Opinion
CIVIL ACTION NO. 3:01-CV-1546-G
December 4, 2001
MEMORANDUM ORDER
Before the court is the motion of the defendant Atlantic Mutual Insurance Company ("Atlantic Mutual") to abate consideration of plaintiff Mary A. Fellers' ("Fellers") suit against Atlantic Mutual until the Texas Workers' Compensation Commission ("TWCC") determines whether Fellers is entitled to medical benefits. For the following reasons, the court grants Atlantic Mutual's motion to abate and, on its own motion, administratively closes this case.
I. BACKGROUND
On August 29, 2000, Fellers injured her back while working for her employer, Metro Label Corporation ("Metro Label"). Plaintiff's Original Complaint ("Complaint") ¶ 5. Atlantic Mutual provides workers' compensation insurance coverage to Metro Label. Defendant's Motion to Abate ("Motion to Abate") ¶ 3; Plaintiff's Response to Defendant's Plea in Abatement ("Response") ¶ 7. Fellers reported her injury to Metro Label on September 12. Motion to Abate ¶ 4. A week later, Dr. Gwynn Carver evaluated Fellers and concluded that she had reached maximum medical improvement and had a zero percent disability rating. Motion to Abate ¶ 4; Response ¶ 9. On this basis, Atlantic Mutual declined to pay temporary income benefits to Fellers. Motion to Abate ¶ 4; Response ¶ 11. Atlantic Mutual gave notice to Fellers and the TWCC on December 22, 2000 that it controverted Fellers' medical compensation claim. Motion to Abate ¶ 4; Response ¶¶ 12, 17. According to Atlantic Mutual, a second medical examination of Fellers, conducted on February 21, 2001, reached the same diagnosis as Dr. Carver's, viz., that Fellers had reached maximum medical improvement and had a zero percent disability rating. Motion to Abate ¶ 5. On March 2, 2001, the TWCC notified Fellers regarding her disability rating. Id. Fellers did not contest the disability rating, which became final on June 2, 2001. Id. Fellers also has not sought a benefit review conference before the TWCC to determine whether Atlantic Mutual improperly denied her claim for medical expenses. Id. ¶ 6.
Fellers filed this case in the Eastern District of Texas on April 25, 2001, alleging that Atlantic Mutual "handled her workers' compensation claim in bad faith and in violation of the Texas Insurance Code and the Deceptive Trade Practices-Consumer Protection Act (DTPA)." Response ¶ 1; see also Complaint 11 52. Pursuant to 28 U.S.C. § 1404(a), her case was transferred to this court from the Eastern District of Texas on July 26, 2001. Transfer Order at 1, filed on July 26, 2001. On August 22, 2001, Atlantic Mutual filed a motion to abate consideration of this case, under the doctrine of primary jurisdiction, "until such time as a final decision regarding [Fellers'] medical claim is obtained from the TWCC." Motion to Abate ¶ 1. In its motion, Atlantic Mutual argues that Fellers has not exhausted her required administrative remedies because she has not sought a benefit review conference challenging Atlantic Mutual's denial of her medical benefits. Id. In response, Fellers argues that Atlantic Mutual waived its right to contest the compensability of her claim and that she "should be allowed to continue this proceeding in tandem with the separate administrative proceeding before the . . . TWCC." Response ¶¶ 2, 4.
In her complaint, Fellers contends that she is not seeking to recover any damages under her policy or the Workers' Compensation Act. Complaint ¶ 9 ("This lawsuit does not seek worker's compensation benefits."). Rather, Fellers maintains, she is pursuing those damages in a separate administrative proceeding. Complaint 11 15 ("The Plaintiff's complain remains pending before the TWCC and is not the subject matter of this lawsuit."). Atlantic Mutual disputes this contention and argues that Fellers is, in essence, seeking workers' compensation damages and that she is statutorily required to pursue administrative remedies for those damages. Motion to Abate ¶ 7.
II. ANALYSIS
Fellers' suit against Atlantic Mutual is based on Atlantic Mutual's refusal to pay Fellers indemnity and medical benefits, which she contends is required by the Texas Workers' Compensation Act, TEX. LABOR CODE §§ 401.001 et seq. (Vernon 1996 and Supp. 2001). Complaint ¶¶ 10, 12. Given Fellers' characterization of her claim, the court finds that the instant suit ultimately arises out of Atlantic Mutual's decision to deny Fellers medical benefits. Accordingly, the court will apply the doctrine of primary jurisdiction and temporarily close this case pending resolution by the TWCC of the propriety of this decision. See Bray v. Utica Mutual Insurance Co., No. 3:98-CV-0544-G, 1998 WL 574768 (N.D. Tex. Aug. 26, 1998) (Fish, J.).Under the doctrine of primary jurisdiction, a court may refrain from exercising its jurisdiction until after an administrative agency has determined a particular question arising in the proceeding before the court. See Penny v. Southwestern Bell Telephone Company, 906 F.2d 183, 187 (5th Cir. 1990). Deference to an administrative proceeding under the doctrine of primary jurisdiction is particularly appropriate in situations where the resolution of the case would be aided by an initial determination of the question by the administrative agency. See id. Thus, where an administrative agency has specialized knowledge of the question in the case or is more accustomed to adjudicating the particular type of question, a court may hold the case in abeyance until the administrative agency has had an opportunity to decide the question. See id.
There is a three-prong test for determining whether the primary jurisdiction doctrine will apply in a particular case. The doctrine applies when:
(1) the court has original jurisdiction over the claim before it;
(2) the adjudication of that claim requires the resolution of predicate issues or the making of preliminary findings; and
(3) the legislature has established a regulatory scheme whereby it has committed the resolution of those issues or the making of those findings to an administrative body.
See Northwinds Abatement, Inc. v. Employers Insurance of Wausau, 69 F.3d 1304, 1311 (5th Cir. 1995); Golden v. Employers Insurance of Wausau, 981 F. Supp. 467, 474 (S.D. Tex. 1997).
In this case, Fellers is pursuing causes of action arising under bodies of law other than the Workers' Compensation Act. Complaint ¶ 15. Specifically, she claims that Atlantic Mutual handled her workers' compensation claim in bad faith and in violation of the Texas Insurance Code, TEX. INS. CODE ANN., Art. 21.21 et seq. (Vernon 1981 and Supp. 2001), and the Deceptive Trade Practices-Consumer Protection Act, TEX. Bus. COM. CODE ANN. § 17.50(a)(4) (Vernon Supp. 2001). Response ¶ 1. In addition, the damages Fellers seeks are allegedly related to Atlantic Mutual's commission of the above common law and statutory torts as opposed to lost compensation or benefits due to her under the Workers' Compensation Act. Complaint ¶¶ 9, 41. The Fifth Circuit and other courts have held that claims of this nature are cognizable in federal district court. See Northwinds, 69 F.3d at 1310-11 (rejecting defendant's contention that the federal court lacked original jurisdiction, in a diversity case, to hear plaintiff's claims based on common law tort and statutory-remedies for damages); Golden, 981 F. Supp. at 473 (noting that, although the TWCC has the power to determine the merits of a coverage dispute, the district court has original jurisdiction over extra-contractual claims arising out of coverage disputes). Therefore, this court has original jurisdiction over the claims before it, and the first prong of the test is satisfied.
With respect to the second prong, Fellers' damages claims depends upon a finding by the TWCC that Atlantic Mutual improperly denied her workers' compensation benefits. See American Motorists Insurance Co. v. Fodge, ___ S.W.3d ___, No. 00-0547, 2001 WL 1424439 at *2 (Tex. November 15, 2001) ("[J]ust as a court cannot award compensation benefits, except on appeal from a Commission ruling, neither can it award damages for a denial in payment of compensation benefits without a determination by the Commission that such benefits were due."). If Fellers' claims for coverage were properly denied, then she cannot pursue extra-contractual and statutory claims that Atlantic Mutual breached its duty of good faith and acted in violation of the Texas Insurance Code. See Golden, 981 F. Supp. at 474 ("If her claims for coverage were properly denied, Plaintiff could not pursue her negligence, gross negligence, breach of fiduciary duty . . ., fraud, unfair settlement practices, DTPA, and her claims based on the Texas Insurance Code."). Thus, a determination by the TWCC of the propriety of Atlantic Mutual's decision to deny Fellers workers' compensation claim is necessary to resolve this case.
As to the third prong, the Texas Legislature has committed the resolution of disputes related to workers' compensation to the TWCC. See TEX. LAB. CODE ANN. § 410.001 et seq. (Vernon 1996). Moreover, the TWCC routinely adjudicates cases involving the question of coverage, and thus, has developed specialized knowledge related to the central question in this case. As the TWCC is uniquely qualified to make the initial determination of the propriety of Atlantic Mutual's denial of benefits, the doctrine of primary jurisdiction applies.
III. CONCLUSION
Atlantic Mutual's motion to abate is GRANTED. This case is TEMPORARILY STAYED and ADMINISTRATIVELY CLOSED, pending the resolution of any related administrative proceedings currently before the Texas Workers' Compensation Commission. If further proceedings in this case are necessary, either party may reopen the case by filing an appropriate motion within thirty days after the administrative proceedings are concluded.