Opinion
No. 02-08-280-CV
Delivered: July 15, 2010.
Appealed from the 48th District Court of Tarrant County.
PANEL: DAUPHINOT and MEIER, JJ.
OPINION ON REHEARING
Appellant Paul Robertson filed a motion for rehearing of our opinion issued October 8, 2009. We deny Robertson's motion for rehearing, withdraw our opinion and judgment dated October 8, 2009, and substitute the following.
I. INTRODUCTION
This is an insurance coverage case. Appellant Paul Robertson obtained a judgment against his employer, Ray Redi-Mix, Inc., for damages for personal injuries that he sustained while on the job. Appellee Home State County Mutual Insurance Company, Redi-Mix's transportation insurer, denied coverage under several exclusions contained in Redi-Mix's policy of insurance for Robertson's claims against Redi-Mix and obtained a summary judgment against Robertson based on those exclusions. In two issues, Robertson argues that the trial court erred by granting Home State's motion for summary judgment. We will affirm.
II. FACTUAL AND PROCEDURAL BACKGROUND
According to Robertson's first amended original petition, Redi-Mix employed him as a truck driver. On November 3, 2005, Robertson informed Redi-Mix that the truck that he had been assigned to drive had a defective tarp, but Redi-Mix instructed him to make do with the tarp he had. The next day, the tarp malfunctioned, causing Robertson to sustain bodily injuries.
Redi-Mix did not provide workers' compensation insurance coverage to its employees. It did, however, have a truckers' liability insurance policy issued by Home State (the "Policy") that provided coverage for "all sums an insured legally must pay as damages because of bodily injury or property damage to which [the] insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto." The Policy contained the following relevant exclusions to which coverage did not apply:
3. WORKERS COMPENSATION
Any obligation for which the insured or the insured's insurer may be held liable under any workers compensation, disability benefits or unemployment compensation law or any similar law.4. EMPLOYEE INDEMNIFICATION AND EMPLOYER'S LIABILITY
Bodily injury to:
a. An employee of the insured arising out of and in the course of employment by the insured; or
b. The spouse, child, parent, brother or sister of that employee as a consequence of paragraph a. above.
This exclusion applies
(1) Whether the insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.
But this exclusion does not apply to bodily injury to domestic employees not entitled to workers compensation benefits or to liability assumed by the insured under an insured contract.
Robertson sued Redi-Mix for the injuries that he allegedly sustained on November 4, 2005, and he sought a declaratory judgment that Home State had a duty to defend, to indemnify, or to both defend and indemnify Redi-Mix for his claims against Redi-Mix. Home State filed a counterclaim seeking a declaratory judgment that it had neither a duty to defend nor a duty to indemnify Redi-Mix for the claims made by Robertson against Redi-Mix because the workers' compensation and employee exclusions contained in the Policy applied to exclude coverage under the Policy. Robertson obtained a final judgment against Redi-Mix for, among other things, damages in the amount of $967,631.52, and the trial court severed Robertson's suit against Redi-Mix from his remaining claim against Home State. Home State moved for summary judgment on the grounds (1) that coverage under the Policy for Robertson's claims against Redi-Mix is excluded under the workers' compensation exclusion, (2) that coverage under the Policy for Robertson's claims against Redi-Mix is excluded under the employee exclusion and did not fall within the "domestic employee" exception, and (3) that the truck to which Robertson was assigned when he sustained injuries is not a listed vehicle under the Policy. The trial court granted Home State's motion for summary judgment on the grounds that Robertson's claims against Redi-Mix are excluded under both the workers' compensation and employee exclusions. Robertson appeals.
III. SUMMARY JUDGMENT STANDARD OF REVIEW
In a summary judgment case, the issue on appeal is whether the movant met the summary judgment burden by establishing that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). The burden of proof is on the movant, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. Sw. Elec. Power Co., 73 S.W.3d at 215. Once the movant produces sufficient evidence to establish the right to summary judgment, the burden shifts to the nonmovant to come forward with competent controverting evidence raising a genuine issue of material fact with regard to the element challenged by the defendant. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Evidence that favors the movant's position will not be considered unless it is uncontroverted. Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965). But we must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. See Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 822-24 (Tex. 2005). The summary judgment will be affirmed only if the record establishes that the movant has conclusively proved all essential elements of the movant's cause of action or defense as a matter of law. Clear Creek Basin Auth., 589 S.W.2d at 678.
IV. WORKERS' COMPENSATION EXCLUSION
In his first issue, Robertson argues that the trial court erred by granting Home State's motion for summary judgment on the ground that coverage under the Policy for Robertson's claims against Redi-Mix is excluded under the workers' compensation exclusion. He contends that his negligence claim against Redi-Mix is not excluded under the Policy's workers' compensation exclusion because Redi-Mix did not subscribe to workers' compensation benefits. He argues on rehearing that because Redi-Mix was a nonsubscriber, his negligence action against Redi-Mix sounded in common law and, consequently, is not an "obligation" under the Texas Workers' Compensation Act ("TWCA"). Thus, according to Robertson, the judgment he obtained against Redi-Mix did not implicate the Policy's exclusion of coverage for an "obligation for which the insured or the insured's insurer may be held liable under any workers compensation."
We clarify on rehearing that the specific issue before this court is not whether Robertson's negligence action arose under the TWCA. Indeed, there is no doubt that an employee's negligence action against his employer existed at common law before the enactment of the TWCA. See, e.g., Tex. Workers' Comp. Comm'n v. Garcia, 893 S.W.2d 504, 510 (Tex. 1995) (explaining that when Texas first enacted workers' compensation legislation in 1913, most injured workers were denied recovery "under the common law" because of the difficulty in proving negligence and the ability of the employer to invoke complete defenses); Tex. N.O.R. Co. v. Bingle, 91 Tex. 287, 288, 42 S.W. 971, 971 (1897) (explaining that an employee may recover against employer for negligence); Nunez v. Wyatt Cafeterias, Inc., 771 F. Supp. 165, 167-68 (N.D. Tex. 1991) (reasoning that negligence action against nonsubscriber has its origins in common law principles dating back to the 1870s). Rather, the specific issue that we address here is determined and limited by the express language of the workers' compensation exclusion contained in Redi-Mix's Policy, specifically: whether the damages that Robertson recovered against Redi-Mix for Redi-Mix's negligence constitute an "obligation" for which Redi-Mix is liable "under any" workers' compensation law.
Generally, courts construe insurance policies according to the same rules of construction that apply to contracts. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Crocker, 246 S.W.3d 603, 606 (Tex. 2008). Enforcing the parties' expressed intent is our primary concern. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). If terms in the contract can be given a definite or certain legal meaning, they are not ambiguous, and the court will construe the contract as a matter of law. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). However, if a contract of insurance is susceptible to more than one reasonable interpretation and is, thus, ambiguous, we must resolve the uncertainty by adopting the construction that most favors the insured. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., Inc., 811 S.W.2d 552, 555 (Tex. 1991).
Within the context of his first issue, Robertson includes the following sentence regarding ambiguity: "The worker's compensation exclusion is at least ambiguous with regard to excluding a non-subscriber claim." Robertson included argument in his response to Home State's motions for summary judgment addressing the grounds (1) that coverage under the Policy for Robertson's claims against Redi-Mix is excluded under the employee exclusion and did not fall within the "domestic employee" exception and (2) that the truck assigned to Robertson when he sustained injuries is not a listed vehicle under the Policy. We are unable to locate in Robertson's response any argument addressing the ground that coverage under the Policy for Robertson's claims against Redi-Mix is excluded under the workers' compensation exclusion. We construe the absence of any argument responding to Home State's ground that coverage is excluded under the workers' compensation exclusion as a failure to respond to the motion for summary judgment on that ground. Therefore, Robertson is limited in his first issue to contending that Home State's summary judgment evidence is insufficient as a matter of law to support the summary judgment. See Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Clear Creek Basin Auth., 589 S.W.2d at 678; see also McConnell v. Southside ISD, 858 S.W.2d 337, 343 (Tex. 1993). Because Robertson is limited to challenging the sufficiency of the evidence to support Home State's entitlement to summary judgment, he is necessarily procedurally barred from raising other arguments — arguments that he could have raised in his response to Home State's motion for summary judgment but did not — in challenging Home State's entitlement to summary judgment on this ground, including his argument that the workers' compensation exclusion is ambiguous and susceptible to more than one reasonable interpretation. See Yancey v. Floyd West Co., 755 S.W.2d 914, 917 (Tex. App.-Fort Worth 1988, writ denied) (holding that appellant waived issue on appeal that exclusion was ambiguous because "[n]owhere in the written motions or other responses in the trial court does appellant refer us to his theory of ambiguity within the policies"); cf. Praeger v. Wilson, 721 S.W.2d 597, 600 (Tex. App.-Fort Worth 1986, writ ref'd n.r.e.) (construing contract as a matter of law because appellant raised ambiguity for the first time on appeal).
Our primary objective when construing a statute is to ascertain and give effect to the legislature's intent. McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003). We must construe the statute as written and, if possible, determine legislative intent "first and foremost" from the statute's language. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006). We consider the statute as a whole rather than its isolated provisions. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex. 2001). Courts should give effect to every sentence, word, and clause of a statute if reasonable and possible. Tex. Workers' Comp. Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591, 593 (Tex. 2000).
The TWCA was adopted to provide prompt remuneration to employees who sustain injuries in the course and scope of their employment. Hughes Wood Prods., Inc. v. Wagner, 18 S.W.3d 202, 206 (Tex. 2000). An employer has the option of providing workers' compensation insurance for employees and thereby becoming a subscriber under the TWCA or not providing workers' compensation insurance and thereby remaining a nonsubscriber. Lawrence v. CDB Servs., Inc., 16 S.W.3d 35, 41 (Tex. App.-Amarillo 2000), aff'd, 44 S.W.3d 544 (Tex. 2001); see Tex. Lab. Code Ann. § 406.002(a) (Vernon 2006) (providing that except for public employers and as otherwise provided by law, an employer may elect to obtain workers' compensation insurance coverage). The decision to subscribe or not to subscribe, however, has certain consequences for both an employer and an employee that are specifically delineated by the TWCA.
As one court described it, A[E]mployers making the decision on whether to subscribe must face a Texas statutory scheme that wields both a stick and a carrot." Figueroa v. Healthmark Partners, L.L.C., 125 F. Supp. 2d 209, 210 (S.D. Tex. 2000).
If the employer participates in the workers' compensation system, the employer and the employer's employees are protected from an employee's common law claims for injuries or death occurring during the course and scope of the employee's work responsibilities. Hunt Constr. Group, Inc. v. Konecny, 290 S.W.3d 238, 243 (Tex. App.-Houston [1st Dist.] 2008, pet. denied). Labor code section 406.031 provides that an insurance carrier is liable for compensation for an employee's injury without regard to fault or negligence if, at the time of injury, the employee is subject to this subtitle and the injury arises out of and in the course and scope of employment. Tex. Lab. Code Ann. § 406.031(a); see also Figueroa, 125 F. Supp. 2d at 210 ("Employers who elect to purchase workers' compensation coverage gain the benefit of no-fault, but limited financial liability."). Under section 408.001(a), recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage against an employer for the death of or a work-related injury sustained by the employee. Tex. Lab. Code Ann. § 408.001(a) (Vernon 2006).
Further, under the TWCA, the employee of a subscriber is deemed to have waived his right of action at common law to recover damages for personal injuries sustained in the course and scope of employment unless the employee notifies the employer in writing that the employee waives coverage and retains all rights of action under common law. Id. § 406.034(a), (b). In this situation, "An employee who elects to retain the right of action . . . may bring a cause of action for damages for injuries sustained in the course and scope of the employment under common law or under a statute of this state." Id. § 406.034(d). Such a cause of action is subject to "all defenses under common law and the statutes of this state." Id.
If, on the other hand, an employer does not participate in the workers' compensation system, the TWCA states, "In an action . . . against an employer who does not have workers' compensation insurance coverage, the plaintiff must prove negligence of the employer or of an agent or servant of the employer acting within the general scope of the agent's or servant's employment." Id. § 406.033(d) (emphasis added). In such an action, the employer may not assert common law defenses against the employee, but it may "defend the action on the ground that the injury was caused" by an act of the employee intended to bring about the injury or while the employee was in a state of intoxication. Id. § 406.033(a), (c); Konecny, 290 S.W.3d at 243. The TWCA's comprehensive statutory scheme therefore provides for three categories of claims: (1) administrative claims by employees of subscribers; (2) negligence actions of employees of subscribers wherein common law defenses are available; and (3) negligence actions by employees of nonsubscribers in which common law defenses are not available. See Tex. Lab. Code Ann. § 406.031, .033, .034; Britt v. Suckle, 453 F. Supp. 987, 994 (E.D. Tex. 1978).
Specifically, labor code section 406.033(a) provides,
(a) In an action against an employer who does not have workers' compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment, it is not a defense that:
(1) the employee was guilty of contributory negligence;
(2) the employee assumed the risk of injury or death; or
(3) the injury or death was caused by the negligence of a fellow employee.
Tex. Lab. Code Ann. § 406.033(a).
In Kroger Co. v. Keng, the supreme court addressed the issue of whether a nonsubscriber to workers' compensation insurance was entitled to a jury question regarding its employee's alleged comparative responsibility for his or her injuries. 23 S.W.3d 347, 350 (Tex. 2000) (" Kroger II"). Although the court did not have to determine "whether a suit under section 406.033 is an action to collect workers' compensation benefits under the workers' compensation laws of this state,'" it did discuss section 406.033, which, according to the court, "governs an employee's personal-injury action against his or her employer, when the employer is a nonsubscriber under the [TWCA]." Id. at 349, 352. The court reasoned in part as follows:
In enacting section 406.033 and its predecessors, the Legislature intended to delineate explicitly the structure of an employee's personal-injury action against his or her nonsubscribing employer. Section 406.033(a) prescribes the defenses that are unavailable to a nonsubscriber; section 406.033(c) dictates the defenses that implicate the employee's conduct and on which an employer may rely; and section 406.033(d) provides the employee's burden of proof, stating that "the plaintiff must prove negligence of the employer or of an agent or servant of the employer acting within the general scope of the agent's or servant's employment." The Legislature has not changed this structure since 1917, when it deleted proportionate reduction, the equivalent of comparative responsibility, from the penalty statute.
Id. at 350-51 (emphasis added) (citation omitted). The supreme court's reference that section 406.033 "governs" an employee's personal injury action against a nonsubscriber and acknowledgment that the legislature intended in section 406.033 "to delineate explicitly the structure of an employee's personal-injury action against his or her nonsubscribing employer" support the conclusion that the $967,631.52 judgment that Robertson obtained against Redi-Mix is an obligation for which Redi-Mix is liable under section 406.033.
Several federal district courts in Texas have addressed the issue of whether 28 U.S.C. § 1445(c) barred removal to federal court of an action against a nonsubscriber. See Figueroa, 125 F. Supp. 2d at 210-12; Dean v. Tex. Steel Co., 837 F. Supp. 212, 213-14 (N.D. Tex. 1993); see also Smith v. Tubal-Cain Indus., Inc., 196 F. Supp. 2d 421, 423 (E.D. Tex. 2001); but see Pyle v. Beverly Enters.-Texas, Inc., 826 F. Supp. 206, 209 (N.D. Tex 1993); Eurine v. Wyatt Cafeterias, Inc., Civ. A. No. 3-91-0408-H, 1991 WL 207468, at *1-2 (N.D. Tex. 1991). That statute provides that "[a] civil action in any State court arising under the workmen's compensation laws of such State may not be removed to any district court of the United States." 28 U.S.C.A. § 1445(c) (West 2006) (emphasis added). The courts in Figueroa, Dean, and Smith reasoned that a negligence action brought by an employee against an employer is commenced pursuant to Texas workers' compensation law, even if the employer is a nonsubscriber. Figueroa, 125 F. Supp. 2d at 211; Dean, 837 F. Supp. at 214; see also Smith, 196 F. Supp. 2d at 423. Although district courts broadly construe § 1445(c) for purposes of removal, see Figueroa 125 F. Supp. 2d at 211, and our specific inquiry is not whether Robertson's negligence action "arose under" the TWCA, we consider these cases persuasive authority because they rely in part upon relevant provisions of the TWCA to determine whether the TWCA implicates a negligence action against a nonsubscriber. See Figueroa, 125 F. Supp. 2d at 210; Dean, 837 F. Supp. at 213-14; see also Smith, 196 F. Supp. 2d at 423.
In Illinois National Insurance Co. v. Hagendorf Construction Co., Inc., the district court granted the insurer's motion for summary judgment on the basis of a workers' compensation exclusion worded similarly to the exclusion in this case. 337 F. Supp. 2d 902, 904-05 (W.D. Tex. 2004). The court seemed to rely heavily on case law addressing § 1445(c), but it nonetheless reasoned that "when an employee . . . brings a negligence suit against his nonsubscribing employer, such a suit arises under the Texas Worker's Compensation Act." Id. at 905.
Robertson contends that the Dallas Court of Appeals has addressed this issue and concluded contrary to the decision that we ultimately reach here. See Russell v. Wendy's Int'l, Inc., 219 S.W.3d 629, 641 (Tex. App.-Dallas 2007, pet. dism'd). Russell is a joinder case addressing civil practice and remedies code section 33.004(e). Id. at 636, 641. The court did not address whether the damages that an employee recovered against his nonsubscribing employer for negligence constituted an "obligation" for which the employer was liable "under any" workers' compensation law. The court expressly declined to address the issue of whether an employee's suit against his nonsubscribing employer is an action to collect benefits under the workers' compensation laws. Id. at 641. Russell is therefore inapposite.
Similarly, in In re Autotainment Partners Ltd. Partnership, the court addressed the applicability of an arbitration clause and disagreed with the real party in interest's argument that his claim, which sought damages for a fall he suffered, fell outside the scope of the arbitration agreement because his claim was for workers' compensation benefits. 183 S.W.3d 532, 536-37 (Tex. App.-Houston [14th Dist.] 2006, orig. proceeding). The court applied the presumption favoring arbitration and did not address whether the damages that an employee recovered against his nonsubscribing employer for negligence constituted an "obligation" for which the employer was liable "under any" workers' compensation law. Id. at 537. Autotainment is therefore also inapposite.
The authority that provides the strongest support for Robertson's position that the workers' compensation exclusion does not apply to bar coverage is American International Specialty Lines Insurance Co. v. Rentech Steel, L.L.C., No. 1:07-CV-108-C (N.D. Tex. June 18, 2008). In that case, the district court denied AISLIC's motion for summary judgment on the ground that an exclusion contained in a commercial umbrella policy, which was similar to the workers' compensation exclusion in this case, applied to deny coverage under the policy. Id. at 21. The court disagreed that the case law addressing § 1445(c) should apply to the substantive interpretation of contracts and policy coverage, distinguished Hagendorf Construction, and determined that the exclusion was ambiguous because it could be interpreted to exclude claims in which there is
We were unable to locate this AOrder" on Westlaw or some other web-based legal research site. Robertson relies on the case in his motion for rehearing; therefore, we address it.
an obligation to pay workers' compensation benefits. Id. at 15, 16, 20-21. Unlike the district court, we interpret the persuasive authority of the case law addressing § 1445(c) differently, do not address whether the workers' compensation exclusion is ambiguous, and consider the supreme court's reasoning in Keng regarding section 406.033.
Robertson additionally relies on a number of out-of-state cases in support of his argument. See Me. Bonding Cas. Co. v. Philbrick, 538 A.2d 276, 277 (Me. 1988); Scottsdale Ins. Co. v. Monares, 734 P.2d 106, 109-10 (Ariz. Ct. App. 1986). These cases are inapposite because they do not address the TWCA.
In light of all of the above, we conclude and hold that the workers' compensation exclusion applied to exclude coverage under the Policy for Robertson's claims against Redi-Mix. Specifically, Redi-Mix was a nonsubscriber, and Robertson was Redi-Mix's employee. Section 406.033 was implicated when Robertson sued Redi-Mix for negligence because section 406.033 governs his negligence action against Redi-Mix. The plain and unambiguous language of the statute imposed upon Robertson the burden to prove Redi-Mix's negligence, prohibited Redi-Mix from utilizing three common law defenses in defending itself against Robertson's action, and dictated the defenses on which Redi-Mix could rely. See Tex. Lab. Code Ann. § 406.033(a), (c), (d). Robertson met his burden to prove Redi-Mix's negligence under section 406.033(d) and obtained a final judgment against Redi-Mix for damages in the amount of $967,631.52. The $967,631.52 judgment is an "obligation" for which Redi-Mix is liable. Consequently, the $967,631.52 judgment that Robertson obtained against Redi-Mix is an obligation for which Redi-Mix is liable under section 406.033.
Accordingly, we hold that the trial court did not err by granting Home State's motion for summary judgment on the basis of the workers' compensation exclusion contained in the Policy. We overrule Robertson's first issue. Having determined that summary judgment was proper on this ground, we need not reach Robertson's second issue complaining that the trial court erred by granting Home State's motion for summary judgment on the basis of the employee exclusion contained in the Policy. See Tex. R. App. P. 47.1.
V. CONCLUSION
Having overruled Robertson's first, dispositive issue, we affirm the trial court's judgment.