Zurich American Insurance Co. v. Marta Diaz ( 2018 )

Affirmed in Part, Reversed in Part, Remanded, and Majority and Concurring and
Dissenting Opinions filed August 30, 2018.
In The
Fourteenth Court of Appeals
NO. 14-17-00295-CV
ZURICH AMERICAN INSURANCE CO., Appellant/Cross-Appellee
V.
MARTA DIAZ, Appellee/Cross-Appellant
V.
TEXAS DEPARTMENT OF INSURANCE – DIVISION OF WORKERS’
COMPENSATION AND COMMISSIONER RYAN BRANNAN, IN HIS
OFFICIAL CAPACITY, Cross-Appellees
On Appeal from the 201st District Court
Travis County, Texas
Trial Court Cause No. D-1-GN-13-001043
MAJORITY OPINION
We consider two overarching questions in this workers’ compensation case. The
first question is whether the trial court properly dismissed certain claims against an
administrative agency and its commissioner for lack of jurisdiction. We conclude that
the trial court made the correct ruling, and we affirm that portion of the trial court’s
judgment.
The second, and more substantive, question is whether Marta Diaz can recover
death benefits on behalf of her late husband, Encarnacion, who died several weeks after
suffering an on-the-job injury. Marta pursued her claim through the administrative
process, but her claim was denied because she filed it thirteen months after her
husband’s death, and the insurance carrier objected that the claim was filed after a one-
year statutory deadline. Marta sought judicial review of the administrative decision,
and the trial court granted her relief after ruling on a set of cross-motions for summary
judgment. The trial court held that the carrier untimely raised the statutory bar, or in
the alternative, that Marta established good cause for filing her claim after the one-year
deadline.
We conclude that the trial court erred by granting the summary judgment, and
that neither Marta nor the carrier is entitled to judgment as a matter of law.
Accordingly, we reverse that portion of the trial court’s judgment and remand for
additional proceedings consistent with this opinion.
I. BACKGROUND
Encarnacion suffered a severe injury on April 16, 2010, when he was burned by
hot oil while cleaning a fryer in the kitchen of a hotel. His employer promptly filed a
first report of injury with Zurich American Insurance Company, its workers’
compensation insurance carrier. Zurich notified the Division of Workers’
Compensation and then paid compensation benefits to Encarnacion from April 17,
2010 to May 14, 2010.
2
Encarnacion died at his home on May 13, 2010. Zurich initially contested that
Encarnacion’s death was work-related and did not pay death benefits to Marta, his
surviving spouse. Marta filed her claim for death benefits on June 21, 2011, more than
one year after Encarnacion’s death.
Zurich and Marta attended a benefit review conference (“BRC”) in November
2011. Following the BRC, the Division issued a report stating that the parties had
resolved one of their issues: they all agreed that Encarnacion had suffered a
compensable injury that resulted in his death. The report further stated that the parties
had two issues that were left unresolved. Those issues were (1) “Is [Zurich]’s defense
on compensability limited to the existence of injury resulting in death defense listed on
the Notice of Denial of Compensability and Refusal to Pay Benefits (PLN-[11]), that
was filed with the Division on 06/02/10?”; and (2) “If [Zurich]’s defense is not limited
to the existence of injury resulting in death defense listed on the Notice of Denial of
Compensability and Refusal to Pay Benefits (PLN-[11]), is [Zurich] relieved from
liability under TEX LABOR CODE ANN Section § 409.007 because of [Marta]’s
failure to timely file a claim for death benefits with the Division?”
The Division conducted a contested case hearing (“CCH”) in November 2012 to
decide the disputed issues remaining after the BRC. Following the CCH, the Division
issued a decision and order (the “CCH Decision”). The Division’s hearing officer
concluded that Marta was the proper legal beneficiary of Encarnacion, an issue which
is undisputed in this appeal. The officer further concluded that (1) Zurich’s right to
dispute compensability of Marta’s claim for death benefits was not limited to the basis
identified in its June 2, 2010 notice; (2) Zurich was relieved of liability under section
409.007 of the Texas Workers’ Compensation Act (the “Act”) because Marta failed to
file her claim within one year of Encarnacion’s death; and (3) Marta did not have good
cause for failing to file her claim timely.
3
Marta appealed to the appeals panel, but because the appeals panel did not issue
its own decision, the CCH Decision became the final decision of the appeals panel by
operation of law.1 Marta challenged that decision by filing a petition for judicial review
in district court. She named as defendants Zurich, the Division, and the Division’s
Commissioner, Rod Bordelon.2 As to Zurich, Marta requested the court to determine
that she was entitled to death benefits.3 As to the Division and the Commissioner, Marta
sought declarations that the Division and the Commissioner had “committed ultra vires
acts by failing to properly follow and enforce the Texas Workers’ Compensation Act
and [Division] rules.”
Zurich answered and filed a plea to the jurisdiction seeking dismissal of all of
Marta’s claims, including her declaratory judgment claims, to the extent they exceeded
the scope of issues decided during the administrative proceedings. The Division and
the Commissioner answered with a general denial and filed a Rule 91a motion to
dismiss based on sovereign immunity. The trial court denied the Division’s and the
Commissioner’s Rule 91a motion, but dismissed all claims against the Division and the
Commissioner by sua sponte granting a plea to the jurisdiction in their favor. The court
also granted Zurich’s plea to the jurisdiction as to Marta’s declaratory judgment claim
against it.
Marta and Zurich filed cross-motions for summary judgment on the remaining
issues, and the trial court signed a final judgment that:
1
See Tex. Lab. Code § 410.204(c).
2
Marta sued Bordelon in his official capacity only. During the pendency of this suit, Ryan
Brannan succeeded Bordelon as Commissioner of the Division. Thus, we refer to either individual
throughout this opinion by the official title of “Commissioner.”
3
Marta also asserted various Insurance Code and tort claims against Zurich, including claims
for alleged misrepresentations, violations of the common law duty of good faith and fair dealing,
violations of Texas Insurance Code section 541.061, unconscionability, and fraud. The trial court
granted summary judgment in Zurich’s favor on these claims, and Marta has not appealed that ruling.
4
(1) denied summary judgment for Marta on the issue of whether Marta’s one-
year deadline to file a death benefits claim was tolled because Zurich did
not file a report of death separate from the initial report of injury;
(2) granted summary judgment to Marta on the grounds that (a) Zurich did
not properly and timely raise the one-year limitations defense and Zurich
was limited to the compensability defense raised in its June 6, 2010 notice
disputing compensability, and (b) Marta alternatively had good cause for
filing her claim after the one-year deadline because Zurich failed to notify
her and the Division of the compensable death under 28 Tex. Admin. Code
§ 132.17;
(3) set aside the CCH Decision;
(4) ordered Zurich to pay death and burial benefits for Encarnacion’s
compensable work-related death, less attorney’s fees;
(5) ordered a lump-sum payment of attorney’s fees to Marta’s counsel;
(6) assessed court costs against Zurich; and
(7) awarded post-judgment interest on attorney’s fees, expenses, and court
costs of five percent.
Both Zurich and Marta have appealed the judgment. Marta also challenges the
trial court’s orders dismissing her claims against the Division and the Commissioner
and granting Zurich’s plea to the jurisdiction.
II. JURISDICTIONAL ISSUES
We begin with Marta’s challenges to the trial court’s dismissal of her declaratory
judgment claims against Zurich, the Division, and the Commissioner.
5
A. Standard of Review
Subject-matter jurisdiction is essential to the court’s authority to decide a case.
Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443–44 (Tex. 1993). It is
never presumed to exist. Id. The plaintiff bears the burden to allege facts affirmatively
demonstrating the trial court’s subject matter jurisdiction. Id. at 446. We review the
issue de novo. See State Dep’t of Highways & Pub. Transp. v. Gonzalez, 82 S.W.3d
322, 327 (Tex. 2002); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.
1998).
B. Sovereign Immunity and the Uniform Declaratory Judgments Act
The doctrine of sovereign immunity “bars suit against the state and its entities”
unless the state waives immunity. Tex. Adjutant Gen.’s Office v. Ngakoue, 408 S.W.3d
350, 353 (Tex. 2013) (quoting Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500,
512 (Tex. 2012)). The Uniform Declaratory Judgments Act (the “UDJA”) does not
provide a general waiver of sovereign immunity. City of El Paso v. Heinrich, 284
S.W.3d 366, 370 (Tex. 2009). Sovereign immunity bars UDJA actions against the state
and its political subdivisions “unless the Legislature has waived immunity for the
particular claims at issue.” Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 620 (Tex.
2011); see also Tijerina v. Tex. Prop. Cas. Ins. Guaranty Assoc., No. 03-13-00300-CV,
2015 WL 869344, at *3 (Tex. App.—Austin Feb. 26, 2015, pet. denied) (mem. op.).4
The UDJA does not waive sovereign immunity from a lawsuit seeking a declaration of
a claimant’s statutory or legal rights. Sefzik, 355 S.W.3d at 621.
However, the ultra vires exception to sovereign immunity permits private parties
to bring claims against state officials in their official capacities for nondiscretionary
4
Because this case was transferred to us by order of the Texas Supreme Court, we strive to
apply the precedent of the transferor court, which is the Third Court of Appeals. See Tex. R. App. P.
41.3.
6
acts unauthorized by law. Id. Such lawsuits are not “against the State” and therefore
are not barred by sovereign immunity. Id.; see also Heinrich, 284 S.W.3d at 373. To
fall within the ultra vires exception, a plaintiff must allege and show that the official
“acted without legal authority or failed to perform a purely ministerial act,” rather than
simply complain of an official’s exercise of discretion. Heinrich, 284 S.W.3d at 372.
C. “Redundant Relief” and the UDJA
When a claimant has invoked a statutory means of attacking an agency order, a
trial court lacks jurisdiction over an additional purported claim under the UDJA that
would merely determine the same issues and provide substantially the same relief as
the available statutory remedies invoked. See, e.g., Tex. Mun. Power Agency v. Pub.
Util. Comm’n of Tex., 253 S.W.3d 184, 199–200 (Tex. 2007) (citing BHP Petroleum
v. Millard, 800 S.W.2d 838, 841 (Tex. 1991) and Tex. Liquor Control Bd. v. Canyon
Creek Land Corp., 456 S.W.2d 891, 895 (Tex.1970)); Tex. Dep’t of State Health Servs.
v. Balquinta, 429 S.W.3d 726, 746–47 (Tex. App.—Austin 2014, pet. dism’d); Tex.
Dep’t of Transp. v. Sunset Transp., Inc., 357 S.W.3d 691, 705 (Tex. App.—Austin
2011, no pet.); Strayhorn v. Raytheon E-Sys., Inc., 101 S.W.3d 558, 572 (Tex. App.—
Austin 2003, pet. denied); Ben Robinson Co. v. Tex. Workers’ Comp. Comm’n, 934
S.W.2d 149, 153 (Tex. App.—Austin 1996, writ denied)). “[A] litigant’s couching its
requested relief in terms of declaratory relief does not alter the underlying nature of the
suit.” Tex. Parks & Wildlife Dep’t v. Sawyer Trust, 354 S.W.3d 384, 388 (Tex. 2011).
D. Marta’s Pleadings
Marta sought broad declarations regarding the tolling provisions of Chapter 409.
She also contended that the Division and the Commissioner had not “properly
interpreted, applied, and enforced the Texas Workers’ Compensation Act and the
[Division’s] previously adopted rules” (emphasis added). She requested a declaration
that “an insurance carrier must timely raise any disputes to the payment of workers’
7
compensation benefits in writing pursuant to Chapter 409” and “an insurance carrier is
limited to the grounds raised absent newly discovered evidence which could not
reasonably have been discovered earlier.” She further claimed that “the Commissioner,
and the Commissioner’s designees, have committed ultra vires acts by failing to
properly follow and enforce the Texas Workers’ Compensation Act and [Division]
rules as herein alleged.” She complained that “such actions or inactions do not follow
the proper construction of and are in violation of [the Act’s] Chapter 402, including
section 402.00116 and Chapter[] 409, including sections 409.005, 409.008, 409.010,
409.021, 409.022 and Chapter 410 including sections 410.163, 410.168” (emphasis
added). As is clear from Marta’s allegations, she challenged the Division and
Commissioner’s interpretation, application, and enforcement of the Act.
1. Immunity of the Division
As to the Division, Marta’s claims do not show a waiver of immunity because
the allegations are only asking for a declaration of her statutory or legal right. Sefzik,
355 S.W.3d at 621.
2. Immunity of the Commissioner
Marta contends the trial court had jurisdiction over her claims against the
Commissioner under the ultra vires exception to sovereign immunity. Patel, 469
S.W.3d at 76; Heinrich, 284 S.W.3d at 372. Marta has not alleged that the
Commissioner acted without legal authority or failed to carry out a non-discretionary
act; instead, her claims against the Commissioner are based on the Commissioner’s
administration and interpretation of the Act and its dispute resolution procedures.
Marta claims that the Commissioner’s interpretation and application of the Act are
incorrect, but she fails to allege or explain how the Commissioner’s interpretations of
the pertinent statutes and rules are outside his authority. And the ultra vires exception
simply “does not extend to allegations that an [official] reached an incorrect result
8
when exercising its delegated authority.” Id. (citing Creedmoor-Maha Water Supply
Corp. v. Tex. Comm’n on Envtl. Quality, 307 S.W.3d 505, 517–18 (Tex. App.—Austin
2010, no pet.)). Accordingly, the trial court did not err in dismissing Marta’s claims
against the Commissioner.
3. Zurich’s plea to the jurisdiction
Marta sought declaratory relief related to Zurich’s right to challenge the
timeliness of her death benefits claim, as well as the Division’s finding that Zurich was
relieved of liability. Her complaints and requested relief mirror the issues that are the
subject of her suit for judicial review. Such redundant relief is unavailable under the
UDJA. See Balquinta, 429 S.W.3d at 747 (explaining that a trial court lacks jurisdiction
over claim under UDJA that determines same issues and provides same relief afforded
under statutory remedies); accord Ben Robinson Co., 934 S.W.2d at 153 (“When a
statute provides a method for attacking an agency order, a declaratory judgment action
directed at that order will not lie.”).
For the foregoing reasons, the trial court did not err in dismissing on
jurisdictional grounds Marta’s claims for declaratory relief. We therefore overrule her
second issue, and turn to the parties’ judicial review issues.
III. JUDICIAL REVIEW ISSUES
A. Standard of Review
The trial court disposed of the remaining issues with rulings on a set of cross-
motions for summary judgment, which were submitted on both traditional and no-
evidence grounds. We review both types of motions de novo. See Boerjan v. Rodriguez,
436 S.W.3d 307, 310 (Tex. 2014) (per curiam).
In a traditional motion for summary judgment, the movant carries the burden of
showing that there is no genuine issue as to any material fact and that the movant is
9
entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); M.D. Anderson
Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam). If the
movant produces evidence that conclusively establishes its right to summary judgment,
then the burden of proof shifts to the nonmovant to present evidence sufficient to raise
a fact issue. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). We
consider all of the evidence in the light most favorable to the nonmovant, indulging
every reasonable inference and resolving any doubts in the nonmovant’s favor. See
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
In a no-evidence motion for summary judgment, the movant asserts that there is
no evidence of one or more essential elements of the claims for which the nonmovant
bears the burden of proof at trial. See Tex. R. Civ. P. 166a(i); Timpte Indus., Inc. v.
Gish, 286 S.W.3d 306, 310 (Tex. 2009). The burden then shifts to the nonmovant to
present evidence raising a genuine issue of material fact as to the elements specified in
the motion. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). We
will sustain a no-evidence motion for summary judgment when (1) there is a complete
absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact, (3) the evidence
offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence
conclusively establishes the opposite of the vital fact. See City of Keller v. Wilson, 168
S.W.3d 802, 816 (Tex. 2005).
When both parties move for summary judgment and the trial court grants one
motion and denies the other, we consider all questions presented, examine all of the
evidence, and render the judgment the trial court should have rendered. See Commr’s
Court of Titus Cty. v. Agan, 940 S.W.2d 77, 81 (1997).
10
B. Was the filing period tolled for Marta?
Marta moved for a partial summary judgment on the issue of tolling. She argued
that her one-year period to file a claim for death benefits never began to run because
Zurich filed a report of injury, but not a report of death. Without a report of death,
Marta argued that her filing period was automatically tolled.
Zurich argued in response that it was only required to file one report of injury
because there are no provisions in the Act expressly mandating that any additional or
supplemental reports be filed in the event that an injured employee subsequently dies.
If a second report is not required, Zurich argued that its failure to file such a report
would not toll Marta’s one-year period to file a claim for death benefits.
The trial court agreed with Zurich and denied Marta’s motion for summary
judgment.
1. The issue was presented to the Division.
Before we address the merits of the parties’ arguments, we first consider a
jurisdictional argument that Zurich raises on appeal. Zurich contends that the trial court
lacked jurisdiction over Marta’s tolling argument because that issue was not raised or
adjudicated before the Division.
The issues decided by the appeals panel are those decided in the CCH, as
developed by the record of that hearing. Tex. Lab. Code § 410.203; State Office of Risk
Mgmt. v. Martinez, 539 S.W.3d 266, 270 (Tex. 2017). The hearing officer at the CCH
is generally limited, in turn, to issues raised at the BRC. Tex. Lab. Code § 410.151;
Martinez, 539 S.W.3d at 270–71. Further, judicial review on issues regarding
compensability and benefits “is limited to issues decided by the commission appeals
panel and on which judicial review is sought.” Tex. Lab. Code § 410.302; see Martinez,
539 S.W.3d at 271; Ballard v. Arch Ins. Co., 478 S.W.3d 950, 955 (Tex. App.—
11
Houston [14th Dist.] 2015, no pet.); Trinity Univ. Ins. Co. v. Berryhill, No. 14-03-
00629-CV, 2004 WL 744417, at *3–4 (Tex. App.—Houston [14th Dist.] Apr. 8, 2004,
no pet.) (mem. op.). “The statutory scheme requires a claimant to exhaust the
claimant’s administrative remedies before filing a claim in the trial court.” Ballard, 478
S.W.3d at 955 (citing Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 803-04 (Tex.
2001); Tex. Lab. Code § 410.302(b)). So long as the general issue was decided by the
Division, a complaining party on judicial review may raise, at any time, any argument
in support of its position on that issue, even if the specific argument was not advanced
in the administrative proceeding. See Martinez, 439 S.W.3d at 273–75.
We do not have a transcript of the administrative proceedings, but the hearing
officer recited the facts of those proceedings in the CCH Decision. Those recitations
include the following:
Claimant argues in the alternative that carrier did not file an additional
DWC-1 at the time of decedent’s death. Because of this, the time for
claimant beneficiary to file a claim for death benefits is tolled. Carrier
filed its DWC-1 on April 19, 2010 for the original injury. Carrier argues
that this is unnecessary and not required by the Rules.
These recitations indicate that Marta presented her tolling argument to the
Division. Therefore, we conclude that the trial court had jurisdiction to consider the
same issue. See Martinez, 539 S.W.3d at 273–75; cf. Croysdill v. Old Republic Ins.
Co., 490 S.W.3d 287, 296 (Tex. App.—El Paso 2016, no pet.) (concluding that
employee exhausted administrative remedies and was entitled to judicial review of
grounds of which employee “argued vigorously” before hearing officer, despite hearing
officer not making specific findings or conclusions on these grounds; hearing officer
“impliedly rejected” claim by ruling against employee).
12
2. Section 409.005 requires only one report, not two.
Marta argued in her motion for summary judgment that section 409.005
required Zurich to file a second report after Encarnacion died, and that section 409.008
required tolling of the one-year period for filing a death benefits claim because Zurich
did not file this second report of death.
Marta’s argument finds no support in the text of either statute. Section 409.005
requires the employer to report to the carrier “an injury that results in the absence of an
employee of that employer from work for more than one day.” Id. § 409.005(a). The
carrier must then file the report with the Division. Id. § 409.005(d), (e). Section 409.005
contains no requirement to file a second report if a properly reported injury later results
in death. If the legislature intended to require an employer or carrier to file a report of
injury after the first day of lost time, and then a second report if the injured employee
subsequently died, the statute would say so. See Cornyn v. Univ. Life Ins. Co., 988
S.W.2d 376, 379 (Tex. App.—Austin 1999, pet. denied) (explaining that courts must
presume words used have a purpose and “every word excluded was excluded for a
purpose”).
As to section 409.008, it provides:
Failure to File Employer Report of Injury; Limitations Tolled
If an employer or the employer’s insurance carrier has been given notice
or has knowledge of an injury to or the death of an employee and the
employer or insurance carrier fails, neglects, or refuses to file the report
under Section 409.005, the period for filing a claim for compensation
under Sections 409.003 and 409.007 does not begin to run against the
claim of an injured employee or a legal beneficiary until the day on which
the report required under Section 409.005 has been furnished.
Tex. Labor Code § 409.008.
13
This tolling provision is only effective when “the employer or insurance carrier
fails, neglects, or refuses to file the report under Section 409.005.” Id. Because it is
undisputed that a report of injury was promptly made under Section 409.005, this
tolling provision would not excuse Marta’s late filing.
Marta does not cite any case authority supporting her interpretation of sections
409.005 and 409.008. Instead, she relies on cases in which an employer or carrier failed
to timely report an employee’s injury or death in the first instance. See Masuccio v.
Standard Fire Ins. Co., 770 S.W.2d 854, 856–57 (Tex. App.—San Antonio 1989, no
pet.) (late filing of claim for death benefits tolled by employer/insurer’s failure to file
report of injury or death); Houston Gen. Ins. Co. v. Vera, 638 S.W.2d 102, 106 (Tex.
App.—Corpus Christi 1982, write ref’d n.r.e.) (absence of report of injury tolled statute
of limitations, permitting recovery of compensation benefits after limitations period);
Grossman v. Emp’rs Ins. of Wausau, No. 13-95-302-CV, 1997 WL 33760928, at *3
(Tex. App.—Corpus Christi Mar. 20, 1997, no pet.) (not designated for publication)
(despite notice of injury on day it occurred, no report of injury filed until months after
untimely claim for compensation made; summary judgment improperly granted on
ground that limitations barred compensation claim). Not only do these cases relate to
previous versions of the Act, they are distinguishable because the employer or carrier
either did not file the requisite first report of injury or death at all, or filed the report
after the claimant had filed his or her claim for benefits. These cases do not support
Marta’s position that an employer or carrier, despite having complied with section
409.005 in reporting an employee’s injury, must also file a second report if the injured
employee subsequently dies from the reported work-related injury.
14
3. Rule 132.17(d) does not include a tolling provision.
Marta also claims that Zurich failed to comply with rule 132.17. See 28 Tex.
Admin. Code § 132.17(d).5 This rule governs the denial, dispute, and payment of death
benefits. Id. Although rule 132.17 requires a carrier to notify potential beneficiaries of
entitlement to death benefits, nothing in the rule tolls the deadline to file a claim should
the carrier fail to comply. Had the Division intended such a result, it could have
included language stating that the failure to provide notice to beneficiaries tolls the
deadline for a beneficiary to file a claim for death benefits. See Rodriguez, 997 S.W.2d
at 254 (in construing the Division’s administrative rule, the primary objective is to give
effect to the Division’s intent).
In sum, nothing in the statutory provisions or rules on which Marta relies
supports her position that the time to file her death benefits claim was tolled. Zurich
complied with the clear and unambiguous language of section 409.005 by timely filing
Encarnacion’s report of injury with the Division. Further, section 409.008 does not
trigger tolling when a timely reported injury results in death and a separate report of
death is not filed. Thus, we conclude the one-year time period for filing a death benefits
claim was not tolled.
The trial court correctly denied Marta’s motion for summary judgment on this
issue.
5
Rule 132.17(d) provides: “A carrier that identifies or becomes aware of a potential
beneficiary shall notify the potential beneficiary of potential entitlement to benefits, using a plain
language notice containing language and content prescribed by the Commission. This notice shall be
sent within seven days of the date the carrier identified or was otherwise made aware of the identity
and means of contacting the potential beneficiary.”
15
C. Is Marta’s claim time-barred under section 409.007?
The parties filed additional motions for summary judgment addressing section
409.007. That statute establishes the one-year deadline for filing claims of death
benefits, along with two exceptions. In pertinent part, the statute provides:
(a) A person must file a claim for death benefits with the division not later
than the first anniversary of the date of the employee’s death.
(b) Failure to file in the time required by Subsection (a) bars the claim
unless:
1. the person is a minor or incompetent; or
2. good cause exists for the failure to file a claim under this section.
Tex. Lab. Code § 409.007.
The Third Court of Appeals, from which this appeal was transferred, has likened
section 409.007 to a “limitations defense,” which a carrier can waive by failing to assert
it. See Tex. Workers’ Comp. Comm’n v. Tex. Mun. League Intergov’l Risk Pool, 38
S.W.3d 591, 599 n.11 (Tex. App.—Austin 2000), aff’d, 74 S.W.3d 377 (Tex. 2002)
(“TML Risk Pool”); see also Tex. Workers’ Comp. Comm’n, Appeal No. 94224, 1994
WL 121380, at *5 (Apr. 1, 1994) (making the same observation regarding a similar
provision under the Act).
Zurich has also likened the statute to an affirmative defense of limitations. In its
motion for summary judgment, Zurich argued that it was relieved from liability because
there was no dispute that Marta had filed her claim after the one-year anniversary of
Encarnacion’s death.
Zurich also addressed the two exceptions. Zurich argued that the first exception
did not apply because there was no dispute that Marta was neither a minor nor
incompetent. As for the second exception, Zurich framed its argument on both no-
evidence and traditional grounds. Zurich asserted that Marta had no evidence of good
16
cause. Zurich also argued that the good-cause arguments asserted by Marta in the
administrative proceedings were invalid as a matter of law.
Marta filed a combined motion for summary judgment and response. Marta
argued that she was entitled to judgment as a matter of law on either of two grounds:
(1) that Zurich had waived its limitations defense by not asserting it within sixty days
of the notice of Encarnacion’s death; or (2) that “good cause is established almost per
se” because Zurich failed to send her a plain language notice, as required by rule
132.17. In response to Zurich’s motion, Marta argued that she raised a fact issue as to
good cause for several reasons, including the following: (1) she did not realize that
Encarnacion’s death was work-related; (2) she does not read or speak English; (3) she
has a limited education from El Salvador; (4) she was not provided any information
from the Division or Zurich about filing a claim; (5) she only learned that Zurich no
longer disputed that Encarnacion’s death was work-related after she filed her claim;
and (6) Zurich “misled” her by failing to inform her that she might be entitled to death
benefits.
Zurich filed a reply, which reiterated its argument that Marta had not established
good cause. And in response to Marta’s waiver issue, Zurich argued that its burden to
assert a limitations defense did not arise until after Marta had filed her claim for death
benefits.
The trial court denied Zurich’s motion and granted Marta’s motion on both of
the theories asserted in that motion.6 We first consider whether either of those theories
is meritorious, beginning with the waiver issue.
6
The final judgment specifically says: “Further, the Court GRANTS Plaintiff’s motion for
summary judgment that Defendant Zurich only in writing disputed only the defense of course and
scope compensability of Encarnacion’s death and that Defendant Zurich failed to properly and timely
dispute in writing the defense of Marta Diaz not filing a claim within one year of death and the
Defendant Zurich did not establish any newly discovered evidence which could not have been
17
1. Zurich was not required to assert a limitations defense within sixty
days of the notice of death.
Marta’s waiver argument largely depends on sections 409.021 and 409.022 of
the Texas Labor Code. Citing these statutes, Marta contends that Zurich was required
to assert its limitations defense within sixty days of receiving notice of Encarnacion’s
death, and that Zurich’s failure to timely raise that defense resulted in waiver of the
defense.
Neither of these statutes expressly requires a carrier to assert the limitations
defense within sixty days of the notice of death. If they did, then in most cases, a carrier
would have to assert the defense preemptively because the carrier typically receives
the notice of death more than sixty days before the one-year limitations period has even
expired. Nothing in the Act or in our case law requires such a premature assertion of a
defense.7
The Act itself is silent as to when the carrier must assert the limitations defense.
When a statute does not fix a time limit for making a claim or defense, the law normally
imposes a reasonable time. See Midas Oil Co. v. Stanolind Oil & Gas Co., 179 S.W.2d
243, 245–46 (Tex. 1944); Traders’ & Gen. Ins. Co. v. Low, 74 S.W.2d 122, 124 (Tex.
App.—Amarillo 1934, writ ref’d). At least one commission appeals decision has
applied this “reasonable time” standard to a limitations defense under section 409.007.
See Tex. Workers’ Comp. Comm’n, Appeal No. 090075, 2009 WL 909268, *4 (Mar.
discovered earlier. The Court finds that Defendant Zurich American was limited to the defense of
compensability of Plaintiff’s claim to the death not being the result of the compensable injury which
was since been finally resolved as a compensable death by the Texas Department of Insurance—
Division of Workers’ Compensation. Further, the Court determines good cause exists for Marta
Diaz’s late filing of a claim due to Defendant Zurich’s failure to notify the Plaintiff and the DWC of
the compensable death under DWC Rule 132.17.”
7
Marta also cites to section 409.010 and rules 124.2, 132.10, and 132.17, but these authorities
do not support Marta’s position either because they are also silent about when the limitations defense
must be asserted.
18
26, 2009) (ruling self-insured employer waived section 409.007 defense because
employer did not raise it within “reasonable time” after discovering facts indicating the
defense might apply).
We conclude that Zurich was not required to assert its limitations defense within
sixty days of the notice of death, and that the trial court erred by granting summary
judgment to Marta on that basis.
2. Zurich’s failure to comply with rule 132.17 does not entitle Marta to
judgment as a matter of law.
Rule 132.17 provides the following:
A carrier that identifies or becomes aware of a potential beneficiary shall
notify the potential beneficiary of potential entitlement to benefits, using
a plain language notice containing language and content prescribed by the
Commission. This notice shall be sent within seven days of the date the
carrier identified or was otherwise made aware of the identity and means
of contacting the potential beneficiary.
28 Tex. Admin. Code § 132.17(d).
This rule was adopted in 2000 and it was effective ten years later at the time of
Encarnacion’s death, but Zurich never sent a plain language notice to Marta, as required
by the rule. According to Zurich, there was no notice to send at the time of
Encarnacion’s death because the Division had not made a notice available until 2012,
two years later.8
Marta argues that Zurich’s failure to send a plain language notice establishes
good cause for her late filing as a matter of law. This argument is indistinguishable
from the argument that we previously considered—and rejected—in connection with
the tolling issue.
8
The Division has approved plain language notices in both English and Spanish, and they are
both available for download at http://www.tdi.texas.gov/forms/form20plain.html.
19
Rule 132.17 says nothing about either tolling or good cause, and we must
presume that these omissions are deliberate. Cf. Fireman’s Fund Cty. Mut. Ins. Co. v.
Hidi, 13 S.W.3d 767, 769 (Tex. 2000) (per curiam) (“When the Legislature has
employed a term in one section of a statute and excluded it in another, we presume that
the Legislature had a reason for excluding it.”). A carrier’s failure to comply with the
rule may be a relevant factor in determining whether a beneficiary has good cause for
filing a claim late, but there is no basis for concluding that the carrier’s failure
establishes good cause as a matter of law.
We conclude that the theories specified in the trial court’s final judgment are not
meritorious, and that Marta was not entitled to judgment as a matter of law.
3. Zurich is not entitled to judgment as a matter of law either.
Zurich also contends that the trial court erred by denying its motion for summary
judgment. Zurich’s motion was submitted on traditional and no-evidence grounds, and
both of those grounds require us to consider whether Marta at least raised a fact issue
as to good cause.
Good cause in this context is measured by whether the claimant has pursued the
claim with such diligence as a reasonably prudent person would have used under the
same or similar circumstances. See Providence Lloyd’s Ins. Co. v. Smith, 828 S.W.2d
328, 329 (Tex. App.—Austin 1992, writ denied); City of Houston v. Garrett, 816
S.W.2d 800, 802 (Tex. App.—Houston [14th Dist.] 1991, writ denied). Generally, the
question of diligence is one of fact; however, when the evidence viewed most favorably
to the claimant negates good cause, the question becomes one of law. See Hawkins v.
Safety Cas. Co., 146 Tex. 381, 207 S.W.3d 370, 371–72 (1948); Maryland Cas. Co. v.
Kemp, 382 S.W.2d 322, 324 (Tex. Civ. App.—Houston 1964, writ ref’d n.r.e.); U.S.
Fid. & Guar. Co. v. Herzik, 359 S.W.2d 914, 916–17 (Tex. Civ. App.—Houston 1962,
writ ref’d n.r.e.).
20
Marta responded to Zurich’s motion with an affidavit, which set forth the
following facts regarding her claim of good cause. Marta testified that she initially did
not know why her husband died, but she believed that the death might have been the
result of bad health care. She used a lawyer referral service and found a lawyer who
agreed to represent her in a potential medical malpractice case. Through all of 2010,
she did not receive a single letter or speak to a single person from Zurich or the
Division. She contacted a new lawyer on June 20, 2011, and she filed her claim for
death benefits the very next day.
Marta testified that she has a limited sixth grade education from El Salvador, and
that she does not read or speak English. She also testified that she believes she has good
cause for filing a late claim because she was never provided any information about
filing a claim from either Zurich or the Division. She also believed that Zurich misled
her by not informing her that the death was work-related and that she may be entitled
to benefits.
Zurich argues that all of these factual excuses amount to a claim of ignorance of
the law, which does not demonstrate good cause.
A workers’ compensation claimant is presumed to know the law. See Allstate
Ins. Co. v. King, 444 S.W.2d 602, 605 (Tex. 1969); Garrett, 816 S.W.2d at 802.
Ignorance of workers’ compensation law does not constitute good cause for delay in
filing a claim. See King, 444 S.W.2d at 604–05 (ignorance of available workers’
compensation benefits and related filing requirements does not excuse delay in filing
claim); Garrett, 816 S.W.2d at 802 (“A workers’ compensation claimant is presumed
to know the law, and mere ignorance of the one-year filing requirement will not
constitute good cause for delay.”); Dillard v. Aetna Ins. Co., 518 S.W.2d 255, 257 (Tex.
Civ. App.—Austin 1975, writ ref’d n.r.e.) (same).
21
King, Garrett, and Dillard are cases brought by an injured worker, rather than a
beneficiary, and they all predate rule 132.17, which was adopted to aid beneficiaries in
asserting their claims timely. The plain language notice required by the rule and
approved by the Division clearly informs a claimant of the need to file a claim within
one year of the date of death.9 Zurich did not provide that notice, and even though the
Division had not yet approved a form by the time of Encarnacion’s death, Zurich
produced no evidence that it was unable to notify Marta due to the lack of a form.
Although Zurich’s failure to give notice does not establish good cause for Marta’s late
filing as a matter of law, it is a factor to consider in the good-cause analysis.
Marta testified by her affidavit to another fact that raises a fact issue of good
cause for late filing. Marta testified that her husband suffered burns, was treated, and
then returned home. He died at home over a month later. She testified that he did not
appear to have died from anything to do with the burn injuries. Case law has recognized
that a claimant may have good cause for late filing when the claimant did not know
that the death was work-related. See Davis v. Tex. Emp’rs Ins. Ass’n, 516 S.W.2d 452,
454–56 (Tex. Civ. App.—El Paso 1974, no writ); Allstate Ins. Co. v. Maines, 468
S.W.2d 496, (Tex. Civ. App.—Houston [14th Dist.] 1971, no writ); Hurd v. Republic
Underwriters, 105 S.W.2d 428, 429 (Tex. Civ. App.—El Paso 1937, writ dism’d).
Indeed, Zurich contested that Encarnacion’s death was work-related within sixty
days of Encarnacion’s death. Zurich never withdrew this contest and only admitted
compensability during the BRC in November 2011, some eighteen months after
Encarnacion’s death. Zurich did not negate Marta’s claim of good cause. A fact issue
remains.
9
The notice provides the following (with emphasis in the original): “Send the DWC042 form
no later than one year after the employee’s death to the Texas Department of Insurance, Division
of Workers’ Compensation (DWC). Instructions for how to send the form to DWC are on the form.”
22
IV. CONCLUSION
We affirm the portion of the trial court’s judgment that dismisses on
jurisdictional grounds Marta’s claims for declaratory judgment. We also affirm the
portion of the trial court’s judgment that denies Marta’s motion for summary judgment
on the issue of tolling. We reverse the remaining portions of the trial court’s judgment
and remand the case back to that court for additional proceedings consistent with this
opinion. Our resolution of these issues makes it unnecessary for us to address Zurich’s
complaint about Marta’s attorney’s fees because these fees “shall be payable from the
claimant’s recovery.” Tex. Lab. Code § 408.221(b).
/s/ Tracy Christopher
Justice
Panel consists of Justices Christopher, Donovan, and Jewell. (Jewell, J.,
concurring and dissenting).
23