Texas Department of Insurance—Division of Workers' Compensation and Commissioner Ryan Brannan, in His Official Capacity v. Dale Brumfield

ACCEPTED
04-15-00473-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
11/19/2015 4:36:46 PM
KEITH HOTTLE
CLERK
No. 04-15-00473-CV FILED IN
IN THE 4TH COURT OF APPEALS 4th COURT OF APPEALS
SAN ANTONIO, TEXAS
SAN ANTONIO, TEXAS 11/19/2015 4:36:46 PM
KEITH E. HOTTLE
Clerk
Texas Department of Insurance-Division of Workers Compensation and
Commissioner Ryan Brannan, in His Official Capacity, Appellants
V.
Dale Brumfield, Appellee
On appeal from the 288th District Court of Bexar County, Texas;
Cause No. 2015CI07374, the Honorable Larry Noll Presiding
DALE BRUMFIELD APPELLEE’S BRIEF
Bradley Dean McClellan
Of Counsel, Law Offices of Richard Pena, P.C.
State Bar No. 13395980
2211 South IH-35, Suite 300
Brad.McClellan@yahoo.com
Telephone: (512) 326-2622
Facsimile: (512) 326-2624
Counsel for Appellee, Dale Brumfield
November 19, 2015
Oral Argument Requested
Table of Contents
INDEX OF AUTHORITIES…………………………………………………………………………………....iii
ISSUES PRESENTED………………………………………………………………………….…….………...vi
APPELLANT’S BRIEF…………………………………………………………………….……….………..…1
SUMMARY OF THE ARGUMENT…………………………………………………………..………..…3
STATEMENT OF FACTS………………………………………..………………………………..……….. 8
ARGUMENT AND AUTHORITIES………………………………………………….…..................11
Issue No. 1 (in Response to Appellants’ Issues Nos. 1-4): Whether the District
Court properly exercised jurisdiction to determine a declaratory judgment
action brought to properly construe, interpret, and enforce applicable Texas
statutes against the state agency and the head of the state agency along with
the insurance carrier after administrative remedies have been exhausted and a
live controversy remains with allegations that the state defendants and the
insurance carrier have violated the statutes in question?
Dale Brumfield, the injured worker, properly sought a declaratory
judgment concerning a statutory challenge to the unlawful actions of the
Insurance Carrier, Zurich, and the Texas Department of Insurance-Division of
Workers’ Compensation, the DWC, and the DWC Commissioner where the DWC
and the Commissioner are alleged to have violated the law, unlawfully failed to
apply and enforce the law, and unlawfully issued a final decision contrary to the
law. 11
Response Issue No. 2 (In Response to Appellants’ Issue No. 5): A plaintiff
seeking declaratory relief should certainly be allowed to replead if a curable
defect exists in the pleading. 41
CONCLUSION & PRAYER………………………………………….…..………………….……..…..…42
Certificate of Compliance ………………………………………………………………..…..……..44
Certificate of Service ...………………………..….....……………………………….…..………….47
04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF ii
Index of Authorities
Cases
410.252 ................................................................................................................ 29
Beacon Nat 'I Ins. Co. v. Montemayor, 86 S.W.3d 260, 267 (Tex. App.-Austin 2002,
no pet.) ............................................................................................................. 25
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex. 2000) ...................... 31
Brewster v. Roicki, 468 S.W.3d 134 (Tex. App.--San Antonio May 13, 2015, no pet.)
................................................................................................................ 5, 26, 41
Brooks v. Northglen Ass'n, 141 S.W.3d 158, 163 (Tex. 2004) ............................... 21
Calvert v. Employees Ret. Sys. of Tex., 648 S.W.2d 418, 419 (Tex. App.--Austin
1983, writ ref'd n.r.e.)....................................................................................... 32
Campos v. Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 230 (Tex. App.—
Austin 2009, no pet.) ........................................................................................ 29
City of El Paso v. Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009) ................. 4, 14, 33
Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 712 (1945) ...................... 19, 32
Esquivel v. Mapelli Meat Packing Co., 932 S.W.2d 612, 616 (Tex. App.--San
Antonio 1996, pet. denied ................................................................................ 38
Hawkins v. El Paso First Health Plans, Inc., 214 S.W.3d 709, 716-18 (Tex. App.--
Austin 2007, pet. denied). .............................................................................19,33
Hernandez v Tex. Dep’t Ins., Workers’ Comp. Div., No. 04-14-00123-CV,2014 WL
3747306, at 2 (Tex. App.—San Antonio July 30, 2014, no pet.) ........................ 41
Houston General Insurance Co. v. Association Casualty Insurance Co., 977 S.W.2d
634 (Tex. App.—Tyler, no pet.) ......................................................................... 40
Howell v. Texas Workers' Compensation Com'n, 143 S.W.3d 416, 433 (Tex. App.--
Austin 2004, pet. denied). ................................................................................. 40
Mid-Century Insurance Company v. Texas Workers’ Compensation Commission,
187 S.W.3d 754 (Tex. App.—Austin 2006, no pet.). .......................................... 20
Nat'l Am. Ins. Co. and TDI-DWC and Commissioner Bordelon in his official capacity
v. Tex. Prop. & Cas. Ins. Guar. Ass'n, No. 03-09-00680-CV, 2013 WL 4817637,
2013 Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.) ......... 7, 22
Patel v. Tex. Dep't of Licensing & Regulation, Case No. 12-0657, ___S.W.3d___,
58 Tex. Sup. J. 1298, 2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015) . 4, 11, 12
Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238, 243 (Tex. 2012) .... 39
San Antonio v. Vasquez, 340 S.W.3d 844,847 (Tex. App.—San Antonio 2011, no
pet.) .................................................................................................................. 41
Spawglass Constr. Corp. v. City of Houston, 974 S.W.2d 876, 878 (Tex. App.--
Houston [14th Dist.] 1998, pet. denied) ............................................................. 32
iii
04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993) ........... 30
Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004) ......... 30
Tex. DOT v. Sefzik, 355 S.W.3d 618, 621-622 (Tex. 2011). .................................... 35
Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994). ........................... 34
Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 634-35 (Tex.
2010) ................................................................................................................ 34
Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 859-60 (Tex.
2002) ................................................................................................................ 34
Tex. Prop. & Cas. Guar. Ass'n v. Nat'l Am. Ins. Co., 208 S.W.3d 523, 533 (Tex. App.-
-Austin 2006, pet. denied). ............................................................................... 28
Tex. Workers' Compensation Ins. Fund v. Del Industrial, Inc., 35 S.W.3d 591, 596
(Tex. 2000)........................................................................................................ 39
Tex. Workers' Compensation Ins. Fund v. Tex. Workers' Compensation Comm'n &
Watts, 124 S.W.3d 813, 820 (Tex. App.--Austin 2003, pet. denied)................... 23
Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440 at 446 (Tex. 1993)
......................................................................................................................... 31
Texas Government Code section 2001.171 .......................................................... 28
Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891, 895
(Tex.1970) ........................................................................................................ 20
Texas Mun. Power Agency v. Public Util. Comm'n, 100 S.W.3d 510, 520 (Tex. App.-
-Austin 2003, pet. denied)................................................................................. 20
Texas Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.
2002) ........................................................................................................... 19, 33
Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n, 16
S.W.3d 61, 65 (Tex. App.-Austin 2000, no pet.)................................................. 31
Texas Workers' Compensation Commision v. Garcia, 893 S.W.2d 504 (Tex. 1995)
.................................................................................................................... 36, 37
Young Chevrolet, Inc. v. Tex. Motor Vehicle Bd., 974 S.W.2d 906,911 (Tex. App.--
Austin 1998, pet. denied) ................................................................................. 26
Statutes
Tex. Civ. P. & Rem. Code § 37.006 ....................................................................... 21
Tex. Civ. Prac. & Rem. Code §37.003(a) ............................................................... 40
Tex. Civ. Prac. & Rem. Code §5.062(a) ................................................................. 40
TEX. LAB. CODE §§ 406.005, 415.022....................................................................... 38
TEX. LAB. CODE §406.034(b) .................................................................................... 38
TEX. LAB. CODE CHAPTER 91, §91.0012 ...............................................................3,11,37
Texas Government Code sections 2001.174, 2001.175 ........................................ 28
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Texas Labor Code § 410.254 .................................................................................. 6
Texas Labor Code §410.252(b)(1) ........................................................................ 29
Texas Labor Code section 410.255 ....................................................................... 27
Other Authorities
DWC APPEAL NO. 050140, 2005 TX Wrk. Comp. LEXIS 57 (decided March 14,
2005) ................................................................................................................ 15
DWC APPEAL NO. 94994, 1994 TX Wrk. Comp. LEXIS 6081, September 9, 1994 .. 16
DWC APPEAL NO. 951802, 1995 TX Wrk. Comp. LEXIS 4964, December 13, 1995 17
DWC Appeal No. 990005, 1999 TX Wrk. Comp. LEXIS 3029, decided February 19,
1999 ................................................................................................................. 17
DWC Appeals Panel No. 071023-s, decided July 23, 2007, 2007 TX Wrk. Comp.
LEXIS 54. ........................................................................................................... 15
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Issues Presented
Issue No. 1 (in Response to DWC Appellant’s Issue Nos. 1-4): Whether the
District Court properly exercised jurisdiction to determine a declaratory
judgment action brought to properly construe, interpret, and enforce applicable
Texas statutes against the state agency and the head of the state agency along
with the insurance carrier after administrative remedies have been exhausted
and a live controversy remains with allegations that the state defendants and
the insurance carrier have violated the statutes in question?
Dale Brumfield, the injured worker, properly sought a declaratory
judgment concerning a statutory challenge to the unlawful actions of the
Insurance Carrier, Zurich, and the Texas Department of Insurance-Division of
Workers’ Compensation, the DWC, and the DWC Commissioner where the DWC
and the Commissioner are alleged to have violated the law, unlawfully failed to
apply and enforce the law, and unlawfully issued a final decision contrary to the
law.
Response Issue No. 2 (In Response to Appellants’ Issue No. 5): A plaintiff
seeking declaratory relief should certainly be allowed to replead if a curable
defect exists in the pleading.
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No. 04-15-00473-CV
IN THE 4TH COURT OF APPEALS
SAN ANTONIO, TEXAS
Texas Department of Insurance-Division of Workers Compensation and
Commissioner Ryan Brannan, in His Official Capacity, Appellants
V.
Dale Brumfield, Appellee
On appeal from the 288th District Court of Bexar County, Texas;
Cause No. 2015CI07374, the Honorable Larry Noll Presiding
DALE BRUMFIELD APPELLEE’S BRIEF
TO THE HONORABLE JUSTICES OF THE FOURTH COURT OF APPEALS:
Dale Brumfield, the Appellee and the Plaintiff below and the injured
worker, seeks a proper declaration, application, and enforcement of challenged
statutes which have been erroneously construed by the state agency with an ultra
vires order as well as the erroneous construction by the insurance carrier. Mr.
Brumfield has been wronged and continues to suffer illegal and unlawful
violations of the law of the Texas Workers’ Compensation Act and Chapter 91 of
the Texas Labor Code by the state agency and the agency’s executive officer, and
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04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
the insurance carrier. Declaratory relief against the state agency and the agency
head will stop this abuse from continuing and properly enforce the laws of Texas.
Mr. Brumfield is seeking the green light to proceed with his declaratory relief.
The Texas Department of Insurance-Division of Workers’ Compensation,
the DWC, unlawfully and incredibly issued a decision and order disallowing Dale
Brumfield’s statutory rights to workers’ compensation benefits and denying him
coverage when he did nothing wrong under the law. Such is not allowed under
the limited benefits provided to injured workers of this tort reform statute, and
the Texas Workers’ Compensation Act and Texas Labor Code.
This interlocutory appeal should be denied, and the District Court should be
allowed to hold the DWC and the DWC Commissioner (and the insurance carrier)
accountable to the follow and to enforce the laws of the State of Texas to protect
some of the limited statutory rights of injured workers.
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SUMMARY OF THE ARGUMENT
Under the Texas Workers’ Compensation Act two fundamental rights of
injured workers exists (1) unless the worker opts out of coverage within 5 days of
hire coverage exists, and (2) a covered employer may not split workforces to
avoid coverage of some employees. Chapter 91 of the Texas Labor Code
concerning professional service organizations does not change the law. In this
matter fundamental rights to the limited benefits of workers’ compensation
coverage have been violated and trampled upon by the state agency and the
insurance carrier. Under Chapter 91 of the Texas Labor Code and the Texas
Workers’ Compensation Act, Dale Brumfield complied with all the statutory terms
of coverage, only to have the Insurance Carrier and the state agency and state
official fail to properly interpret the statutes, fail to properly apply the statutes,
fail to properly enforce the statutes, and the state agency and official issued a
final erroneous decision issued about the statutes being challenged.
This statutory challenge declaratory matter involves a state agency, the
DWC, and the head of the agency, the DWC Commissioner, ignoring Legislative
statutes and acting beyond their power in allowing an insurance carrier to
attempt to evade the requirements of the Texas Workers’ Compensation Act.
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The DWC may not avoid being a necessary party to a statutory declaration
lawsuit concerning the statutes the agency is charged to regulate and to enforce
and to properly apply and which the agency and its head are accused of
unlawfully violating. Further, when the state agency acts beyond and in
derogation of its statutory authority, as plead herein, the state official is a proper
party to a lawsuit alleging such ultra vires acts and unlawful orders and decisions.
This is especially clear when administrative remedies have been exhausted and a
live controversy exists.
The Texas Supreme Court earlier this year in Patel v. Tex. Dep't of
Licensing & Regulation, Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298,
2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015) rejected analogous arguments
from a state agency attempting to claim analogous obstacles asserted in this
matter as to why the plea to the jurisdiction should be granted: immunity,
redundancy, ripeness. The Texas Supreme Court explained the rationale that in
Heinrich that “it is clear that suits to require state officials to comply with
statutory or constitutional provisions are not prohibited by sovereign immunity.”
City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).
This Court also recently rejected a governmental entities plea to the
jurisdiction where like here a state agency and its head acted without “without
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lawful authority statutory.” Brewster v. Roicki, 468 S.W.3d 134 (Tex. App.--San
Antonio May 13, 2015, no pet.). This Court in Roicki quoted from the Texas
Supreme Court and explained:
"'[S]uits to require state officials to comply with statutory or
constitutional provisions are not prohibited by sovereign immunity'" but
may proceed under the ultra vires exception. Tex. Dep't of Ins. v.
Reconveyance Servs., Inc., 306 S.W.3d 256, 258 (Tex. 2010) (per curiam).
State officials and state agencies may not ignore the law and the suits to require
compliance with statutes are allowed, and District Courts are certainly allowed to
make sure the executive branch of Texas follows the law especially where
administrative remedies have been exhausted.
The 3rd Court of Appeals previously rejected the DWC and the
Commissioner’s argument (and the Insurance Carrier’s position) that only judicial
review under Chapter 410 is permissible between the parties:
The Division argues that because the carriers are permitted to seek judicial
review of hearing decisions applying the advisories under section 410.251
of the labor code, they are barred from bringing declaratory judgment
actions under the UDJA challenging the same decisions.
The 3rd Court rejected the DWC’s similar arguments and concluded: “that the trial
court had jurisdiction over the declaratory judgment action pursuant to the
UDJA.” Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut.
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Cas. Co., 212 S.W.3d 870, 874-875 (Tex App.—Austin 2006, pet. denied). This
matter is not different except that a severely injured worker is seeking the judicial
declarations not multi-million dollar insurance companies.
The legal resolution of the statutory declarations in this matter will likely
resolve the controversy where the material and relevant facts are not disputed.
Without declarations, these legal questions will arise again and again and again as
to coverage under the Act and Chapter 91 of the Texas Labor Code. Workers’
compensation system participants, including the pertinent state agency and
official, are entitled to a final declaration of, interpretation, and enforcement of
the statutory terms by the Judicial Branch subject only to changes in the laws by
the Texas Legislature.
Texas Courts are duty bound to properly construe statutory requirements
especially where the Legislature’s will and expressly written statutes are clearly
ignored and unquestionably violated by a state agency and a regulated insurance
carrier.
How the DWC’s (and the Commissioner’s) position appears to be that it is
only allowed to intervene under Texas Labor Code § 410.254, but that the DWC is
somehow is not a necessary or proper party in such suits appears to create a
dichotomy. This allows the DWC to continually misapply and misinterpret the law
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04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
and act in violation of the law without being held accountable. The DWC and the
Commissioner’s similar jurisdictional pleas arguing immunity from declaratory
judgments were rejected by the 3rd Court of Appeals in 2006 in DWC v.
Lumbermens and in 2013, last year, in the Nat’l Ins. and DWC & Commissioner v.
TPCIGA decisions. Texas Dep. of Ins., Div. of Workers’ Compensation v.
Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex App.—Austin 2006, pet. denied);
Nat'l Am. Ins. Co. and TDI-DWC and Commissioner Bordelon in his official capacity
v. Tex. Prop. & Cas. Ins. Guar. Ass'n, No. 03-09-00680-CV, 2013 WL 4817637, 2013
Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.)
The DWC and the Commissioner are clearly necessary to have the Texas
Workers’ Compensation Act and other applicable statutes properly interpreted,
properly applied, and to correct unlawful violations of the Act in workers’
compensation disputes concerning legal rights.
If the DWC is correct, then the Judicial Branch of Texas government would
lose its oversight of the Executive Branches proper application, proper
interpretation, and proper enforcement of the laws adopted by the Texas
Legislature and state agencies would be free to violate the very statutes which the
agency and the state official are bound to uphold.
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This case involves a justiciable controversy, properly exhausted
administrative remedies, and clear questions of law concerning statutory
interpretations, alleged statutory violations by the DWC and failure to properly
apply the law and failure to properly enforce the law. The DWC and the
Commissioner cannot avoid the law and cannot hide from being required to
follow the law when the state agency’s actions violate the statutory
requirements.
Appellant is not seeking damages from the state Defendants. Appellant is
seeking to enforce the statutory rights improperly interpreted, improperly
applied, and improperly enforced, and unlawfully violated by the state Appellants.
ADDITIONAL STATEMENT OF FACTS
Dale Brumfield, Appellee, submits the following relevant procedural facts
and substantive facts to this Court. Dale Brumfield’s suit for declaratory relief
against both the state Defendants and the Insurance Carrier plead as follows (See
CR 1-14):
16. Mr. Brumfield asserts the need for declaratory relief against all
Defendants in this matter, and includes all the above sections, under the
Uniform Declaratory Judgments Act including under Texas Civil Practice &
Remedies Code section 37.004. The DWC and the DWC Commissioner, the
DWC Defendants, and the Insurance Carrier Defendant, Zurich American
Insurance Company, have not properly interpreted, followed, and applied
the applicable provisions of the Texas Labor Code, Texas Workers’
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Compensation Act and the DWC and the Insurance Carrier’s and the DWC
Defendants’ actions conflict with the Legislature’s adoption of Texas Labor
Code Section 91 and the proper interpretation of the Texas Workers’
Compensation Act provisions in favor of coverage, and the DWC’s
previously adopted rules.
17. Further, declaration is sought that pursuant to the Client
Service Agreement a covered employee is defined in paragraph 1.4 as,
“Employee” shall mean any and all workers assigned by eESI to clients
worksites pursuant to this agreement who have completed and signed an
employment application with eESI.
18. The claimant received filled out and returned to eESI a copy of
the Application for Employment Personal Information Sheet on January 18,
2014. Further, declaration is sought that pursuant to Paragraph 1.3 of the
Client Service Agreement, describes the effective date of employment as:
shall mean the first day of the first pay period that eESI coemploys an
employee at the Client’s worksite.
19. Further, declaration is sought that in connection with Texas
Labor Code Ann. Sec. 91.0012 that the statutory terms of a covered
employee were met regardless of any contractual terms which conflict with
the statutory requirements. This Court should so declare that a worker
who fills out and completes an employment application assigning the
workers to the Client company is a covered employee.
20. Further, this Court should declare that that the relationship
between eESI and the Client company was pursuant to a Professional
Employer Services agreement in compliance with this chapter 91 of the
Texas Labor Code.
19. Pursuant to Sec. 91.032. (a) A professional employer services
agreement between a license holder and a client must provide that the
license holder: (4) shares, as provided by Subsection (b), with the client the
right to hire, fire, discipline, and reassign the covered employees. The eESI
handbook provided to the Claimant indicates that this relationship existed,
and this Court should so declare. Further, this Court should declare that
despite any provision in the contract to the contrary, Double M Services,
LLC. had the right to hire employees and/or terminate their employee
relationship and still have these employees maintain their status as a
covered employees.
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20. Claimant should be held as a covered employee pursuant to
the applicable law as stated in the contract and under Texas Labor Code
Ann. Sec. 91.042(c) and including application of sections 406.005, 406.034,
408.001 and 411.032, and this Court should so declare. Further, this Court
should declare pursuant to the Client Services Agreement, the drafters of
the agreement stated in section 1.8 that:
“Professional Employer Services” shall mean services provided
by eESI defined as “staff leasing services” in the laws of the State, (and by
such other rules, regulations and statutes promulgated by the State)…”
This Court should declare that the intent of the drafters of this
contract were to be bound by the specific Texas laws and rules, including
Texas Labor Code Section 91, which expressly creates a coemployer
relationship between eEmployer Solutions, Inc. and the client company,
Double M Services, LLC. In section 3.2 of the Client Service Agreement, eESI
affirms this relationship specifically, in compliance with applicable law, that
“eESI and Client will be considered co-employers (“dual, joint, or shared
employers”) of the employees for the following purposes and have joint
responsibility for these services. This Court should so declare that pursuant
to the applicable law, as well the enforceable contract terms, that the
Claimant was a covered employee for purposes of Workers Compensation,
as the laws of the State are controlling in this matter.
21. The DWC Defendants, which include the DWC Commissioner,
acted beyond their statutory authority in failing to properly apply, interpret
and enforce the statutes and rules for which declaratory relief is sought.
DWC Defendants cannot adopt and apply statutory interpretations and
administrative rules which are inconsistent with and in conflict with the
Texas Labor Code.
The District Court denied the state Defendants’ and the Insurance Carrier’s pleas
to the jurisdiction allowing Mr. Brumfield’s declaratory suits to proceed. CR 59,
Supp CR 2, 5. This interlocutory appeal followed by the state Defendants.
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ARGUMENT & AUTHORITIES
Issue No. 1 (in Response to DWC Appellant’s Issue Nos. 1-No.4): Whether the
District Court have jurisdiction to determine a declaratory judgment action
brought to properly construe, interpret, and enforce applicable Texas statutes
against the state agency and the head of the state agency after administrative
remedies have been exhausted and a live controversy remains with allegations
that the state defendants and the insurance carrier have violated the statutes in
question?
Dale Brumfield, the injured worker, properly sought a declaratory
judgment concerning a statutory challenge to the unlawful actions of the
Insurance Carrier, Zurich, and the Texas Department of Insurance-Division of
Workers’ Compensation, the DWC, and the DWC Commissioner where the DWC
and the Commissioner are alleged to have violated the law, unlawfully failed to
apply and enforce the law, and unlawfully issued final decision contrary to the
law.
Dale Brumfield seeks to correct and to prevent the legal and procedural
abuses and unlawful DWC orders which no injured worker should have to endure
through the DWC’s and the DWC Commissioner’s erroneous and unlawful
interpretation, construction, application, and enforcement of the challenged
statutory requirements denying workers’ compensation coverage.
The Texas Supreme Court recently in Patel v. Tex. Dep't of Licensing &
Regulation, Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298, 2015 Tex.
LEXIS 617, *11-12 (Tex. June 26, 2015) rejected analogous arguments to the
DWC’s from another state agency attempting to claim the same three obstacles
asserted in this matter: sovereign immunity, redundancy, ripeness.
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1. State Agency Immunity is Waived When Statutes are Challenged as Not
Being Properly Applied and Enforced as Again Explained by the Texas
Supreme Court in Patel.
The Texas Supreme Court, in rejecting a state agency’s arguments for
immunity in a jurisdictional plea, made clear this in Patel:
. . . in Heinrich we clarified that HN5 "[f]or claims challenging the validity of
. . . statutes . . . the Declaratory Judgment Act requires that the relevant
governmental entities be made parties, and thereby waives immunity." Id.
(citing Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994)). And
we have reiterated the principle more recently. See Tex. Dep't of Transp. v.
Sefzik, 355 S.W.3d 618, 621-22 & n.3 (Tex. 2011) (restating that state
entities can be—and in some instances such as when the constitutionality
of a statute is at issue, must be—parties to challenges under the UDJA);
Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 634
(Tex. 2010) (holding that allegations against the lottery commissioner were
not ultra vires allegations because the claim challenged a statute and was
not one involving a government officer's action or inaction).
Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617, *11-12 (Tex.
June 26, 2015); Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617,
*11-12 (Tex. June 26, 2015). The Court allowed declaratory judgment for a
statutory challenge to proceed and required the relevant governmental entities
be made parties, and this is exactly what Dale Brumfield has plead.
2. Declaratory Remedies To Prevent Future Identical Abuses
The Texas Supreme Court in Patel rejected the redundancy argument because
the mere judicial review of an agency order would be limited to that particular
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order and not declarations of rights and protection against future attempts to
misapply the law under the statutes:
The available remedies on appeal from an administrative finding are limited
to reversal of the particular orders at issue. Id. But the Threaders seek more
than a reversal of the citations issued to Momin and Yogi. They seek
prospective injunctive relief against future agency orders based on the
statutes and regulations. Accordingly, because the declaration sought goes
beyond reversal of an agency order, Section 2001.174 of the APA does not
provide a redundant remedy.
Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617, *18-19 (Tex.
June 26, 2015); Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617,
*18-19 (Tex. June 26, 2015). As Dale Brumfield has plead beyond just the
reversal of the DWC and the DWC Commissioner’s final decision and order: 1
21. The DWC Defendants, which include the DWC Commissioner, acted
beyond their statutory authority in failing to properly apply, interpret and
enforce the statutes and rules for which declaratory relief is sought. DWC
Defendants cannot adopt and apply statutory interpretations and
administrative rules which are inconsistent with and in conflict with the Texas
Labor Code.
This matter goes beyond just enforcement against the Insurance Carrier but to
make sure Dale Brumfield is not again put through this unlawful process by the
Appellees, the DWC Defendants. This law should be properly applied without
legal errors being repeated.
1
CR 7, See Paragraph 21 Plaintiff’s Petition
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3. Ripeness is Shown by Mere Initial State Action—Here an Erroneous Final
State Decision & Order Exists.
Dale Brumfield’s claims are ripe and certainly are not due to conjecture
because she has exhausted administrative remedies and the state agency has
erroneously interpreted and erroneously issued final decisions contrary to his
rights as an injured worker. In Patel, the Texas Supreme Court determined that
declaratory claims were ripe with just complaints being filed without even final
agency enforcement decisions:
Here, although [plaintiffs] have not yet faced administrative enforcement,
the threat of harm is more than conjectural, hypothetical, or remote.
[Plaintiff] has received two warnings for employing unlicensed threaders,
and he has been referred to TDLR's legal department for enforcement.
Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617, *16 (Tex. June
26, 2015). The Texas Supreme Court explained the rationale in Heinrich that “it is
clear that suits to require state officials to comply with statutory or constitutional
provisions are not prohibited by sovereign immunity.” City of El Paso v. Heinrich,
284 S.W.3d 366, 372 (Tex. 2009).
4. Enforceability is Critical. The DWC Argues its Right to Intervene Shows
that it Cannot Be Made a Party under Chapter 410.
The District Court properly rejected the DWC’s pleas to the jurisdiction, and
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yet the DWC argues in part: “The notice requirement in subsection (a)(3) would
be superfluous if the Division was a proper defendant to suits for judicial review.”
See TEX. LAB. CODE §410.253(a)(3); Fn.2 of Appellants’ Brief.
The DWC’s stated position on individual Chapter 410 judicial review cases is
that mere district court reversals of a final DWC decision under Chapter 410 of
the Texas Labor Code are not binding as to the DWC’s interpretation even if it is
improper as to any other case. The DWC Appeals Panel has reiterated that:2
that the decision of a [city 1] District Court had no effect "beyond its factual
context" and did not bind the Texas Workers' Compensation Commission
(Commission) as a matter of stare decisis in the Commission's interpretation
of the 1989 Act.
This shows the Catch-22 that the DWC places all parties under that the DWC and
Commissioner’s disregard for a court decision beyond “its factual content” unless,
as here, the DWC and Commissioner are made parties or intervene. This matter
is of significant public importance and concerns the very basic rights to limited
benefits of injured workers.
Only after the appellate decision upholding declaratory judgment in
Lumbermens become final did the DWC Appeals Panel follow the declaration:3
2
DWC APPEAL NO. 050140, 2005 TX Wrk. Comp. LEXIS 57 (decided March 14,
2005)
3
DWC Appeals Panel No. 071023-s, decided July 23, 2007, 2007 TX Wrk. Comp.
LEXIS 54.
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Lumbermens Mutual Casualty Company filed suit against the Division seeking
in part a declaratory judgment that the Advisories are inconsistent with 28
TEX. ADMIN. CODE § 130.1 (Rule 130.1) and that their issuance and
application is outside the Division's statutory authority.
The Advisories have been declared invalid and their application an ultra vires
act. Lumbermens, supra. Therefore, the adoption of an IR that is based on
the Advisories is legal error and must be reversed. Prior Appeals Panel
decisions applying the Advisories to rate impairment for spinal fusion surgery
have been overruled by the Lumbermens case.
The DWC will follow a declaratory judgment as to statutory rights and its prior
errors, but will not apply a District Court’s reversal of a single workers’
compensation dispute decision beyond the single workers’ compensation claim.
The DWC’s own decisions signify why declaratory judgments are allowed and
clearly necessary in this matter.
Here are several more final DWC decisions from over the years refusing to
follow the law in District Court cases:
(1) DWC APPEAL NO. 94994, 1994 TX Wrk. Comp. LEXIS 6081, September 9,
1994: “. . . nor is the Commission joined as a party. The decision is without
effect, therefore, beyond its factual context, and certainly the Commission
is not bound by such a general judgment of a district court, through stare
decisis, in its interpretation of the Section 409.021.” (Emphasis added.)
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(2) DWC APPEAL NO. 951802, 1995 TX Wrk. Comp. LEXIS 4964, December 13,
1995, emphasizing: “We do not consider the Appeals Panel bound by this
district court opinion in a case involving other parties and in which the
commission did not participate.”
(3) DWC Appeal No. 990005, 1999 TX Wrk. Comp. LEXIS 3029, decided
February 19, 1999: “The Appeals Panel is not bound by a district court
opinion in a case involving other parties and in which the Commission did
not participate. Texas Workers' Compensation Commission Appeal No
94994, decided September 9, 1994.” (Emphasis added.)
Dale Brumfield is legally correct in seeking declaratory relief against the DWC and
the Commissioner in a proceeding in which legal determinations are sought to
bind the DWC and the Commissioner.
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5. Declaratory Relief is Available to Have a Statute Construed Especially
Where a State Agency Erroneously Applies a Statute
Dale Brumfield properly exhausted administrative remedies, and she has
properly sought declaratory relief beyond the DWC determinations. Any party
which has exhausted DWC’s administrative remedies or even without exhaustion
when the DWC is erroneously applying and/or enforcing matters not found and
not supported in the Texas Workers’ Compensation Act may seek declaratory
relief. The DWC has no jurisdiction to make declaratory judgments. The Texas
Supreme Court reiterated that Declaratory Judgment Act suits to construe
statutes are expressly allowed jurisdictionally against a state agency, and the
DWC has unquestionably joined this lawsuit. Texas Lottery Commission v. First
State Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010). With the intervention of the
DWC, the declaratory relief sought by Mr. Brumfield against both the Insurance
Carrier and the DWC is clearly proper. Further, the DWC Commissioner is proper
because the final action of the DWC is erroneous and in violation of the statutory
terms which the DWC Commissioner is bound to enforce under Texas Labor Code
Chapter 402, including Section 402.0018.
The Supreme Court in DeQueen reiterated that jurisdiction existed over
state agencies for statutory challenges and citing to Leeper explained:
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[T]he DJA permits statutory challenges and governmental entities
may be bound by those challenges, the DJA contemplates entities must be
joined in those suits. Leeper, 893 S.W.2d at 446.
Dale Brumfield seeks declaratory relief against Zurich and the DWC and the DWC
Commissioner in this matter. CR
A justiciable controversy regarding whether a state agency or officer has acted
beyond statutory authority provides a jurisdictional basis for a UDJA action
seeking construction of that statutory authority, and this in addition to whether
the private insurance company Zurich acted beyond any statutory authority. This
type of UDJA action does not implicate sovereign immunity. Cobb v. Harrington,
144 Tex. 360, 190 S.W.2d 709, 712 (1945); see also Texas Natural Res.
Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002) (“Private parties
may seek declaratory relief against state officials who allegedly act without legal
or statutory authority.”). A suit for declaratory relief is not a suit against the State
because it does not seek to impose liability or money damages against the state
agency. IT-Davy, 74 S.W.3d at 853; Hawkins v. El Paso First Health Plans, Inc., 214
S.W.3d 709, 716-18 (Tex. App.--Austin 2007, pet. denied). A UDJA claim is sui
generis; and, all other things being equal, a District Court's subject matter
jurisdiction over it exists independently of any administrative remedies, which
have been exhausted. Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456
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S.W.2d 891, 895 (Tex.1970); Cobb, 190 S.W.2d at 713; see Texas Mun. Power
Agency v. Public Util. Comm'n, 100 S.W.3d 510, 520 (Tex. App.--Austin 2003, pet.
denied).
The Third Court in Lumbermens upheld the jurisdiction of a District Court
under application of the Uniform Declaratory Judgments Act, UDJA, in which a
number or insurance companies sought declaratory relief against the DWC. Texas
Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212
S.W.3d 870 (Tex App.—Austin 2006, pet. denied). The Lumbermens court stated:
Accordingly, we hold that the trial court had jurisdiction under the UDJA
and overrule the Division's second issue.
Lumbermens at 875. The authority clearly exists to use the UDJA, specifically
§37.004, to pursue a declaration of statutory interpretation even when a rule
violates the Texas Workers’ Compensation Act. Mid-Century Insurance Company
v. Texas Workers’ Compensation Commission, 187 S.W.3d 754 (Tex. App.—Austin
2006, no pet.). The Austin Court of Appeals noted that:
Mid-Century Insurance Company (Mid-Century) sought a declaration
that this rule exceeds the Division's statutory powers and is thus invalid.
See Tex. Civ. Prac. & Rem. Code Ann. § 37.004 (West 1997).
Id. at 756. So maybe the Zurich believes everyone but injured workers should be
able to bring a declaratory action, but the reality is all sides have properly sought
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declaratory relief in the past, and Mr. Brumfield’s declaratory request here is
proper.
6. Declaratory Relief is Proper & Needed When the DWC & the
Commissioner Misapply the Law and Violate the Law.
The DWC and the Commissioner appear to allege declaratory relief is not
available at all against the DWC and the Commissioner. All parties involved will
be affected by the declaratory judgment action and to be of any force and effect,
the UDJA unequivocally mandates:
(a) When declaratory relief is sought, all persons who have or claim any
interest that would be affected by the declaration must be made parties. A
declaration does not prejudice the rights of a person not a party to the
proceeding.
TEX. CIV. P. & REM. CODE § 37.006. See Brooks v. Northglen Ass'n, 141 S.W.3d 158,
163 (Tex. 2004) (The Texas Supreme Court noted that no fault and no prejudice
lies with non-parties to the UDJA). If the Appellants, the DWC and the
Commissioner, were not parties, then they would not be bound to follow the
District Court’s declarations.
7. The DWC and Commissioner Previously Have Been Determined Proper
Parties in UDJA Actions
The 3rd Court of Appeals recently emphasized that a declaratory judgment
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action is allowed for matters within and proper where a party “asked the court to
declare its rights and status under certain statutory provisions” involving the
Texas Workers’ Compensation Act. Nat'l Am. Ins. Co. and TDI-DWC and
Commissioner Bordelon in his official capacity v. Tex. Prop. & Cas. Ins. Guar. Ass'n,
No. 03-09-00680-CV, 2013 WL 4817637, 2013 Tex. App. LEXIS 10865 (Tex. App.--
Austin Aug. 28, 2013, no pet.) (mem. op.). The 3rd Court rejected the DWC’s and
the Commissioner’s position that the trial court did not have jurisdiction to
construe the statutes in issue and determined in part that “the trial court had
jurisdiction to construe the statutes in issue.” Id. The statutes in issue all were
sections of the Texas Workers’ Compensation Act under the Texas Labor Code.
The parties were an insurance carrier, TPCIGA acting on behalf of an insurance
carrier in receivership, and the DWC and the Commissioner. This Court should
also allow a declaratory judgment to proceed to enforce compliance with the
statutory terms. As the 3rd Court of Appeals explained in upholding the right to
declaratory relief in the Nat’l American case:4
A declaratory judgment action is proper only if a justiciable controversy exists
as to the rights and status of the parties and the controversy will be resolved
by the declaration sought. Bonham State Bank v. Beadle, 907 S.W.2d 465,
467 (Tex. 1995).
A clear controversy exists with regards to the DWC and the Commissioner’s
4
Id.
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proper application and proper enforcement of the statutory requirements and to
prevent future violations of the law.
8. Insurance Carriers Are Allowed Declaratory Actions Against the TWCC and
the DWC (now the DWC).
In 2003, the Third Court of Appeals allowed one insurance carrier to bring a
declaratory judgment action against the injured worker and the Texas Workers’
Compensation Commission, the predecessor to the DWC, after having exhausted
administrative remedies was proper under the Uniform Declaratory Judgment
Act. Tex. Workers' Compensation Ins. Fund v. Tex. Workers' Compensation
Comm'n & Watts, 124 S.W.3d 813, 820 (Tex. App.--Austin 2003, pet. denied). The
3rd Court of Appeals in TWCIF v. TWCC allowed a declaratory action but agreed
with the TWCC’s statutory interpretation.
In 2006, the Third Court of Appeals in Lumbermens upheld the jurisdiction of
the district court under the Uniform Declaratory Judgments Act, UDJA after an
analogous matter arising out of a Chapter 410 proceeding. Texas Dep. of Ins., Div.
of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex
App.—Austin 2006, pet. denied). The Lumbermens court stated:
The UDJA does not confer jurisdiction on trial courts; rather, it is merely a
procedural device for deciding cases already within a court's jurisdiction. . . .
Accordingly, we hold that the trial court had jurisdiction under the UDJA and
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04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
overrule the Division's second issue.
Lumbermens at 875. The authority clearly exists to use the UDJA, specifically
§37.004, to pursue a declaration of statutory interpretation even when a rule
violates the Texas Workers’ Compensation Act for cases which administrative
remedies have been exhausted under Chapter 410.
The 3rd Court in the Lumbermens case, TWCIF v TWCC, and the Nat’l Amer.
and TDI-DWC v. TPCIGA, simply allowed and upheld declaratory judgments with
the DWC as a proper party. In each case including the case decided last year, the
DWC objected to the declaratory actions; however, the 3rd Court of Appeals
allowed each declaratory action to proceed and determined the meaning of the
statutes in question. These three declaratory actions determined statutory rights
in matters like this one arising after exhaustion of administrative remedies under
Chapter 410 of the Texas Labor Code. This is a case challenging the state agency
and the insurance carrier’s improper application, interpretation, and lack of
compliance and enforcement of state laws. When the Legislature adopts a law
that medical benefits may not be limited in time, the DWC and the DWC
Commissioner must follow that law.
The TWCIF v. TWCC and the Lumbermens cases were brought as a
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04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
declaratory judgment action in conjunction with challenging a final decision from
the Chapter 410 dispute process in the Texas Labor Code. Likewise, the Nat’l
Amer. v. TPCIGA also was brought as a declaratory judgment action subsequent to
a final Chapter 410 contested case hearing yet in a separate proceeding. These
cases illustrate the need for an actual controversy and that Courts are allowed to
address declaratory judgments on matters within their jurisdiction and certainly
after administrative remedies have been exhausted.
9. The DWC and the Commissioner Rely upon Inapplicable and
Distinguishable Decisions as to Redundancy
The Appellants assert: While Mr. Brumfield attempts to characterize the
Division and the Commissioner as “necessary parties” to his suit (C.R. at 1), such a
challenge is wholly contained within his suit for judicial review. Mr. Brumfield
does not provide any legal basis for his UDJA action that is not redundant of his
suit for judicial review. Appellants’ Brief p. 15 fn 3. In Beacon Nat 'I Ins. Co. v.
Montemayor, 86 S.W.3d 260, 267 (Tex. App.--Austin 2002, no pet.). In Beacon v.
Montemayor, the 3rd Court of Appeals explained:
The UDJA waives this immunity when a party seeks a court's construction of
a statute or rule. City of LaPorte v. Barfield, 898 S.W.2d 288, 297, 38 Tex. Sup.
Ct. J. 533 (Tex. 1995). Beacon's action does not seek construction of a statute
or rule; . . . .
This shows that the party seeking the declaration in Beacon did not seek proper
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statutory construction or clarification unlike the declaratory requests here and
the state agency was a party to the proceeding.
The state Appellants rely upon distinguishable cases and rely in part upon
Young Chevrolet, Inc. v. Tex. Motor Vehicle Bd., 974 S.W.2d 906,911 (Tex. App.--
Austin 1998, pet. denied), which also involved direct actions against the state
regulatory agency as a party creating enforceability against the agency without
the need for a declaration.
The state Appellant’s also rely upon Harvel and other cases where the
governmental entity was sued and found to have immunity from suit for
declaratory relief but not immunity if ultra vires claims were alleged as herein.
Harvel v. Tex. Dep't of Ins.-Div. of Workers' Comp., 13-14-00095-CV, 2015 Tex.
App. LEXIS 5159, 2015 WL 2452703 (Tex. App.--Corpus Christi 2015, pet. filed)(13th
Court of Appeals determined sovereign immunity bars the claims against state
agency not an ultra vires claim.) Harvel was decided prior to the controlling
decision of the Texas Supreme Court in Patel, supra, and conflicts somewhat with
this Court’s decision in Brewster v. Roicki, supra.
This Court in Roicki recognized a legitimate declaratory relief action and
explained the law aptly:
"'[S]uits to require state officials to comply with statutory or constitutional
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provisions are not prohibited by sovereign immunity'" but may proceed
under the ultra vires exception. Tex. Dep't of Ins. v. Reconveyance Servs.,
Inc., 306 S.W.3d 256, 258 (Tex. 2010) (per curiam) (quoting City of El Paso v.
Heinrich, 284 S.W.3d 366, 372 (Tex. 2009)); accord Tex. Dep't of Transp. v.
Sefzik, 355 S.W.3d 618, 620 (Tex. 2011) (per curiam). The ultra vires
exception waives a government official's immunity in certain circumstances
including where "the officer acted without legal authority." Heinrich, 284
S.W.3d at 372; accord Sefzik, 355 S.W.3d at 620.
Brewster v. Roicki, 468 S.W.3d 134, 138 (Tex. App.—San Antonio 2015, no pet.).
In this matter Mr. Brumfield has clearly plead the state official did not comply
with statutory provisions and such falls under the ultra vires exception.
Although the DWC is not a mandatory party under Chapter 410 disputes,
except under Section 410.255, and the only method to enforce proper statutory
construction and enforcement against the DWC and the Commissioner is, simply
and legally, to make the DWC and the Commissioner a party, in fact a necessary
party for legal declarations of statutory meanings, rights, applications, and proper
enforcement.
Texas Labor Code section 410.255 would require the DWC be made a
party under a “substantial evidence review” standard. The 3rd Court of Appeals
explained the two judicial review avenues under Chapter 410 of the Texas Labor
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Code:5
Section 410.301 HN4 provides that suits "regarding compensability or
eligibility for or the amount of income or death benefits" are governed by
modified de novo review. Tex. Lab. Code Ann. § 410.301. Substantial-
evidence review is reserved as the default for any other type of reviewable
appeals panel decision. See id. § 410.255.
To anticipate the DWC’s response that §410.255 would not require the state
agency to be a party or to mandate venue in Travis County—such is not accurate
because the Texas Government Code provisions require the state agency be made
a party if “substantial evidence review” applies and §410.252 controls judicial
review and requires venue in the county of the worker’s residence under either
subchapter F (410.255) or subchapter G (410.301) of Chapter 410 of the Texas
Labor Code. So even if Labor Code section 410.255 applies to the declaratory
issues then Texas Government Code sections 2001.174, 2001.175 requiring
service on state agency, apply in this case. Under Texas Government Code
section 2001.176(b)(1) a petition must be filed in Travis County “unless provided
otherwise by statute.” Travis County is the default if the specific statute does not
provide otherwise—here it provides local venue.
Texas Labor Code section 410.252(b)(1) statutorily mandates venue in the
worker’s county of residence (Bexar County) at the time of the injury. This is
5
Tex. Prop. & Cas. Guar. Ass'n v. Nat'l Am. Ins. Co., 208 S.W.3d 523, 533 (Tex.
App.--Austin 2006, pet. denied).
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consistent with the administrative hearings in this matter being held in the local
DWC field office within 75 miles of the worker’s residence under Texas Labor
Code section 410.005. Worth noting is section 410.252 precedes section 410.255,
and both of these sections are part of Subchapter F of Chapter 410. Any attempt
to say section 410.252 does not apply to section 410.255 would be contrary to the
express language of the statute.
The 3rd Court of Appeals previously addressed whether the backup
mandatory Travis County venue under the Guaranty Act controlled over the
required mandatory county of an injured worker’s residence under the Texas
Workers’ Compensation Act. See respectively, TEX. INS. CODE § 462.017(b) and TEX.
LAB. CODE § 410.252(b). See TEX. LAB. CODE § 410.252(b)(1) (party bringing suit
must file petition in county where employee resided at time of injury); Campos v.
Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 230 (Tex. App.—Austin 2009,
no pet.). In Campos v. TPCIGA, this Court properly determined that the
mandatory venue under Texas Labor Code §410.252(b)(1) the Texas Workers’
Compensation Act trumped the conflict with the Insurance Code. The 3rd Court
determined:6
In our view, the specific venue provision of the Workers'
6
Campos v. Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 231 (Tex. App.—
Austin 2009, no pet.)
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Compensation Act controls over the general venue provision of the
Guaranty Act.
If the declaratory relief issues are considered these “other issues,” then the
DWC is a proper party under Texas Labor Code Section 410.255.
10. The District Court Has Jurisdiction over all the Claims & Standing is
Shown by the Real Controversy and Final Decision.
Dale Brumfield has exhausted his administrative remedies before the DWC
and the Commissioner with an unfavorable rulings and violations of the law by
the DWC based upon erroneous statutory construction and misapplication and
refusal to comply with the law by the Appellants. When reviewing a plea to the
jurisdiction, the pleadings are construed in favor of the non-movant. See Tex.
Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004); Tex. Ass'n of
Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). “The general test for
standing in Texas requires that there (a) shall be a real controversy between the
parties, which (b) will be actually determined by the judicial declaration sought.”
Tex. Ass'n of Bus., 852 S.W.2d at 446. Is there really a question that if Dale
Brumfield prevails on his declarations that the real controversy will not be
resolved.
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The party asserting the plea to the jurisdiction must show that even if all
the allegations in the plaintiff's pleadings are taken as true, there is an incurable
jurisdictional defect apparent from the face of the pleadings, rendering it
impossible for the non-movant’s claims to confer jurisdiction on the trial court.
Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n, 16
S.W.3d 61, 65 (Tex. App.-Austin 2000, no pet.). A court deciding a plea to the
jurisdiction is not required to look solely to the pleadings, but may consider
evidence relevant to the jurisdictional issue and must do so when necessary to
resolve the jurisdictional issues which have been raised. Bland Indep. Sch. Dist. v.
Blue, 34 S.W.3d 547, 554-55 (Tex. 2000). A court should construe the pleadings in
the non-movant’s favor and look to the non-movant's intent. Texas Ass'n of
Business v. Texas Air Control Bd., 852 S.W.2d 440 at 446 (Tex. 1993). A court does
not address the merits of the case in a plea to the jurisdiction; instead, the
movant must establish why the merits of the non-movant’s claims should not be
reached. Bland Indep. Sch. Dist., 34 S.W.3d at 554.
11. Texas Courts are “Duty-Bound” to Construe Statutes
Texas District Courts are inherently vested with the power to construe
statutes, and Courts are not bound by an agencies interpretation or application,
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especially if in clear error. If a declaratory judgment action terminates the
uncertainty or controversy giving rise to the lawsuit, the District Court is duty-
bound to declare the rights of the parties as to the matters on which the parties
join issue. Spawglass Constr. Corp. v. City of Houston, 974 S.W.2d 876, 878 (Tex.
App.--Houston [14th Dist.] 1998, pet. denied); Calvert v. Employees Ret. Sys. of
Tex., 648 S.W.2d 418, 419 (Tex. App.--Austin 1983, writ ref'd n.r.e.). Without the
DWC and the Commissioner, the enforcement of the statutes proper application
would not be available to a judge.
12. Live Justiciable Controversy Exists
Dale Brumfield has clearly asserted that the DWC and the Commissioner
interpretation and application and erroneous orders based upon the laws in
question violate the statutes of Texas and the statutory responsibility, authority
and limits placed upon the DWC and the Commissioner. A justiciable controversy
regarding whether a state agency or officer has acted beyond statutory authority
provides a jurisdictional basis for a UDJA action seeking construction of that
statutory authority. This type of UDJA action does not implicate sovereign
immunity. Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 712 (1945); see also
Texas Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.
32
04-15-00473-CV DALE BRUMFIELD APPELLEE’S BRIEF
2002) (“Private parties may seek declaratory relief against state officials who
allegedly act without legal or statutory authority.”). A suit for declaratory relief is
not a suit against the State because it does not seek to impose liability or money
damages against the state agency. IT-Davy, 74 S.W.3d at 853. This is a live
controversy involving statutory challenges, applications, and enforcements.
13. Recent Texas Supreme Court Decisions Allow Declaratory Actions to
Properly Enforce Statutes Allowed Against State Agencies & Agency
Officials Acting Beyond the Statute
The Texas Supreme Court in Patel v. Tex. Dep't of Licensing & Regulation,
Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298, 2015 Tex. LEXIS 617, *11-
12 (Tex. June 26, 2015) was following other recent decisions such as the City of El
Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009). The Court explained that that the
governmental entity retains its immunity from suit when the claimant does not
challenge the validity of a statute but rather challenges a government officer's
application of a statute to the claimant. Heinrich, 284 S.W.3d at 372-73 & n.6.
How is the DWC Commissioner immune from suit when the validity of his final
decisions and orders are challenged as in clear violation of the statutory
requirements? This is a fundamental responsibility of the Courts to stop such
violations by state officials and state agencies and to make sure the state agencies
and state officials follow the law in the future.
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The affected party’s remedy is an ultra vires suit against the government
officer in his or his official capacity for prospective relief. Heinrich at 369-74. This
would support DWC Commissioner being a party in this matter to properly apply
the statutes in question and to not violate the statute with erroneous decisions.
14. Declaratory Statutory Challenges Require State Agency to be a Party
Texas Supreme Court cases also support that the state agency is a proper
party in a declaratory action to determine parties’ rights under the statute that
the agency regulates and enforces especially where the state agency’s violates
the statutory terms. Tex. Lottery Comm'n v. First State Bank of DeQueen, 325
S.W.3d 628, 634-35 (Tex. 2010); Tex. Natural Res. Conservation Comm'n v. IT-
Davy, 74 S.W.3d 849, 859-60 (Tex. 2002); Tex. Educ. Agency v. Leeper, 893 S.W.2d
432, 446 (Tex. 1994).
In DeQueen subsequent to Heinrich, the Texas Supreme Court reiterated that
Declaratory Judgment Act suits to construe statutes are expressly allowed
jurisdictionally against a state agency. Texas Lottery Commission v. First State
Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010). The DWC and the Commissioner
are proper parties because without them the statutory legal questions and
statutory application would not be applicable to the DWC and the Commissioner.
The Supreme Court in DeQueen reiterated that jurisdiction over the state agency
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existed and citing to Leeper explained:
[T]he DJA permits statutory challenges and governmental entities may be
bound by those challenges, the DJA contemplates entities must be joined in
those suits. Leeper, 893 S.W.2d at 446.
The Texas Supreme Court further explained in DeQueen that statutory
clarification, as expressly sought in this matter, that the state agency is a proper
party:7
Next, the Commission asserts that the DJA does not waive immunity because
it applies only to suits involving constitutional invalidation and not to those
involving statutory interpretation. But the language in the DJA does not make
that distinction. In Leeper, . . . . the DJA discussion was in the context of a
statutory clarification. . . . . The decision on this claim may ultimately
impact actions taken by officers of the Commission, but that does not
deprive the trial court of jurisdiction. [Leeper] at 445 (noting that the DJA
allows courts to declare relief "whether or not further relief is or could be
claimed"). The trial court properly exercised jurisdiction over this claim.
Subsequent to DeQueen, the Texas Supreme Court in Sefzik explained, Tex. DOT v.
Sefzik, 355 S.W.3d 618, 621-622 (Tex. 2011):
As noted, we dismissed Heinrich's claims seeking declaratory and injunctive
relief against governmental entities, brought under the UDJA, because the
entities were immune. In so doing, we necessarily concluded that the UDJA
does not waive the state's sovereign immunity when the plaintiff seeks a
declaration of his or his rights under a statute or other law. Very likely, the
same claim could be brought against the appropriate state official under the
ultra vires exception, but the state agency remains immune. See id. at 372-
73. As we have consistently stated, the UDJA does not enlarge the trial
court's jurisdiction but is "merely a procedural device for deciding cases
already within a court's jurisdiction." Tex. Parks & Wildlife Dep't v. Sawyer
7
DeQueen, 325 S.W.3d 628 at 635.
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Trust, 354 S.W.3d 384, 2011 Tex. LEXIS 640, *8 (2011) (quoting Tex. Ass'n of
Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993)).
Sefzik would have allowed a claim for statutory rights enforcement and
declaration to be brought as long as the appropriate state official be named—
which the DWC Commissioner is named herein if Heinrich even applies where the
state agency has joined this lawsuit between private parties.
The DWC and the Commissioner have apparently taken no position as to the
statutory interpretation, clarification, and application of the law to protect the
limited benefits an injured worker is statutorily entitled to under the Texas
Workers’ Compensation Act. The DWC only argues no declaratory relief, and such
burying one’s head in the sand does not make the problem disappear. Allowing
this matter to proceed will get the proper statutory clarification and legal rights of
an injured worker properly interpreted and enforceable against the DWC and the
DWC Commissioner and resolve the fundamental legal questions under the
relevant sections of the Texas Labor Code.
The initial challenge to the 1989 Texas Workers’ Compensation Act in Garcia
was primarily a declaratory judgment action. Texas Workers' Compensation
Commission v. Garcia, 893 S.W.2d 504, 517-518 (Tex. 1995). The Texas Supreme
Court reiterated as to the declaratory action against the then TWCC and the
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Executive Director looking at the terms and Constitutionality of the 1989 Act,
Garcia at 513:8
Standing, which is a necessary component of subject matter jurisdiction,
requires a) a real controversy between the parties, which b) will be actually
determined by the judicial declaration sought.
The DWC and the Commissioner’s actions ignore the statutory requirements to be
applied against insurance carriers and employers and in favor of workers and
health care providers.
15. Injured Workers Are Allowed to “Opt Out” of Workers’ Compensation
Coverage Not “Opt In” in Texas including Under Chapter 91 of the Labor
Code.
Dale Brumfield, as to a substantive declaration sought, is entitled to
coverage under the Texas Workers’ Compensation Act and the Texas Labor Code
because he did not “opt out” of coverage. Part of the declaratory relief sought
under Chapter 91 of the Texas Labor Code including in connection with TEX. LAB.
CODE §91.0012 that the statutory terms of a covered employee were met
regardless of any contractual terms which conflict with the statutory
8
Garcia at 513.
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requirements. CR 5, Plaintiff’s Petition Section 19. Mr. Brumfield did all that was
required of him.
The Texas Workers’ Compensation Act only allows the employee to “opt
out” of coverage within 5 days of hire under TEX. LAB. CODE §406.034(b). That is
not alleged in this matter. Further, any violations such as not posting proper
notice of coverage do not result in a lack of coverage.
This Court previously addressed that Texas Workers’ Compensation Act
requires employers to provide notice to employees that they are covered by
workers' compensation insurance, but the failure to provide notice will not bar
workers' compensation coverage or application of the exclusive remedy provision.
Esquivel v. Mapelli Meat Packing Co., 932 S.W.2d 612, 616 (Tex. App.--San
Antonio 1996, pet. denied); see TEX. LAB. CODE §§ 406.005, 415.022.
Brumfield also would point out that the action and final decision and order
of the DWC and the DWC Commissioner basically would allow for a split
workforce depending upon the actions of the professional services organization
employer or the client employer. The general rule is "that an employer may not
split its workforce by providing workers' compensation insurance to some
workers while leaving others without coverage." Tex. Workers' Compensation
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Ins. Fund v. Del Industrial, Inc., 35 S.W.3d 591, 596 (Tex. 2000). The Texas
Supreme Court later explained that:
This is because the TWCA and our decisions are intended to prevent an
employer from splitting its workforce by choosing coverage for some
employees but not coverage for all—absent limited statutory or common-
law exceptions. See, e.g., TEX. LAB. CODE §§ 401.011(18), 401.012(a),
406.002-.003, 406.031(a); [case citations omitted]
Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238, 243 (Tex. 2012).
If an employee does all that is required under the laws of the Texas
Workers’ Compensation Act and Texas Labor Code Chapter 91 concerning
professional employer organization laws, then how can the employee be denied
coverage? Coverage is not excused by the failure of a client company or an
professional service organization to not follow terms of their agreements when
the employee does all the employee is required to do under the law.
Any attempt to limit or as here terminate Dale Brumfield’s rights as an
injured worker would be illegal if Mr. Brumfield’s declaratory relief sought proves
true. This includes not just the statutory challenges but also the contractual
challenges misinterpreted by the Appellants.
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16. Declaratory Judgment Prevents Continued Erroneous Statutory
Interpretation by the DWC and the Commissioner
In the workers’ compensation area, after final administrative decisions as
here, both insurance carriers and injured workers’ have sought declaratory rulings
concerning the validity and applicability of the DWC and the Commissioner
statutes and rules. See Mid-Century, supra; Fulton v. Associated Indemnity
Company, 46 S.W.3d 364 (Tex. App—Austin 2002, pet. denied); Houston General
Insurance Co. v. Association Casualty Insurance Co., 977 S.W.2d 634 (Tex. App.—
Tyler, no pet.). Venue of the main action shall establish venue of a counterclaim,
cross claim, or third-party claim properly joined under the Texas Rules of Civil
Procedure or any applicable statute. TEX. CIV. PRAC. & REM. CODE §5.062(a); Howell
v. Texas Workers' Compensation Com'n, 143 S.W.3d 416, 433 (Tex. App.--Austin
2004, pet. denied). A declaratory judgment simply declares the rights, status, or
other legal relations of the parties; and under Tex. Civ. Prac. & Rem. Code
§37.003(a), (b), a trial court has the “power to declare rights, status, and other
legal relations whether or not further relief is or could be claimed,” and
declaration has the “force and effect of a final judgment or decree”. Howell at
432. Without the DWC and the Commissioner present, Dale Brumfield’s pleadings
and claims for declaratory relief would have little effect if not arguably result in an
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inability to be enforced against the DWC and the Commissioner at all if in fact the
DWC and the Commissioner are not a party to correct violations of his limited
legal rights under the Texas Workers’ Compensation Act.
Response Issue No. 2 (In Response to Appellants’ Issue No. 5): A plaintiff
seeking declaratory relief should certainly be allowed to replead if a curable
defect exists in the pleading.
The Appellants argue repleading should not be allowed if this Court at this
time determines sovereign immunity. See San Antonio v. Vasquez, 340 S.W.3d
844,847 (Tex. App.—San Antonio 2011, no pet.). The Appellants at page 19 of
their brief assert:
Sovereign immunity affirmatively negates jurisdiction in this case, and this
is not a curable defect. See eg. Hernandez v Tex. Dep’t Ins., Workers’ Comp.
Div., No. 04-14-00123-CV,2014 WL 3747306, at 2 (Tex. App.—San Antonio
July 30, 2014, no pet.).
This Court should simply look at the typewritten petition in Hernandez versus the
clear pleading in this matter. This Court should follow its Brewster v. Roicki
decision and the Texas Supreme Court’s decisions including the recent Patel
decision, and if necessary allow repleading as under Heinrich, which Appellee
believes the pleadings are sufficient.
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CONCLUSION
This Court should allow Dale Brumfield to proceed with the declaratory
judgment claim and keep as parties both the DWC and the Commissioner, in his
official capacity, for the ultra vires claims. The jurisdiction exists due to the live
controversy, exhaustion of administrative remedies, and the state agency and
state official are necessary parties for proper enforceability of the statutes and to
ensure proper compliance with clear statutory terms alleged to be violated by the
Appellants. Otherwise, only the few injured workers who continue to fight into
the courthouse will have a chance for justice on a piece by piece basis and be
subjected to continual violations of the law by the DWC and the DWC
Commissioner. The purpose of the Declaratory Judgment Act is to make the laws
clear to all affected, enforceable as challenged, and to make sure the laws are
properly applied and not violated by the state agency and the head of the state
agency. The District Court Judge correctly and well within his discretion
exercised subject matter jurisdiction over this matter in its entirety including the
declaratory relief sought by Mr. Brumfield.
Prayer
Dale Brumfield respectfully requests and prays that this Court reject the
interlocutory appeal of the state Appellants and affirm and uphold the District
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Judge’s order. Appellee asks this Court to allow this matter to proceed to final
judgment in the District Court and for all other relief to which she is entitled.
Respectfully submitted,
/s/ Brad McClellan
Bradley Dean McClellan
State Bar No. 13395980
Of Counsel, Law Offices of Richard Pena, P.C.
2211 South IH 35, Suite 300
Austin, Texas 78741
Brad.McClellan@yahoo.com
Telephone: (512) 327-6884
Fax: (512) 327-8354
Attorney for Appellee, Dale Brumfield
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CERTIFICATE OF COMPLIANCE
In compliance with TEX. R. APP. P 9.4(i)(3), I certify that the foregoing
document measured for word count using the computer program used to prepare
the document and that the word count was 9,355 words.
/s/ Brad McClellan
Bradley Dean McClellan
CERTIFICATE OF SERVICE
I certify that a copy of the foregoing, Dale Brumfield’s Appellee’s Brief was
on the lead counsel of record by the method indicated below on November 19,
2015:
Harold J. Liller, Assistant Attorney General David Cluck
harold.liller@texasattorneygeneral.gov Flahive, Ogden & Latson
Administrative Law Division P.O. Box 201329
Office of the Attorney General of Texas Austin, Texas 78720-1329
P.O. Box 12548 (MC-018), Capital Station doc@fol.com
Austin, Texas 78711-2548 (512) 477-4405 office
512-475-4208 (512) 241-3300 fax
Facsimile: (512) 320-0167 Attorney for Defendant Zurich
Counsel for State Appellants Via Efiling/service
Via efiling/eservice
/s/ Brad McClellan
Brad McClellan
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