Texas Mutual Insurance Co. v. Sonic Systems International, Inc. , 2007 Tex. App. LEXIS 1125 ( 2007 )

SUPPLEMENTAL OPINION ON REHEARING

Appellee Sonic Systems International, Inc. filed a motion for rehearing in the referenced cause, which is denied. We issue this supplemental opinion, however, to address the issues raised by Sonic.

On rehearing, Sonic asserts that this court’s opinion contains two “substantial” analytical errors, as follows: (1) “it conflates [Sonic’s] status as a subclaimant with that of a subrogee,” and (2) it construes “[s]ection 406.075 [of the TWCA] to bar [Sonic’s] reimbursement claim that does not depend on any ‘election’” made by Cochran, Sonic’s employee. Specifically, Sonic argues that the opinion holds there is no distinction between a subclaim-ant and a subrogee and asserts its claim for reimbursement under section 409.009 is greater than that of a subrogee. Sonic also argues that a reimbursement claim is independent and not derivative of the employee’s right to recover.

As Sonic acknowledges in its rehearing motion, the issue in this case is one of first impression. For that reason, our opinion cites to several cases dealing with subrogation issues rather than subclaimants, but this does not mean the two concepts were conflated. The issue we address in the opinion is whether Sonic’s right to reimbursement under the TWCA is greater than Cochran's, not whether its rights are greater than a subrogee’s. There was no dispute that Sonic was seeking reimbursement as Cochran’s subclaimant, and the opinion does not attempt to define the parameters of that designation. As we note in footnote 18 of the opinion, “neither party raised any issues in the TWCC proceedings regarding Sonic’s pursuit of benefits as a ‘subclaimant’ or the import of that designation.” The opinion concludes that Sonic did not establish, as a matter of law, that it can recover under the TWCA as Cochran’s subclaimant if Cochran was, in fact, barred from recovery under the statute.

In its motion for summary judgment in the trial court, Sonic argued that section 406.075 had not been satisfied when it made payments to Cochran and, therefore, no remedy was obtained in Alabama until the judgment was entered and section 406.075 could not bar its reimbursement claim. Sonic also argued that there was no “election” under section 406.075 until Cochran recovered the Alabama judgment on July 13, 2001. Thus, by its arguments, Sonic conceded that receipt of the Alabama judgment was Cochran’s “election” to recover benefits under Alabama’s laws for purposes of section 406.075. The opinion notes there was no dispute that once Cochran received the Alabama judgment, he recovered benefits under Alabama’s laws for purposes of section 406.075 and no dispute that Sonic sought reimbursement after that election. The opinion does not address whether Sonic may have been able to recover payments had it filed the reimbursement claim prior to Cochran’s receipt of the Alabama judgment. As we noted, section 409.009 requires a subclaimant seek and be refused reimbursement from the insurance carrier. TMI refused reimbursement — according to Sonic — in 1997; however, Sonic did not pursue reimbursement benefits under the TWCA until after Cochran received the Alabama judgment. Further, Sonic received credit in the Alabama judgment for payments it made to Cochran — adjudicating those payments-— and, in the trial court, the parties indicated the payments may be characterized as “damages” in the underlying contract dispute. Sonic is not left without a remedy regarding those payments.

Finally, although Sonic claims its recovery under section 409.009 is not derivative of Cochran’s, it does not cite to any authority in support of its assertion. However, Sonic’s right to recover reimbursement is expressly as a “subclaimant,” thus implying the requirement of a “claimant” under the statute. While it is true section 409.009 does not expressly state that the subclaimant’s reimbursement claim is derivative of a claimant’s, construing the provision as a whole in relation to the entire TWCA, where a claimant is barred from recovering benefits, it follows that a subclaimant is similarly barred. See Am. Cas. Co. v. Martin, 97 S.W.3d 679, 686 (Tex.App.—Dallas 2003, no pet.) (stating, “threshold standard for the right to reimbursement is the existence of a com-pensable injury, and the amount of reimbursement is equal to the amount of benefits paid to the employee to which he was entitled.”).

If this court were to conclude Sonic was entitled to recover reimbursement under the circumstances of this case, we must conclude that Sonic’s rights as a subclaim-ant survived Cochran’s rights as a claimant. Sonic’s argument proposes that this conclusion is evidenced in the plain language of the provisions, but construing the statute as a whole, we disagree. Sonic failed to establish that its right to reimbursement under the statute as a “sub-claimant” survived or exceeded Cochran’s ability to recover benefits, as a matter of law.

Sonic’s motion for rehearing in Cause No. 14-05-00111-CV is denied.