office. Bernabe testified that he worked at AmeriGas about six years before the accident and that he did not know who Pacesetter was.
Mark Birenbaum, Vice President of the Payroll Division for Pacesetter, attested in his affidavit that Pacesetter’s records show that Andy and Bernabe were hired by Pacesetter and assigned to work at AmeriGas in Conroe. Birenbaum also stated that when Pacesetter’s employees are employed at third-party facilities, the third-party client directs, controls, and supervises the work. Steven Richard, Operations Manager for AmeriGas in Conroe, attested in his affidavit that he supervised the activities of Andy and Bernabe at the time of the incident.
Order Denying AmeriGas’s Motion for Summary Judgment and Granting Permissive Appeal
AmeriGas filed a motion for reconsideration of the trial court’s November 28, 2017 order granting Roberto’s and the Intervenors’ no-evidence motion for partial summary judgment and, as an alternative, a motion to amend the order dated November 28, 2017, to certify the question for interlocutory appeal. In March of 2018, the trial court signed an order denying AmeriGas’s traditional motion for summary judgment, denying AmeriGas’s motion for reconsideration as to the grant of the partial summary judgment filed by the Intervenor, and amending the November 28, 2017 order to allow for an interlocutory appeal. The trial court then granted an interlocutory appeal and identified the following controlling questions of law for appeal:
Whether AmeriGas Propane, L.P., was an insured on November 6, 2012, under the workers’ compensation policy issued to FW Services, Inc., and is therefore entitled to assert the exclusive remedy provision of the Texas Worker s’ Compensation Act[; and]
Whether AmeriGas Propane, L.P., was an insured on November 6, 2012, under the workers’ compensation policy issued to UGI Corporation and is therefore entitled to assert the exclusive remedy provision of the Texas Workers’ Compensation Act.
The trial court further stated:
The basis for the court’s rulings herein is that defendant has offered no evidence that it was covered under a policy of workers’ compensation insurance on the date the intervenors were injured, and therefore, defendant is not entitled to assert the exclusive remedy defense of the Texas Workers’ Compensation Act.
Standard of Review
*4 Unless a statute specifically authorizes an interlocutory appeal, appellate courts have jurisdiction only over final judgments. CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011)).
We review a summary judgment de novo. See Lance v. Robinson, 543 S.W.3d 723, 732 (Tex. 2018) (explaining that a trial court does not err by relying on summary judgment evidence on file prior to the summary judgment hearing even though filed prior to the instant summary judgment record).2
A partial summary judgment is interlocutory and becomes final upon disposition of the other issues in the case. See Woods MFI, LLC v. PlainsCapital Bank, No. 14-15-00655-CV, 2016 WL 6465872 at *11, 2016 Tex. App. LEXIS 11785 at *35 (Tex. App.—Houston [14th Dist.] Nov. 1, 2016, pet. denied) (mem. op.) (explaining that an interlocutory summary judgment order may be reconsidered at any time, even without notice to the parties).
Texas Workers’ Compensation Act
*5 The TWCA permits a subscribing employer’s injured employee to recover benefits for work-related injuries on a no-fault basis. See Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238, 241 (Tex. 2012).
The [TWCA] was adopted to provide prompt remuneration to employees who sustain injuries in the course and scope of their employment. ... The act relieves employees of the burden of proving their employer’s negligence, and instead provides timely compensation for injuries sustained on-the-job. ... In exchange for this prompt recovery, the act prohibits an employee from seeking common-law remedies from his employer, as well as his employer’s agents, servants, and employees, for personal injuries sustained in the course and scope of his employment.
Casados, 358 S.W.3d at 241.
“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage ... against the employer ... for ... a work-related injury sustained by the employee.” Warnke v. Nabors Drilling USA, L.P., 358 S.W.3d 338, 343 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (op. on reh’g).
Were the Intervenors “Employees” of AmeriGas under the TWCA?
The evidence shows that Pacesetter hired Intervenors and assigned them to work at the AmeriGas facility for AmeriGas, but AmeriGas controlled the details of the work performed by Intervenors at the AmeriGas Facility. By the express terms of the employment agreements between Intervenors and Pacesetter, the Intervenors were informed that “[t]he entity to which you are assigned is able to direct and control your activities that happen at the work site.” The Intervenors stated in their pleadings that they were AmeriGas’s employees:
At all times material to this case, AmeriGas Propane, L.P.[ ] employed [Intervenors] [Andy] and [Bernabe] to work at a liquid propane cylinder filling facility in Conroe, Montgomery County, Texas .... As employees of AmeriGas, [Andy] and [Bernabe] were invitees on the AmeriGas premises.
At all times material to this case, AmeriGas Propane, L.P. employed [Intervenor] [Jose] to work at a liquid propane cylinder filling facility in Conroe, Montgomery County, Texas .... As an employee of AmeriGas, [Jose] was an invitee on the AmeriGas premises.
Under the TWCA, an employee may have more than one employer, and each employer who subscribes to workers’ compensation insurance may raise the exclusive remedy provision as a bar to the employee’s claims. See Garza, 161 S.W.3d at 475.
*6 We conclude that there is no disputed material issue of fact concerning whether AmeriGas was an employer of the Intervenors under the TWCA. Even after considering the undisputed evidence in a light most favorable to the nonmovants, the evidence established that AmeriGas had the right to control the Intervenors’ work. See Alvarado, 111 S.W.3d at 141.
Did AmeriGas Have Coverage Under a Workers’ Compensation Policy at the Time of the Accident?
To be entitled to the TWCA exclusive remedy defense AmeriGas must also prove it had workers’ compensation coverage at the time of the incident. See Garza, 161 S.W.3d at 475. In its motion for summary judgment, AmeriGas argued that it was covered by the Pacesetter workers’ compensation policy under the “Alternate Employer Endorsement” in the Pacesetter Policy. AmeriGas also argued that it had coverage under the UGI workers’ compensation policy.
AmeriGas admitted that the UGI policy did not list AmeriGas Propane, L.P. as a named insured but argued the failure to list AmeriGas Propane, L.P. was due to a mistake or an “administrative error” by the insurer, and AmeriGas was inadvertently omitted as a named insured on the policy document. The UGI policy AmeriGas submitted with its counter-motion against Plaintiff and incorporated into the traditional motion by reference, specifically named “UGI Corporation” and “AmeriGas Propane, Inc.” as named insureds. AmeriGas also argued in its cross-motion for summary judgment that “Roberto [ ] and three Intervenors ... combined, have collected approximately one million dollars in workers’ compensation benefits” as a result of the fire.
Was AmeriGas an Insured on November 6, 2012, Under the Workers’ Compensation Policy Issued to UGI and AmeriGas Inc., and Therefore Entitled to Assert the Exclusive Remedy Provision of the TWCA?
Intervenors’ argue that, as a matter of law, there is no evidence that coverage existed for AmeriGas under the UGI policy at the time of the injury. Intervenors contend that, in determining whether coverage exists, “[a] court is limited to the four-corners of the document, unless the document is ambiguous.” The Intervenors assert that the UGI policy unambiguously does not list AmeriGas as a name insured. AmeriGas argues that a defendant may prove coverage under a workers’ compensation policy with affidavits of coverage from an insurer, or a certificate of insurance, or an affidavit from the defendant itself. See, e.g., Warnke, 358 S.W.3d at 344 (concluding that an affidavit from an insurance carrier’s managing director attesting to coverage satisfied the employer’s burden to demonstrate subscriber status). AmeriGas argues that the omission of AmeriGas’s name from the UGI policy was the result of a mistake or an administrative error, and that AmeriGas provided uncontroverted evidence that established as a matter of law it had coverage under the UGI policy, or alternatively they presented some evidence that would create a fact issue as to whether they had coverage under the UGI policy.
*7 Generally, parol evidence is inadmissible to vary or contradict the terms of an unambiguous instrument. Butler, 137 S.W.3d at 213.
In this case, AmeriGas submitted evidence that ACE, UGI, and AmeriGas intended that AmeriGas be covered by the UGI policy at the time the policy was issued. Thomas Groves, Vice President and underwriter at ACE, attested that the UGI policy in effect on November 6, 2012, was intended to include AmeriGas as an insured along with UGI and AG Inc., and that the only reason AmeriGas was not specifically listed as a named insured on the policy was due to an administrative error on the part of ACE. In his deposition, Groves testified that in his review of the underwriting file, he saw combined payroll submission data for “AmeriGas” that was not split out for the various AmeriGas entities—AmeriGas Propane, Inc., AmeriGas Propane, L.P., and AmeriGas Partners, L.P. According to Groves, the UGI policy was priced to include “all entities of AmeriGas[ ]” and the policy should have provided workers’ compensation coverage to AmeriGas. Groves testified that the endorsement executed in 2016 was intended to correct the mistake because the underwriting file reflected that AmeriGas should have been included in the 2012 policy. Groves also testified that the policy was priced and rated to include AmeriGas and that AmeriGas had paid a premium to ACE for workers’ compensation coverage for July of 2012 to July of 2013. AmeriGas also submitted a copy of a “Policy Information Page Endorsement” for the UGI policy that was executed in 2016, which stated a policy period of “07-01-2012 to 07-01-2013[,]” and named “AmeriGas Propane, L.P.” as an insured.
AmeriGas submitted an affidavit by Paul Monaco, Risk Manager for UGI, wherein he attested that the UGI policy in effect on November 6, 2012, provided workers’ compensation coverage to AmeriGas. In his deposition, Monaco testified that the UGI policy was intended “to provide total protection for all employees of AmeriGas Propane.”
An affidavit and deposition transcript of Kathleen McGlynn, Manager of Risk and Corporate Insurance at UGI, was also submitted by AmeriGas. McGlynn stated that AmeriGas had paid premiums to Marsh USA, Inc. for workers’ compensation insurance for the period July 1, 2012 through July 1, 2013, and she testified that Marsh was the broker that negotiated the policy terms. McGlynn identified certain documents as records of premiums paid for this policy period, and these documents were also submitted as summary judgment evidence.
AmeriGas argues that “[a]ll injured parties applied for and promptly received workers’ compensation benefits.” However, AmeriGas does not cite to evidence in the record of payments it made to the Intervenors. In its counter-motion for summary judgment against Plaintiff Roberto Cabrera, which is incorporated by reference in its motion for summary judgment against the Intervenors, AmeriGas alleged that it had paid benefits to Roberto under the UGI workers’ compensation policy. Paul Monaco attested that Roberto had received workers’ compensation benefits under the UGI policy arising out of his on-the-job injury on November 6, 2012. In his deposition, Monaco testified that “we have paid out over $ 400,000 in benefits[ ]” to Roberto for the injury he sustained.
*8 Kathleen McGlynn stated in her affidavit that AmeriGas had paid over $ 400,000 in medical and indemnity benefits to Roberto under the UGI policy, and that AmeriGas contracted with Sedgwick Claims Management Services, Inc. (Sedgwick) to serve as its third-party administrator on the UGI worker’s compensation policy. Attached to McGlynn’s affidavit were copies of Sedgwick invoices to AmeriGas for payments made to Roberto, bank wire transfer authorizations from AmeriGas to Sedgwick, and bank wire transfer transactions from AmeriGas to Sedgwick. McGlynn attested that, pursuant to the workers’ compensation policy, AmeriGas had a $ 500,000 deductible. In her deposition, McGlynn identified an exhibit as invoices for payments made on behalf of AmeriGas by Sedgwick, and one page showed a total of “982,274.64[,]” Roberto’s name, and the other names were redacted. An invoice from Sedgwick to AmeriGas for the Activity Period of November 2012 noted “OK to pay[,]” and the invoice total of “$ 982,274.64[,]” exceeds the deductible amount of $ 500,000. McGlynn also identified another exhibit as an internal corporate insurance document that allocated invoice amounts dated “12/3/2012” for AmeriGas by line of business and insurance type and reflected a total of $ 982,274.64. In addition, McGlynn identified another exhibit as a bank statement showing the wire transfer in the amount of $ 982,274.64 paid from the AmeriGas bank account to Sedgwick. The exhibit included copies of other bank transfers from AmeriGas to Sedgwick, including one for $ 1,249,570.54 dated May 21, 2013.
The Intervenors did not dispute the evidence of workers’ compensation payments being made under the UGI policy to Roberto, nor did the Intervenors deny that they had also applied for and received workers’ compensation benefits under a policy. What remains unclear based on the record before us is whether Intervenors applied for and received workers’ compensation payments from the UGI policy or the Pacesetter policy. That said, the record includes undisputed evidence of payments made under UGI’s workers’ compensation policy to Roberto for injuries he sustained on November 6, 2012 at AmeriGas’s facility and total payments have been made exceeding the policy deductible. Evidence of these payments provides undisputed evidence that the UGI workers’ compensation policy provided workers’ compensation coverage for AmeriGas even though AmeriGas was not specifically named as an insured on the original policy. Cf. Restatement (Second) of Contracts § 202(4) (Am. Law Inst. 1981) (“Where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection is given great weight in the interpretation of the agreement.”).
In addition to evidence of workers’ compensation benefits having been paid to Roberto under the UGI policy, the record also includes undisputed evidence that ACE, UGI, and AmeriGas intended that AmeriGas be covered under UGI’s corporate workers’ compensation policy, that AmeriGas was not listed as a named insured due to an administrative error, that the policy was priced and rated to include AmeriGas, that AmeriGas paid premiums for coverage under the policy, and that after the administrative error was discovered in this litigation, an endorsement was executed in accordance with the original underwriting file to correct the error. On this record, we conclude that AmeriGas’s summary judgment evidence reflects that the parties’ true agreement was to cover AmeriGas as an insured, but that due to a mutual mistake, the policy document did not reflect the parties’ true intent. See Trahan v. Premcor Ref. Grp. Inc., No. 09-17-00005-CV, 2018 WL 3887634 at *5, 2018 Tex. App. LEXIS 6493 at *14 (Tex. App.—Beaumont Aug. 16, 2018, pet. denied) (mem. op.).3
*9 Once AmeriGas provided such evidence as outlined above regarding the UGI policy, the burden shifted to the Intervenors to disprove or raise an issue of fact as to at least one element of AmeriGas’s defense. See Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511 (Tex. 2014)). Here, the Intervenors did not dispute the evidence AmeriGas submitted. The uncontradicted evidence included payroll and employment information, testimony and documentation showing AmeriGas paid premiums for such coverage, and documents and testimony establishing that Roberto’s claims were administered and paid under the UGI policy. The Intervenors failed to disprove or raise a fact issue as to at least one element of the defense raised by AmeriGas and, therefore Intervenors failed to carry their burden of proof once the burden shifted to them. See id. at *5, 2018 Tex. App. LEXIS 6493 at *12, 2018 WL 3887634.
We conclude that, as a matter of law, AmeriGas was covered by a workers’ compensation policy and AmeriGas was the Intervenors’ employer for purposes of the TWCA. See id. at *5-6, 2018 Tex. App. LEXIS 6493 at **12-17, 2018 WL 3887634 (concluding that undisputed evidence of submission of payroll and employment information, payment of premiums, and payment and receipt of workers’ compensation established coverage under the TWCA and barred an employee’s negligence claims). Therefore, AmeriGas is entitled to assert the TWCA’s exclusive-remedy defense. See Trahan, 2018 WL 3887634, at **6, 2018 Tex. App. LEXIS 6493, at **15-16.
Because we have concluded that the summary judgment evidence supports a conclusion that on November 6, 2012, AmeriGas was an insured under the workers’ compensation policy issued to UGI Corporation, we need not determine whether AmeriGas was also an “alternate employer” and entitled to coverage under F.W. Services, Inc.’s policy because determination of the latter issue would not result in any greater relief. See Tex. R. App. P. 47.1.
Accordingly, we reverse and remand to the trial court for further proceedings consistent herewith.
REVERSED AND REMANDED.
We cite to current statutes herein unless subsequent amendments affect our disposition.
See also, e.g., Dousson v. Disch, 629 S.W.2d 111, 112 (Tex. App.—Dallas 1981, writ dism’d w.o.j.) (holding documents filed four months before summary judgment motion were proper summary judgment evidence).
“A ‘scrivener’s failure to embody the true agreement of the parties in a written instrument’ provides grounds for the equitable remedy of ‘reformation on the basis of mutual mistake.’ ” Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex. 1987) (emphasis omitted).
Court of Appeals of Texas, Beaumont.
JEFFERSON COUNTY, Texas, Appellant
Cherisse JACKSON, Appellee
Submitted on September 28, 2017
Opinion Delivered July 26, 2018
*663 On Appeal from the 172nd District Court, Jefferson County, Texas, Trial Cause No. E-197,513. Honorable Judge Donald Floyd
Attorneys & Firms
Bob Wortham, District Attorney, Kathleen M. Kennedy, Assistant District Attorney, Beaumont, TX, for Appellant.
Laurence “Larry” Watts, Melissa Azadeh, Watts and Company Lawyers, Ltd., Missouri City, TX, for Appellee.
Before Johnson, JJ.
HOLLIS HORTON, Justice
*664 In this interlocutory appeal, Jefferson County challenges the ruling the trial court made denying its plea to the jurisdiction. The appeal arises from an employment discrimination and whistleblower suit filed by Cherisse Jackson, a County employee who works at the Jefferson County Correctional Facility (the jail). In her suit, Jackson alleged that the County should have promoted her and that the County should not have demoted her from her position as a sergeant at the jail to the position she currently holds as a corrections officer.
In one appellate issue, the County argues the trial court should have dismissed all of Jackson’s claims. We hold that Jackson failed to meet her burden to establish that the district court possessed jurisdiction to conduct additional proceedings in Jackson’s case; as a result, we reverse the trial court’s ruling on the plea to the jurisdiction and order Jackson’s suit dismissed. Tex. R. App. P. 43.2(c).
In September 2015, Jackson sued the County alleging that Sheriff Mitch Woods1 and other officers in the Sheriff’s Department had discriminated and retaliated against her after she refused to cooperate with a request she alleged Deputy Cathy Werner made of her while investigating the alleged misconduct of another County employee, April Swain. The pleadings and evidence before the trial court show that Deputy Werner is assigned to the Internal Affairs Division of the Sheriff’s office.
When the County investigated Swain, it was seeking to determine whether Swain and an inmate had been involved in a sexual encounter at the jail. In Jackson’s suit, Jackson claimed that Deputy Werner approached her to determine whether Jackson had witnessed the alleged encounter between Swain and the inmate. According to Jackson’s pleadings, she informed Deputy Werner that she had not personally observed the incident. In any event, Jackson claims that Deputy Werner then asked Jackson to give the County a written statement claiming that she had seen the alleged encounter while viewing a monitor that jailers use to monitor activities inside the jail. Jackson’s pleadings do not specify the time or the date that Deputy Werner allegedly made this request.
On September 1, 2015, Jackson filed a claim with the Equal Employment Opportunity Commission (EEOC) complaining that the County had retaliated against her for refusing to provide Deputy Werner with a written statement critical of Swain. Jackson’s EEOC complaint alleges that Deputy Werner contacted Jackson in January 2014 and that Deputy Werner asked her to provide a written statement critical of Swain’s conduct. According to Jackson’s EEOC complaint, she refused Deputy Werner’s request, and the County then engaged in a series of acts that resulted in her demotion to the position of corrections officer and in the County’s decision not to promote her to a position as a lieutenant.
Six days after Jackson filed her EEOC claim, she sued the County in district court. In her original petition, Jackson claimed the County retaliated against her after she refused to provide the county *665 with a statement critical of Swain’s conduct. She alleged the retaliation she suffered affected her job, and by retaliating against her, the County violated the Whistleblower Act.2 See Tex. Gov’t Code Ann. §§ 554.001-.010 (West 2012) (Whistleblower Act). The claims in Jackson’s initial petition alleged only that the County’s conduct violated the Whistleblower Act. Id.
When the County responded to Jackson’s suit, it filed a plea to the jurisdiction. A plea to the jurisdiction is a dilatory plea, which governmental entities typically use to defeat a plaintiff’s action without regard to whether any of the plaintiff’s claims have merit. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). In its plea, the County denied that it demoted Jackson because she had participated in the investigation that involved Swain. The County noted that Jackson’s interview with Deputy Werner had occurred several months before Jackson was demoted. The County also alleged that it had legitimate reasons to demote Jackson, explaining that Jackson was demoted following a Disciplinary Review Board hearing, which found that in May 2015, Jackson engaged in insubordinate conduct toward Lieutenant Hawkins, a superior officer. The day after the incident involving Jackson’s alleged insubordinate conduct, Lieutenant Hawkins filed a written complaint, directed at Jackson, charging Jackson with handling a phone call that Hawkins made on the previous day in a way that violated the County’s written policies. The County also alleged that a Disciplinary Review Board, after considering Lieutenant Hawkins’ charges, found the charges had merit and recommended that Jackson be demoted from her position as a sergeant at the jail.
The County supported the facts alleged in its plea with thirty documents, alleging that the information in the documents supported its claim that Jackson’s demotion had been based on the incident involving Lieutenant Hawkins, an incident that it claimed was unrelated to the investigation that it had conducted earlier into Swain’s alleged misconduct. According to the County, the decisions it made about Jackson’s job were made for legitimate reasons, which it claimed were unrelated to its investigation of Swain.3
The documents attached to the County’s plea support the County’s allegation that it demoted Jackson because Lieutenant Hawkins filed a grievance against Jackson that a Disciplinary Review Board determined had merit. The evidence before the trial court when it ruled on the County’s plea included Lieutenant Hawkins’ written complaint, which addressed the incident involving Jackson’s insubordinate conduct. Lieutenant Hawkins filed her complaint on May 27, 2015, alleging that, on May 26, 2015, Jackson exhibited insubordinate and unprofessional conduct by hanging up on Lieutenant Hawkins twice after she telephoned Jackson seeking to locate another officer that she needed to contact so that she could complete her duty roster for the next day.
*666 After the County filed its plea, but before the hearing the trial court conducted on the County’s plea, Jackson amended her petition several times. In amended pleadings, Jackson added claims alleging the County’s retaliatory conduct violated the Texas Commission on Human Rights Act. She also added a claim alleging that she was entitled to a declaratory judgment that the County had violated her rights. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (West 2015) (Uniform Declaratory Judgments Act).
In her Third Amended Petition, Jackson’s live petition for this appeal,4 Jackson alleged that the County retaliated against her based on the manner she had participated in the investigation involving Swain, and that the County’s conduct violated her rights under the Texas Whistleblower Act, the Texas Commission on Human Rights Act, and the collective bargaining agreement between Jefferson County and the Jefferson County Sheriff’s Association. See generally 19. Each of Jackson’s claims hinged on her ability to prove that the County’s conduct occurred in retaliation for her alleged refusal to provide the County with a statement critical of Swain’s conduct at the jail.
In response to Jackson’s Third Amended Petition, the County supplemented its plea. The County’s supplemental plea addresses the claims the County did not expect that Jackson would file when it filed its plea. For example, the County’s supplemental plea addresses Jackson’s claims seeking declaratory relief. The County alleged that these claims were invalid because none of Jackson’s declaratory judgment claims had been based on a facially valid claim. Because the County’s plea and the evidence that it produced challenge the existence of a causal relationship between Deputy Werner’s investigation and its decisions about Jackson’s job, we review the evidence the trial court considered to determine whether the evidence the County produced shifted the burden of proof to Jackson on causation. If it did, we are then required to determine whether Jackson met her burden to prove that an issue of material fact existed on Jackson’s claim that the County’s decisions affecting her job were made because of her alleged refusal to provide the County with a statement critical of Swain.
When the trial court ruled on the County’s plea, the evidence before the court showed that Lieutenant Hawkins filed a disciplinary complaint against Jackson before the County decided to demote her. The complaint filed by Hawkins alleges that Jackson engaged in unprofessional and insubordinate conduct. The evidence *667 goes on to show that the grievance filed by Lieutenant Hawkins resulted in two different Disciplinary Review Board5 hearings. Both of the Boards that heard Lieutenant Hawkins’ grievance found that Jackson engaged in insubordinate and unprofessional conduct toward a superior officer. Following the hearings, both Boards forwarded recommendations to the Sheriff recommending that Jackson should be demoted for having engaged in misconduct.6
The investigation and the disciplinary proceedings involving Jackson consumed nearly the entirety of the six-month period during which Jackson was eligible to be considered for a promotion to lieutenant.7 In her pleadings, Jackson alleged that she achieved a passing score on a competitive exam, which the County administered to a group of officers to determine whether these officers should be considered for a possible promotion. Jackson alleged that she took the exam in April 2015. Lieutenant Hawkins filed her complaint about Jackson in late May 2015, and her complaint resulted in an investigation and hearings that concluded on September 15, 2015. Thus, the period in which Jackson claims she was eligible for promotion largely overlaps with the period that Jackson was being investigated for engaging in insubordinate conduct toward a superior officer. We also note that Jackson’s pleadings do not allege that anyone received a promotion to lieutenant, or that any member of an unprotected class was promoted to the position that she claims the test qualified her to receive.
Jackson produced little evidence when she responded to the County’s plea. Instead, she claimed that she did not have the burden to produce any evidence, and she argued that the trial court should accept the allegations in her pleadings as if they were true. That said, Jackson did attach eight documents to her response.8 Jackson requested that the trial court consider the documents she attached to her response together with the documents the County filed in resolving the County’s plea. Jackson argued in her response that the combined documents the parties were asking the trial court to consider created a fact issue on whether the County had retaliated against her because she refused to provide the County with a written statement critical of Swain’s conduct with an inmate. Jackson also alleged in her response *668 that the County was not immune from her claims seeking declaratory relief.
In late May 2017, the trial court denied the County’s plea. Five days later, the County filed its notice of appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West Supp. 2017) (authorizing interlocutory review of orders denying pleas to the jurisdiction filed by governmental entities). In a single issue, the County argues in its appeal that the trial court committed error by overruling the County’s plea.
Appellate Review-Pleas to the Jurisdiction
Governmental immunity protects political subdivisions of the state, including counties, from lawsuits. id. at 95.
Typically, governmental entities assert a claim of governmental immunity by filing a pleading titled “plea to the jurisdiction.” See Id.
In Jackson’s case, Jefferson County’s plea to the jurisdiction challenged both the factual sufficiency of Jackson’s pleadings and causation. The County alleged that Jackson suffered no adverse employment actions that were related to its investigation into Swain’s alleged misconduct. And, the County presented the trial court with evidence supporting its allegation that its decisions about Jackson’s job had been made for reasons unrelated to its investigation of Swain.
When a governmental entity challenges the factual sufficiency of a plaintiff’s pleadings, the Texas Supreme Court has required that the plaintiff’s pleadings contain alleged facts that “affirmatively demonstrate the court’s jurisdiction to hear the cause.” Brown, 80 S.W.3d at 555.
The County’s plea to the jurisdiction and the arguments it briefed challenge whether the plaintiff produced any evidence of causation. Causation is a required element under both the TCHRA and the Whistleblower Act. See Tex. Gov’t Code Ann. § 554.002 (making it unlawful for a state or local government entity to retaliate against a public employee who in good faith reports the entity’s violation of the law “to an appropriate law enforcement authority”). The evidence the County filed with its plea challenged the merits of Jackson’s claim that the County’s decisions about Jackson’s job resulted from Jackson’s refusal to provide the County with a statement critical of Swain’s conduct at the jail.
When a governmental entity produces evidence with its plea, and the evidence shows that the entity’s decisions affecting an employee occurred for legitimate, nondiscriminatory and non-retaliatory reasons, the burden of proof shifts to the plaintiff to show that “a disputed material fact regarding the jurisdictional issue” exists. Clark, 544 S.W.3d at 764 (“[W]e hold that when jurisdictional evidence negates the prima facie case or, as in this case, rebuts the presumption it affords, some evidence raising a fact issue on retaliatory intent is required to survive a jurisdictional plea.”).
The County advances several arguments claiming that it was entitled to have all of Jackson’s claims dismissed. First, we will address the County’s argument that the evidence that it filed with its plea rebutted the presumption created by Jackson’s pleadings that she had valid claims. Then, we will discuss whether the evidence that Jackson presented is sufficient to show that an issue of material fact *670 exists on her claim that the County retaliated against her because she refused to provide the County with a statement critical of Swain.
The evidence before the trial court in the hearing on the County’s plea tends to show that its decisions about Jackson’s job were based solely on the insubordinate conduct she engaged in toward Lieutenant Hawkins, a matter that appears to be unrelated to the County’s investigation into whether Swain had a sexual encounter with an inmate at the jail. The evidence the trial court considered in ruling on the County’s plea includes Lieutenant Hawkins’ written complaint about Jackson’s alleged insubordinate conduct, which occurred in May 2015. The evidence the County produced in support of its plea traces its decision to demote Jackson to the results of two Disciplinary Review Board hearings, both of which ended in decisions finding that Jackson engaged in insubordinate conduct toward Lieutenant Hawkins. The evidence includes the recommendations made by those Boards to Sheriff Woods—both Boards recommended that Jackson’s conduct should result in her demotion. The evidence before the trial court traced the Sheriff’s decision to demote Jackson to the recommendations he received from these Boards. Nothing in the evidence before the trial court ties the County’s decisions about Jackson’s job to the investigation the County conducted on the conduct allegedly committed by Swain.
Under both the Whistleblower Act and the TCHRA, the Legislature conditioned the waivers of immunity for retaliation claims on evidence sufficient to prove that a violation of the statutes occurred. See Tex. Dept. of Human Servs. v. Hinds, 904 S.W.2d 629, 636 (Tex. 1995) (“These arguments persuade us that the standard of causation in whistleblower and similar cases should be that the employee’s protected conduct must be such that, without it, the employer’s prohibited conduct would not have occurred when it did.”).
Although Jackson provided the trial court with additional evidence, the additional evidence Jackson asked the trial court to consider fails to tie the County’s decisions over Jackson’s job to the investigation the County conducted into Swain’s alleged misconduct with an inmate. Jackson attempted to tie the matters together by alleging that Lieutenant Hawkins, Deputy Werner, and Sheriff Woods were friends and that they conspired to violate her rights. However, Jackson failed to produce any evidence supporting these claims. To prove the existence of a conspiracy, Jackson needed to do more than just allege that the officers were friends and from that fact assume the three conspired *671 to punish her for refusing to provide the County with a statement critical of Swain. See Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 675 (Tex. 1998). Jackson provided the trial court with no such evidence, and there is nothing in the record suggesting that Sheriff Woods, Lieutenant Hawkins, and Deputy Werner agreed on a course of action to retaliate against Jackson for refusing to provide the County with a statement critical of Swain.
In her brief, Jackson suggests that dismissing her claims would be premature at this early stage of her case. She claims that if given more time, she could obtain evidence supporting her claims. But Jackson’s argument is hollow. The discovery period that applies to Jackson’s case ended in June 2016, nearly a year before the trial court denied the County’s plea.9 In the trial court, neither party presented any depositions or affidavits to support their claims. The evidence the parties filed in the trial court and the fact that the discovery deadlines that apply to the case have passed suggests to us that the parties engaged in little, if any, formal discovery. Because the evidence the County produced traces its decisions to the incident involving Jackson’s insubordinate conduct toward a superior officer, we are unpersuaded that allowing Jackson to ask the trial court to extend the discovery deadlines would result in Jackson discovering any evidence that might support her claims. In sum, the evidence before the trial court fails to prove that an issue of material fact exists on Jackson’s claims that the County retaliated against her because she refused to provide the County with a statement alleging that she saw Swain engage in a sexual encounter with an inmate.
We turn to Jackson’s remaining retaliation claims, which assert that the County retaliated against Jackson by removing her duties to maintain a closed-circuit monitoring system at the jail, denied her the right to access the grievance procedures available to her under the Collective Bargaining Agreement between the County and the Jefferson County Sheriffs’ Association, denied her the right to a fair appeal of her grievance, and subjected her to a hostile work environment. As to these claims, the County argues that it could not be sued on a Whistleblower Act claim for the same conduct Jackson could have complained about when she filed her administrative complaint with the EEOC. As to these claims, we agree that the fact that Jackson had the right to begin proceedings against the County under the TCHRA prevents her from suing the County on these same claims under the Whistleblower Act.
The TCHRA “provides the exclusive state statutory remedy for public *672 employees alleging retaliation arising from activities protected under the [TCHRA].” Lopez, 259 S.W.3d at 156. We conclude that Jackson was not entitled to rely on the Whistleblower Act on her complaints that the County took some of her job duties away from her, that the County denied her rights under the Collective Bargaining Agreement, that the County denied her a fair appeal of her grievance, and that the County subjected her to a hostile work environment.
The County also argues that Jackson failed to exhaust her remedies on her claims that the County took some of her job duties away from her, that the County denied her rights under the Collective Bargaining Agreement, that the County denied her a fair appeal of her grievance, and that the County subjected her to a hostile work environment. Under the TCHRA, exhaustion of remedies must occur before a trial court can acquire jurisdiction over a party’s TCHRA claims. See Tex. Lab. Code Ann. §§ 21.202, .208, .254, .256 (West 2015). Jackson’s EEOC complaint, which started her TCHRA proceeding, fails to mention any claims beyond Jackson’s complaints about being demoted and about not being promoted.
Jackson’s EEOC charge of discrimination11 alleges:
I refused to lie for IAD investigator Cathy Werner when she was protecting a friend from discrimination charges by white coworker April Swain. I was targeted by Werner, her command friends, and sheriff. I was falsely accused to be denied promotion, and then Sheriff *673 falsely [and] illegally accused me [and] demoted me.
“The crucial element of a charge of discrimination is the factual statement contained therein.” Tex. Lab. Code Ann. § 21.201 (West 2015) (describing the contents to include in the administrative stage of a TCHRA case).
The failure to exhaust one’s administrative remedies deprives the trial court of jurisdiction to hear a plaintiff’s unexhausted claims. See Preston, 222 Fed.Appx. at 357 (concluding that the employee had exhausted her remedies on some of her claims but not others, given the factual allegations in the employee’s administrative complaint).
Having carefully considered the parties’ briefs and the evidence before the trial court when it ruled on the County’s plea, we conclude that Jackson failed to meet her burden to present a prima-facie case rebutting the County’s evidence showing that the County’s decisions about Jackson’s job were unrelated to her alleged refusal to provide the County with a statement critical of Swain. As for Jackson’s remaining claims, we conclude that Jackson both elected to pursue a TCHRA remedy by filing an EEOC complaint and that she failed to exhaust her administrative remedies as for her claims that the County took some of her job duties away from her, prevented her from accessing the grievance procedure, interfered with her right to appeal, and subjected her to a hostile work environment. In conclusion, we hold the trial court erred when it denied the County’s plea challenging the trial court’s authority to hear all of Jackson’s Whistleblower Act and TCHRA claims.12
*674 Declaratory Judgment and Constitutional Claims
Jackson’s pleadings include several claims for declaratory relief, which Jackson based on article I, section 19 provides that no person shall be deprived of life, liberty, property, privileges or immunities, except by due course of law. Id. According to Jackson, governmental immunity does not bar declaratory judgment claims when an individual is seeking to vindicate her constitutional rights.
Yet “immunity from suit is not waived if the constitutional claims are facially invalid.” Id.
To obtain declaratory relief on her Id.
Generally, public employees do not have vested property interests in their jobs. See Id.
Next, we turn to Jackson’s Operation Rescue-Nat’l v. Planned Parenthood of Houston & Se. Tex., Inc., 975 S.W.2d 546, 557-560 (Tex. 1998). Jackson has never claimed that the County’s conduct created a prior restraint on her constitutional rights.
As a general rule, when employees are complaining about speech that they made pursuant to their job duties, as compared to speech they made as a citizen, their speech is not protected. The question is “whether the speech at issue is itself ordinarily within the scope of an employee’s duties, not whether it merely concerns those duties.” Lane v. Franks, 573 U.S. 228, 134 S.Ct. 2369, 2379, 189 L.Ed.2d 312 (2014). In her pleadings, Jackson alleged that her job duties included supervising the closed-circuit monitors, and she alleged that the system was removed from her supervision because she refused to provide the County with the statement critical of Swain. Even so, nothing in Jackson’s pleadings or in the evidence suggests that Jackson ever claimed, much less proved, that she made any public statements addressing the County’s handling of the investigation that it conducted about Swain’s alleged conduct at the jail.
Here, Jackson’s pleadings and the evidence in the record show that the speech Jackson has complained about involved her internal communications about Deputy Werner’s request with supervisors above her in the chain of command. Nothing in the record shows that Jackson’s claims related to any speech that she made to anyone outside her department. Thus, the speech at issue in Jackson’s case is not treated as the speech of a citizen engaging in exercising her First Amendment rights.
We conclude that Jackson’s pleadings fail to allege a facially valid free-speech claim. See Caleb, 518 S.W.3d at 545.
Collective Bargaining Agreement Claims
Finally, we turn to Jackson’s claim that she was entitled to have the trial court grant a declaratory judgment finding that the County had violated her rights under the Collective Bargaining Agreement. In her pleadings, Jackson alleged that the County violated the Collective Bargaining Agreement by mishandling the scoring of the test the County gave to her and other officers in April 2015, and that the County violated the Collective Bargaining Agreement by empaneling a Disciplinary Review Board that included an officer who was not qualified to serve.
Regardless of her theories, Jackson’s pleadings failed to allege or establish that the Legislature had waived a county’s immunity from suit for breach of contract claims. Under Texas law, political subdivisions, such as counties, enjoy immunity from suit unless the Legislature has enacted a statute waiving their right to rely on their immunity from suit. Patterson v. Marcantel, No. 09-16-00173-CV, 2017 WL 4844514, 2017 Tex. App. LEXIS 10046 (Tex. App.—Beaumont Oct. 26, 2017, no pet.) (concluding that governmental immunity prevented a former deputy sheriff employed by Liberty County from suing Liberty County on a claim alleging the County had breached an unwritten agreement).
Even if Jackson could establish that a valid waiver of immunity existed on her claims alleging that the County breached the Collective Bargaining Agreement, Jackson’s rights under that agreement are subject to an arbitration clause that required Jackson to arbitrate her claims. Article 18, section I of the Collective Bargaining Agreement requires that all matters, except matters involving wages,14 “be resolved by the provisions in this article.” Article 18, section III of that same agreement required Jackson to arbitrate any matters that remain unresolved after she followed the procedures governing grievances.
Jackson failed to allege that she had filed claims in arbitration over the County’s alleged breach of the Collective Bargaining Agreement, and she failed to allege that she had exhausted her claims by pursuing them in arbitration before suing. We conclude the trial court lacked jurisdiction over Jackson’s claims alleging that the County had violated the Collective Bargaining Agreement.
In conclusion, no matter how Jackson might try to re-plead her various claims, on this record the trial court lacked jurisdiction over the claims Jackson advanced in her suit. See Mackey v. Lucey Prods. Corp., 150 Tex. 188, 239 S.W.2d 607, 608 (1951) (“The law does not require the doing of a vain and useless thing, and by our opinions and judgments we will not so require.”).
Although the County raises several additional arguments in its brief to support dismissing Jackson’s claims, we need not address them since Jackson failed to present evidence showing that the trial court could exercise jurisdiction over her claims. See Harris Cty. v. Sykes, 136 S.W.3d 635, 639 (Tex. 2004) (noting that a judgment dismissing a case with prejudice was appropriate when the trial court lacked jurisdiction because of a sovereign immunity bar).
REVERSED AND RENDERED.
Sheriff Woods retired in 2016.
The original petition that Jackson filed does not allege that the County violated the Texas Commission on Human Rights Act. See Tex. Lab. Code Ann. §§ 21.001-.556 (West 2015 & Supp. 2017) (Texas Commission on Human Rights Act, or TCHRA). Jackson added her TCHRA claim after the County filed its plea.
The County failed to properly authenticate the documents that it submitted to the trial court with its plea. But the record does not show that Jackson objected to the authenticity of the documents. In reviewing the parties’ arguments, we have considered the documents the County filed with its plea as evidence the trial court considered in ruling on the County’s plea.
Jackson styled her live pleading as “Plaintiff’s (Revised) Second Amended Petition[.]” After comparing Jackson’s Second Amended Petition, which she filed on May 2, 2017, with her (Revised) Second Amended Petition, which she filed on May 4, 2017, we conclude that Jackson intended her “revised” petition to function as an amended petition. See Tex. R. Civ. P. 71 (providing that a party’s mistaken designation of a pleading is to be treated as if the pleading was properly designated).
The documents the County filed included a copy of the Collective Bargaining Agreement between the Jefferson County Officer’s Association and Jefferson County. The Collective Bargaining Agreement creates a disciplinary review hearing procedure, and it calls for disciplinary matters to be heard by a Disciplinary Review Board. Under the Collective Bargaining Agreement, each Disciplinary Review Board consists of seven officers, six of which who are chosen randomly from the Sheriff’s Department. The six randomly selected officers serve one-year terms. The head of the Board, selected annually by the Sheriff, serves a one-year term.
Following the first Disciplinary Review Board hearing, Jackson complained that a member on that board was ineligible to serve. She alleged that a disciplinary proceeding was decided adversely against that officer within a twelve-month period, which ended on the date that Jackson’s first hearing occurred. The Sheriff set aside the first Disciplinary Review Board’s decision, and he awarded Jackson a second hearing.
The Collective Bargaining Agreement contains a competitive test procedure. Officers who pass the test are eligible for possible promotions during a six-month period after passing the exam.
Jackson did not authenticate the exhibits that she attached to her response. Still, the County never objected to the authenticity of the documents Jackson included with her response. Thus, we consider the documents attached to Jacksons’ plea as evidence in resolving the appeal.
The record also does not show that Jackson ever asked the trial court to extend the discovery deadlines that applied to her suit. See Rule 190.3, because Jackson’s original petition included a request for disclosure, Jackson’s opportunity to obtain discovery from the County ended in June 2016. Id.
The purpose of the THCRA includes “provid[ing] for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments[.]” Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500, 504 n.4 (Tex. 2012).
Jackson filed her EEOC charge on September 1, 2015. The record in the trial court shows that on May 21, 2016, Jackson’s attorney forwarded a copy of Jackson’s EEOC complaint to the Texas Workers Compensation Commission, Civil Rights Division.
In her brief, Jackson argues that the County should have raised its complaints that her pleadings were insufficient by filing special exceptions or by moving to dismiss under Rule 91a motion to test her pleadings lacked merit since a plea to the jurisdiction can be used to test the facial validity of a plaintiff’s pleadings).
Article 28, Section IV provides:
Within ten (10) days of receipt of the written recommendation by the D.R.B., the Sheriff shall determine the disciplinary action to be taken against the affected member. The Sheriff may accept or reject either in whole or in part the recommendation of the D.R.B.
Additionally, Article 14, Section IV of the Collective Bargaining Agreement provides no right of appeal from decisions that the Sheriff might make about who should be promoted. Instead, the agreement allows the Sheriff to choose from among the group that passes the competitive exam who should receive a promotion. Finally, Article 11 of the Collective Bargaining Agreement provides that “all power and authority which has not been abridged, delegated, granted or expressly limited by some written provision of this Agreement is retained by the County and by the Sheriff.”
Article 19 of the Collective Bargaining Agreement contains a schedule of the hourly, monthly, and yearly wage for the various classifications of officers employed by the County. In any event, Jackson did not allege that the County failed to pay her the wages required based on her classifications in Article 19 of the Collective Bargaining Agreement.
Court of Appeals of Texas, Beaumont.
Yvonne TRAHAN, Appellant
The PREMCOR REFINING GROUP INC. d/b/a Valero Port Arthur Refinery, Appellee
Submitted on May 2, 2018
Opinion Delivered August 16, 2018
On Appeal from the 58th District Court, Jefferson County, Texas, Trial Cause No. A-195,793-C. Honorable Judge Kent Walston.
Attorneys & Firms
Byron C. Alfred, VB Attorneys, PLLC, for Appellant.
F. Blair Clarke, Calvert, Eaves, Clarke and Stelly, Beaumont, TX, for Appellee.
Before Horton, JJ.
CHARLES KREGER, Justice
*1 Yvonne Trahan appeals the trial court’s “Order Denying Plaintiff’s Motion Requesting Recusal,” “Order Granting Defendant, The Premcor Refining Group Inc. d/b/a Valero Port Arthur Refinery’s Motion for Summary Judgment,” and “Order Denying Plaintiff’s Motions for Summary Judgment.”1 In three issues, Trahan contends:
(1) the recusal judge erred in denying her motion to recuse;
(2) the trial court erred in granting summary judgment for Premcor and denying summary judgment for Trahan on Premcor’s exclusive remedy defense because Premcor did not have workers’ compensation insurance coverage at the time of the incident; and
(3) the trial court erred in granting summary judgment for Premcor and denying summary judgment for Trahan on Premcor’s exclusive remedy defense because Trahan was not Premcor’s employee.
Trahan sustained an on-the-job injury at Premcor’s Port Arthur facility on September 27, 2013. Trahan worked at the refinery for thirty-five years before her injury. The refinery, and Trahan’s employer, changed ownership during her tenure. At the time of her injury, Trahan worked as a head operator, mainly assigned to boiler house 18.
The incident occurred when Trahan was catching samples at the sample station for a boiler.2 Steam was released from a valve and sprayed Trahan when the metal spigot tubing allegedly bent upward. Trahan sustained severe burn injuries to her upper torso. Following the incident, Trahan was hospitalized and received treatment for her burns. Trahan received and accepted workers’ compensation benefits and was still receiving them at the time of her deposition after the lawsuit was filed. Premcor investigated the incident, prepared a report, and recommended certain follow-up actions.
Because of the incident, Trahan sued several parties for negligence, including Premcor.3 In her second amended petition, Plaintiff alleged that on the day of the incident, her employer was Valero Energy Corp. In its amended answer, Premcor raised the affirmative defense of exclusive remedy under the Texas Workers’ Compensation Act. See Tex. Lab. Code Ann. § 408.001(a) (West 2015).
On April 21, 2014, before Trahan sued Premcor, Premcor produced a copy of its investigation report to Trahan. That investigation report contained the name of the presiding trial judge’s sister-in-law, who worked as an engineer for Premcor.
*2 During a site inspection on or about November 3, 2015, Trahan allegedly discovered that the valve and spigot involved in the incident had not been preserved. On April 19, 2016, Trahan filed a motion seeking remedies for spoliation of evidence and named the trial judge’s sister-in-law as someone with knowledge of the issue. The same day, but several hours later, Trahan moved to recuse the trial judge under Tex. R. Civ. P. 18b(b)(7)(c). A recusal judge conducted a hearing, then denied the motion to recuse.
Trahan also filed a combined no-evidence and traditional motion for summary judgment and later filed a supplemental motion for summary judgment. In her motion for summary judgment, Trahan argued Premcor could not establish it was entitled to the exclusive remedy defense under the Texas Workers’ Compensation Act on two grounds—1) Premcor could not prove it was Trahan’s employer at the time of the incident, and 2) Premcor could not show it had workers’ compensation insurance coverage at the time of the incident. See Tex. R. Civ. P. 166a(c), 166a(i). While Trahan’s motion was pending, Premcor filed a competing traditional motion for summary judgment on its workers’ compensation exclusive remedy defense. Each party responded to the other party’s motion for summary judgment and objections to the summary judgment evidence submitted by the opposing party.
In support of its motion for summary judgment, Premcor submitted the first amended petition in intervention of the workers’ compensation carrier, Ace American Insurance Company (Ace).4 The petition in intervention revealed Ace issued a workers’ compensation policy in full force and effect at the time of the incident and that the insurance company paid indemnity and medical benefits to Trahan in the amount of at least $208,577.72. Ace also alleged in its amended petition in intervention that Ace issued workers’ compensation insurance policy number C47316765 to the Premcor Refining Group Inc. d/b/a Valero Port Arthur Refinery for employees at the Valero Port Arthur Refinery and Trahan was an employee of its insured for purposes of the Texas Workers’ Compensation Act. Ace thus asserted in its amended petition in intervention it was not seeking recovery of any portion of its workers’ compensation lien from Premcor. Premcor also included Ace’s sworn discovery responses as evidence in support of its motion for summary judgment, which conveyed that Premcor had workers’ compensation coverage in effect at the time of Trahan’s incident.
There are no rulings on either party’s objections to the summary judgment evidence in the record before us. The trial court granted Premcor’s motion for summary judgment and denied Trahan’s motion for summary judgment. The trial court subsequently severed the cause against Premcor, making the judgment final and appealable. Trahan then filed this appeal.
II. Issue One: Denial of Motion to Recuse
A. Standard of Review
In her first issue, Trahan argues the recusal judge erred in denying her motion to recuse the presiding trial judge. We review the denial of a motion to recuse for an abuse of discretion. See Woodruff v. Wright, 51 S.W.3d 727, 736 (Tex. App.—Texarkana 2001, pet. denied).
*3 As the party seeking to recuse the trial judge, Trahan bore the burden of proof. See Tex. R. Civ. P. 18b(b)(7)(C).
Trahan sought the trial judge’s recusal solely claiming that the trial judge’s sister-in-law was “to the judge’s knowledge likely to be a material witness in the proceeding.” See id. Trahan and Premcor agreed that the name of the trial judge’s sister-in-law appeared in a post-incident investigation report produced by Premcor to Trahan on April 21, 2014. Yet our examination of the record suggests Trahan was unable to establish the sister-in-law’s materiality as a witness. The investigation report listed actions requiring follow-up, along with persons responsible for those actions. Trahan had deposed several individuals listed on the report and none of them identified the judge’s sister-in-law as a material witness, despite being questioned by Trahan’s counsel about the investigative report.
Trahan’s argument that the trial judge’s sister-in-law would be a material witness in the case (whether on spoliation or on the merits) relied solely on the sister-in-law’s name appearing in one document. Trahan never deposed the judge’s sister-in-law before filing the motion to recuse and never sought her deposition until after Trahan filed her recusal motion. Trahan identified no other document, deposition transcript, or discovery response that included any mention of the trial judge’s sister-in-law.5 Standing alone, the one document Trahan identified does not suggest the trial judge’s sister-in-law was likely to be a material witness in the proceeding sufficient to meet Trahan’s high threshold to recuse the presiding trial judge from the case.
Because Trahan failed to establish the trial judge’s sister-in-law was likely to be a material witness and that the trial judge had knowledge that she was likely to be a material witness, we conclude the recusal judge did not abuse his discretion in denying the motion to recuse. See Woodruff, 51 S.W.3d at 736. We overrule issue one.
III. Issues Two and Three: Premcor’s Summary Judgment
In her second and third issues, Trahan contends the trial court erred in granting Premcor’s motion for summary judgment on its affirmative defense of exclusive remedy under the Texas Workers’ Compensation Act and denying her own motion for summary judgment on the same issue. Trahan argues she established conclusively that at the time of the incident, she was not an employee of Premcor and Premcor did not have workers’ compensation insurance.
A. Standard of Review
*4 We review a trial court’s decision on a motion for summary judgment de novo. See Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996).
The Texas Workers’ Compensation Act (TWCA) was intended to benefit employees and employers. Port Elevator-Brownsville v. Casados, 358 S.W.3d 238, 241 (Tex. 2012).
The [TWCA] was adopted to provide prompt remuneration to employees who sustain injuries in the course and scope of their employment.... The act relieves employees of the burden of proving their employer’s negligence, and instead provides timely compensation for injuries sustained on-the-job.... In exchange for this prompt recovery, the act prohibits an employee from seeking common-law remedies from his employer, as well as his employer’s agents, servants, and employees, and for personal injuries sustained in the course and scope of his employment.
Port Elevator, 358 S.W.3d at 241.
The basis for Premcor’s motion for summary judgment was the exclusive remedy defense under the TWCA. See Limestone Prods. Distrib. Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) (“The test to determine whether a worker is an employee rather than an independent contractor is whether the employer has the right to control the progress, details, and methods of operations of the work.”).
*5 Explaining some of the corporate background is useful in our analysis. The summary judgment evidence included the insurance policy at issue, deposition testimony from various employees under the “Valero umbrella,” multiple internal accounting documents, and discovery responses from the workers’ compensation carrier. The evidence established that Premcor Refining Group, Inc. is a wholly-owned subsidiary of Valero Energy Corporation. The evidence also established that Valero Energy Corporation is a holding company and has no employees. Valero Services, Inc. is another wholly-owned subsidiary of Valero Energy Corporation, and it provides payroll services to Premcor.
Premcor Refining Group, Inc. owns and operates the “Valero Port Arthur Refinery” where Trahan worked as a head operator at the time of the incident. Trahan worked at the facility for thirty-five years, for the current and prior owners of the refinery. The general manager of the refinery and vice president of Premcor testified Trahan was an employee of the refinery, and he had the right to control the details of her work, including aspects related to safety. Trahan testified that the general manager had the authority to fire her and could correct her if he saw her doing something unsafe. In her deposition, Trahan also conveyed that all her work instructions originate from Port Arthur and not from the corporate offices in San Antonio. Trahan testified that she was injured while catching samples from one of the boilers that powered the plant, a necessary process to Premcor’s refining operations. The evidence conclusively established Premcor had the right to control Trahan’s work and Premcor was Trahan’s employer for purposes of the TWCA. See Tex. Lab. Code Ann. § 401.011(18). Trahan is the only person who claims she was not a Premcor employee and failed to carry her burden of proof on this issue once the burden shifted to her.
To be entitled to the exclusive remedy defense, Premcor must also prove it had workers’ compensation coverage at the time of the incident. See id. § 408.001(a); Garza, 161 S.W.3d at 475. Trahan submitted evidence and asserted the evidence failed to show that Premcor was a named party under the workers’ compensation insurance policy produced by Premcor and Ace. The evidence submitted by Premcor established that Valero procured workers’ compensation coverage for the entities under its umbrella, including Premcor, as a wholly-owned subsidiary. Valero secured workers’ compensation insurance through Ace. The Vice President of Risk Management of Valero Services, Inc. testified in his deposition that he was the individual responsible for obtaining the insurance. A Risk Finance Manager for Valero also testified they secured workers’ compensation insurance for Valero. The testimony revealed Premcor provided to Ace specific information for each of its employees at the Port Arthur refinery to obtain workers’ compensation coverage. That information included loss history and payroll information. Valero forwarded this type of information to Ace on behalf of each entity for which it secured coverage. Ace charged Valero one premium. Valero then allocated a portion of that premium to each entity covered under the workers’ compensation policy based on actuarial information, which again, included loss history and number of employees on the payroll for each covered entity. Premcor and Valero provided spreadsheets showing their internal accounting and allocation of costs. Indeed, of all the Valero entities, Premcor paid the largest monthly portion of the premium under the policy.
Testimony and claim forms revealed that Trahan received workers’ compensation benefits. Moreover, the workers’ compensation carrier showed in its sworn discovery responses that on the date of the incident Premcor had workers’ compensation insurance coverage, and the insurance company paid benefits to Trahan under the policy. Ace’s petition in intervention and sworn discovery responses established it was not seeking recovery of any portion of its workers’ compensation lien from its insureds, which included Premcor. The parties to the insurance contract agreed: Premcor and Ace had a contract in which Ace provided workers’ compensation coverage to Premcor at the time of Trahan’s injury. See Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 503–04 (Tex. 2015) ).
*6 Trahan asserts that because Premcor was not listed by name on the actual policy, it is evidence that Premcor had no workers’ compensation insurance coverage under the policy. She also argues that Premcor was not shown on the Texas Department of Insurance’s web page as a subscriber.6 We find these arguments unpersuasive. Unlike the situation before us, when the Garza Court held the employer did not prove it had coverage, it noted that no workers’ compensation policy was identified or made part of the record. That is not the situation before us. See id., 161 S.W.3d at 478 (noting premiums are to be based on that employer’s rating experiences, not another employer’s). These steps, as established by the summary judgment evidence, included
• submitting Premcor’s specific payroll information and loss history information to the insurance carrier;
• listing the address of the Premcor refinery in Port Arthur on the policy;
• assigning a specific percentage of the overall premium charged by Ace to Premcor based on actuarial information;
• allocating that premium as an expense to Premcor;
• communicating with the carrier about coverage for Premcor; and
• obtaining the carrier’s agreement that the coverage provided by the policy extended to Premcor.
Based on this record, the evidence conclusively established Premcor was Trahan’s employer on the date of the incident for purposes of the TWCA and that Premcor subscribed to workers’ compensation insurance. In fact, the summary judgment evidence reveals Trahan received workers’ compensation benefits under the policy. Premcor therefore was entitled to a judgment that the receipt of workers’ compensation benefits was Trahan’s exclusive remedy under the TWCA and acted as a bar to her negligence claims against it. Allowing her to pursue a lawsuit against Premcor after accepting workers’ compensation benefits provided by Premcor would defeat the purpose of the TWCA. See Little v. Delta Steel, Inc., 409 S.W.3d 704, 714–15 (Tex. App.—Fort Worth 2013, no pet.) (applying quasi-estoppel principles in concluding a plaintiff’s negligence claim could not survive when a plaintiff accepted death benefits and to do otherwise would be repugnant to the purpose of the workers’ compensation statute and noting that a party’s acceptance of workers’ compensation benefits was inconsistent with the party’s assertion that the employer did not have workers’ compensation insurance). We overrule issues two and three.
The summary judgment evidence conclusively established that on the date of the incident, Premcor was Trahan’s employer and Premcor subscribed to a workers’ compensation policy issued by Ace at the time of her injury. The evidence also established Trahan received workers’ compensation benefits under the workers’ compensation insurance policy. Premcor therefore was entitled to summary judgment based on the exclusive remedy defense under the TWCA. The judgment of the trial court is affirmed.
The trial court signed an order severing the cause against Premcor Refining Group Inc. d/b/a Valero Port Arthur Refinery and denying the abatement of the cause against all other defendants. Prior to the order of severance, the trial court granted Premcor’s traditional motion for summary judgment and denied Trahan’s no-evidence and traditional motion for summary judgment. The severance order mandated the summary judgment was final and appealable. See Diversified Fin. Sys., Inc. v. Hill, Heard, O’Neal, Gilstrap & Goetz, P.C., 63 S.W.3d 795, 795 (Tex. 2001) (per curiam).
As head operator, she did not catch samples as often as she used to but doing so was part of her job.
Trahan added Premcor as a defendant in her second amended petition, the live pleading here.
We note pleadings do not generally constitute evidence. See Commercial Structures & Interiors, Inc. v. Liberty Educ. Ministries, Inc., 192 S.W.3d 827, 835 (Tex. App.—Fort Worth 2006, no pet.).
Trahan argued that her spoliation motion put the trial judge on notice that his sister-in-law was likely to be a material witness. But the spoliation motion was filed the same day as Trahan’s motion to recuse. Other than expanding more information from the Investigation Report containing the trial judge’s sister-in-law’s name, the spoliation motion failed to buttress Trahan’s argument that the trial judge’s sister-in-law would be a material witness in the case. Trahan offered no evidence that the relative was involved in any way in “investigat[ing] the causes of the incident,” in “modif[ying] the sample station at issue in this case on an expedited basis to correct its deficiencies[,]” or in failing to preserve the ball valve, tubing, or spigot.
Trahan included information from the Texas Department of Insurance’s website with her supplemental motion for summary judgment which purported to show that Premcor was not shown as a workers’ compensation subscriber. But the Texas Department of Insurance’s website provides a disclaimer that states, “Not able to find the information required? This does not necessarily mean that coverage does not exist.”
Court of Appeals of Texas, Beaumont.
TEXAS ALLIANCE OF ENERGY PRODUCERS—WORKERS’ COMPENSATION SELF–INSURED GROUP TRUST, Appellant
John BENNETT, Appellee
Submitted on March 13, 2018
Opinion Delivered May 17, 2018
On Appeal from the 253rd District Court, Liberty County, Texas, Trial Cause No. CV1104807, Honorable Chap B. Cain III, Judge
Attorneys & Firms
Patricia H. Blackshear, Flahive, Ogden and Latson, Austin, TX, for Appellant.
Colleen M. McClure, Houston, TX, for Appellee.
Before Horton, JJ.
HOLLIS HORTON, Justice
*1 The dispositive issue before the Court in this appeal concerns whether the trial court still had plenary jurisdiction over the case when it rendered the order from which the appellant elected to pursue this appeal. We conclude that the trial court no longer possessed plenary jurisdiction to enter the order from which the appellant has appealed because approximately six months before signing the order at issue, the trial court had signed an order that became final and the appellant failed to appeal from the trial court’s earlier final order. Consequently, we hold that the order from which the appellant elected to appeal is void and that it must be vacated.
On August 30, 2006, John Bennett suffered a work-related injury while driving a truck for his employer, Hercules Transport, Inc.1 Based on the work-related injuries Bennett received in the collision that occurred while he was driving his employer’s truck, Bennett filed a workers’ compensation claim against Texas Alliance, Hercules Transport’s workers’ compensation carrier. After Bennett’s compensation claim was adjudicated by the Department of Insurance, Workers’ Compensation Division (the Department), Bennett challenged the award by appealing it for further proceedings in the 253rd District Court. After several years of litigation, Bennett filed a motion for summary judgment on his compensation claim, alleging that no issues of fact existed regarding his claim that he was entitled to compensation benefits in a greater amount than those he was awarded when his claim was decided by the Department. Based on Bennett’s motion, the trial court signed a summary-judgment order in Bennett’s favor on April 20, 2016. The April order adjudicated Bennett’s claim for supplemental income benefits. When the trial court signed the April summary-judgment order, Bennett’s claim for supplemental income benefits was the only remaining claim that was before the trial court at that stage of the proceedings.2 However, the language the trial court used in its April summary-judgment order contains neither language stating that the order was intended to be final, nor does the order contain “Mother Hubbard” language, indicating that the trial court recognized that its order disposed of Bennett’s last remaining claim.3 Despite the fact the trial court did not include any express language to indicate that its April 2016 summary-judgment order was final, both of the parties agree in the briefs they filed in this Court that the trial court’s April summary-judgment order was both final and appealable despite the fact that it contains no express language to indicate that the order was intended by the trial court as the court’s final order.
*2 Within thirty days of the date the trial court signed the April summary-judgment order, Bennett asked that the trial court clarify the order so the order expressly stated the monetary amount that Bennett was to receive in prejudgment interest.4 Subsequently, in late June 2016, Bennett filed a motion requesting that the trial court increase his compensation award by $58,924,5 a figure that did not include interest, and increase the attorney’s fees previously awarded under the April summary-judgment order by $14,731.
In October 2016, the trial court held a hearing on Bennett’s request to increase the principal and attorney’s fees the trial court had awarded Bennett in its April summary-judgment order. During the hearing, Bennett and Texas Alliance provided the trial court with competing expert reports, which conflict, addressing how these experts thought Bennett’s supplemental income benefits award should have been calculated. Neither report suggested that the trial court had awarded Bennett the correct amount he was entitled to receive in supplemental income benefits as compared to the amount Bennett received under the trial court’s April summary-judgment order. At the conclusion of the hearing, the trial court advised the parties that it respected the opinion of Bennett’s expert, a certified public accountant, and that it would increase Bennett’s supplemental income benefits award to make it consistent with the calculations provided by Bennett’s expert.
On October 12, 2016, the trial court signed an order that is titled “Order Granting Additional Interest and SIBS Payments and Order for Funds to be Placed Into the Court Registry.” The October order substantially alters the April order in several ways—it increased the amount Bennett received in compensation benefits, increased the amount Bennett received in statutory interest, and increased the amount Bennett was awarded in attorney’s fees.
While Texas Alliance filed a timely notice of appeal from the trial court’s October 2016 order, it did not file a timely notice of appeal from the trial court’s April 2016 summary-judgment order. After the parties filed their briefs, and after this Court became aware that the trial court’s April order disposed of Bennett’s last live claim, we directed this Court’s clerk to notify the parties of our request that they file supplemental briefs to address whether the trial court still had plenary power over the cause in October 2016 when it signed the order from which Texas Alliance filed its notice of appeal. See Tex. R. App. P. 38.9(b). In response to our request, the parties filed supplemental briefs. In these, the parties agree that the April 2016 summary-judgment order was final, but they disagree about whether the trial court still had any power to change the supplemental income benefits and attorney’s fees the trial court awarded in its April 2016 summary-judgment order.
Texas Alliance argues that by the date the trial court signed the October 2016 order, it no longer had jurisdiction over the case because the court’s plenary power to change its orders had expired. In contrast, Bennett argues that the changes the trial court made to its April 2016 summary-judgment order were only clerical. He suggests that a trial court may always correct clerical errors even when the court’s plenary power to change its prior orders has expired.
*3 A trial court has only a limited period of time in which to make substantive changes to orders that it signs that are final. McFadin v. Broadway Coffeehouse, LLC, 539 S.W.3d 278, 283 (Tex. 2018).
The parties in this case do not dispute that the trial court’s April 2016 summary-judgment order disposed of Bennett’s last remaining claim, nor do they dispute that the April summary-judgment order became both final and appealable. After independently reviewing the parties’ pleadings,6 the trial court’s interlocutory orders rendered before the April 20, 2016 order, which partially disposed of some of Bennett’s issues, and the trial court’s April 2016 summary-judgment order, which disposed of all of Bennett’s remaining issues not previously resolved, we conclude the trial court’s April 2016 summary-judgment order was a final order even though the order contains no express language of finality. See Lehmann v. Har–Con Corp., 39 S.W.3d 191, 200 (Tex. 2001).
By October 2016 when the trial court signed the October order increasing Bennett’s awards, the trial court no longer possessed plenary jurisdiction to increase the amounts it had awarded Bennett in supplemental income benefits and attorney’s fees. See Tex. R. Civ. P. 329b(e) (providing that when a party files a timely motion for new trial or other motion to alter the substance of a final judgment, the court’s plenary power is extended for a period, depending on the date the trial court signs a written order regarding the post-trial motion, that is no more than 105 days from the date the trial court signed the final order).
*4 In his brief, Bennett suggest that the corrections the trial court made to its April 2016 summary-judgment order were changes the trial court made merely to correct clerical errors. But, a review of the report the trial court relied on to change Bennett’s supplemental income benefits award reflects that the trial court made a substantive change to Bennett’s supplemental income benefits award based on the interpretation provided by Bennett’s expert regarding how Bennett’s award should have been calculated. While the Rules of Procedure authorize trial courts to correct clerical mistakes they make when entering a final judgment, the Rules do not allow corrections that a judge makes in rendering a judgment. See Escobar v. Escobar, 711 S.W.2d 230, 231 (Tex. 1986) (noting that “[a] judicial error is an error which occurs in the rendering as opposed to the entering of a judgment”).
In this case, the trial court’s alleged errors in the competing orders involved judicial reasoning, as the trial court’s alleged error regarding calculating Bennett’s supplemental income benefits award relied on the report of Bennett’s expert, which was information that was not before the trial court when it rendered its April 2016 summary-judgment order. This error cannot fairly be characterized clerical, since “[a] clerical error is one which does not result from judicial reasoning or determination.” Andrews v. Koch, 702 S.W.2d 584, 585 (Tex. 1986). In this case, the October 2016 order changed the supplemental income benefits and attorney’s fees awarded under the trial court’s April summary-judgment order by more than $65,000.
“[A]fter a judgment has become final, the trial court may ... not correct judicial errors.” Id. We hold the “corrections” at issue in this case sought to alter a decision the trial court made that was based on the court’s judicial reasoning; therefore, we reject Bennett’s argument that the changes at issue amount merely to the correction of clerical errors. We hold the trial court’s plenary power to alter its April 2016 summary-judgment order expired long before the trial court signed its October 2016 order increasing Bennett’s awards.
Because we have decided that the trial court did not have jurisdiction to alter its April order, and because Texas Alliance did not perfect an appeal from the April order, we must address the remedy that is required to resolve this appeal. See Id.
We hold the trial court’s October 2016 order is void and that its April 2016 summary-judgment order was final. We vacate the trial court’s order dated October 12, 2016, and we dismiss Texas Alliance’s appeal because it did not file a timely notice of appeal from the trial court’s April 2016 summary-judgment order. We need not reach Texas Alliance’s remaining arguments attacking the validity of the October 2016 order on other grounds given our conclusion that the October 2016 order is void. See Tex. R. App. P. 47.1 (requiring the appellate court to issue a written opinion that is as brief as practicable but that addresses all issues necessary to a final disposition of the case being appealed).
ORDER VACATED, APPEAL DISMISSED.
We have previously decided two petitions for mandamus in connection with this suit. In re Tex. All. of Energy Producers, No. 09-17-00364-CV, 2017 WL 5486053, 2017 Tex. App. LEXIS 10784 (Tex. App.—Beaumont 2017, no pet.). Texas Alliance also filed a petition for mandamus in that cause, its third mandamus complaint addressing matters that related to Bennett’s efforts to file a suit based on claims that Bennett had not first presented to the Texas Department of Insurance, Workers’ Compensation Division (the Department). Generally, Bennett attempted to pursue extra-contractual claims in court over Texas Alliance’s alleged mishandling of his claim for workers’ compensation benefits. In connection with the third mandamus proceeding, we once again directed the trial court to dismiss Bennett’s suit because the trial court lacked subject-matter jurisdiction over Bennett’s allegations that his claims had been mishandled since he failed to first present his claims about Texas Alliance allegedly mishandling his claims to the Department before he filed suit. Id. at *3.
The trial court ruled that Bennett could recover attorney’s fees based on an earlier interlocutory order dated April 4, 2016.
A “Mother Hubbard” clause is a catch-all statement designed to signify that all relief not expressly granted in the case is denied. Lehmann v. Har–Con Corp., 39 S.W.3d 191, 198 (Tex. 2001).
The April summary-judgment order did not award a dollar amount regarding Bennett’s prejudgment statutory interest award; instead, the order awarded Bennett compensation benefits totaling $92,232 “[p]lus Statutory Interest.”
All monetary amounts that are referred to in the opinion have been rounded to the nearest dollar.
Bennett filed a post-judgment motion asking the trial court to reduce the amount Texas Alliance owed him in statutory interest to a stated dollar figure, but this motion did not extend the trial court’s plenary power under Tex. R. Civ. P. 329b(c) (providing that motions for new trial, to modify, or to reform a judgment, if not determined by a written order, are deemed overruled by operation of law seventy-five days following the date the trial court signed the judgment); id. 329b(e) (providing that the court may vacate, modify, correct or reform a judgment if a motion for new trial is filed by any party for a period until “thirty days after all such timely-filed motions are overruled, either by a written and signed order or by operation of law, whichever occurs first”).