Myers v. Employers Ins Wausau ( 2001 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-41469
Summary Calendar
CAROL MYERS,
Plaintiff-Appellant,
versus
EMPLOYERS INSURANCE OF WAUSAU, A MUTUAL COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
For the Eastern District of Texas
(1:00-CV-172)
June 29, 2001
Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Carol Myers appeals the district court’s order granting
summary judgment to Employers Insurance on statute of limitations
grounds. Having reviewed her arguments, we agree with the judgment
of the district court.
Myers suffered a workplace injury and filed a worker’s
compensation claim. Parts of her claim were denied. She initiated
an administrative dispute resolution proceeding through the Texas
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Worker’s Compensation Commission, and as a result her claims were
eventually approved. Myers then sued, claiming that the delay in
treatment exacerbated her injury.
The district court granted summary judgment to Employers
Insurance on the grounds that the statute of limitations had run on
Myers’s claim. The applicable statute of limitations is two
years.1 Myers filed her lawsuit more than two years after her
benefits were initially denied, but less than two years after the
conclusion of her administrative proceeding. If, therefore, the
statute of limitations began to run with the denial of benefits,
her lawsuit was untimely and the judgment of the district court
must be affirmed. If, by contrast, the statute did not begin to
run until her administrative remedies were exhausted, then her
lawsuit was timely and the judgment of the district court must be
reversed.
Under Texas law, for statute of limitations purposes, “a cause
of action generally accrues at the time when facts come into
existence which authorize a claimant to seek a judicial remedy.”2
For a case challenging the denial of insurance benefits, that time
will ordinarily be the moment at which benefits were denied.3 The
Texas worker’s compensation scheme, however, provides for an
1
See Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 827
(Tex. 1991).
2
Id. at 828.
3
Id.
2
administrative review process.4 When a trial court hears worker’s
compensation cases, it does so on appeal from the decision of the
administrative agency, and only has jurisdiction to do so once the
administrative remedies are complete.5 Thus, at least as regards
a claim for denial of benefits, a plaintiff is only authorized to
seek a judicial remedy once her administrative remedies are
exhausted.
The question raised by this case is whether or not the same
rule should apply to claims other than those for benefits denied.
Myers seeks to recover damages for bad faith denial of coverage.
It is clear that the Worker’s Compensation Commission cannot grant
the relief Myers seeks–the Commission can only award worker’s
compensation benefits, and cannot award tort, contract, or punitive
damages.6 On the other hand, the Commission can determine whether
or not Myers was entitled to benefits in the first place. While a
court would review that determination de novo, the Texas statutory
4
See Continental Cas. Ins. Co. v. Functional Restoration
Assocs., 19 S.W.3d 393, 396 (Tex. 2000) (defining benefits
available under the Texas Worker’s Compensation Act to include
medical benefits, and stating that “disputes concerning a carrier’s
liability for benefits are resolved through the dispute resolution
procedures . . . involv[ing] a benefit review conference, a
contested case hearing, and an appeal to the commission appeals
panel”).
5
See Ankrom v. Dallas Cowboys Football Club, Ltd., 900 S.W.2d
75, 77 (Tex. App. - Dallas 1995).
6
See Golden v. Employers Ins. of Wausau, 981 F. Supp. 467
(S.D. Tex. 1997).
3
scheme clearly contemplates that the Commission will decide in the
first instance.
The Texas Supreme Court has not passed on the question of
whether a plaintiff must exhaust her administrative remedies before
pursuing claims for relief not grantable by the Commission. The
Texas appellate courts are divided on the issue.7 The Fifth
Circuit, however, has made an Erie guess. In Northwinds Abatement,
Inc. v. Employers Insurance of Wausau,8 we held that where the
Worker’s Compensation Commission “has no power to provide the
remedy sought, then, exclusive jurisdiction cannot rest in that
body.”9 We therefore held that a district court may take original
jurisdiction over such a claim before the administrative remedies
are exhausted.10 In order to protect the statutory scheme providing
for the Commission to determine some issues in the first instance,
we instructed the district court to hold the case in abeyance until
the administrative proceeding was complete.11 We reaffirmed our
7
See Stonebrand Ins. Co. v. Employers Ins. of Wausau, 974 F.
Supp. 1005, 1008-09 (S.D. Tex. 1997) (collecting Texas cases),
aff’d, 139 F.3d 1052 (5th Cir. 1998).
8
69 F.3d 1304 (5th Cir. 1995).
9
Id. at 1310.
10
Id. at 1310-11.
11
Id. at 1311.
4
guess in Stonebrand Insurance Company v. Employers Insurance of
Wausau.12
Those decisions control until such time as the Texas Supreme
Court speaks to this issue. Accordingly, we hold that Myers was
authorized to seek a judicial remedy for tort and other damages as
soon as her benefits were wrongfully denied. Her obligation to
exhaust administrative remedies applied only to her claim for the
benefits themselves. The statute of limitations therefore expired
before Myers filed her suit, and the district court was correct to
so hold.
AFFIRMED.
12
139 F.3d 1052, 1055 (5th Cir. 1998).
5