Opinion
No. 04-15-00473-CV
05-18-2016
TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS' COMPENSATION and Commissioner Ryan Brannan, in his official capacity, Appellants v. Dale BRUMFIELD, Appellee
MEMORANDUM OPINION
From the 288th Judicial District Court, Bexar County, Texas
Trial Court No. 2015-CI-07374
Honorable Larry Noll, Judge Presiding Opinion by: Karen Angelini, Justice Sitting: Karen Angelini, Justice Patricia O. Alvarez, Justice Jason Pulliam, Justice REVERSED AND RENDERED
This is an appeal from the trial court's order denying a plea to the jurisdiction filed by a governmental agency. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014 (a)(8) (West Supp. 2015). Because we conclude the claims Dale Brumfield brought against the Texas Department of Insurance, Division of Workers' Compensation ("the Division"), and Commissioner Ryan Brannan are barred by sovereign immunity, the redundant remedies doctrine, and the ripeness doctrine, we reverse the trial court's order and render judgment dismissing these claims.
BACKGROUND
After sustaining an injury in a motor vehicle accident, Brumfield filed a claim for workers' compensation benefits. A contested case hearing was held. At this hearing, the evidence showed that Brumfield applied for a truck driver position with Double M Services and completed the application and other documentation. Double M Services had a coemployment agreement with E Employers Solutions, Inc. (eESI), which provided that
any worker . . . shall not be deemed an employee covered by eESI's Workers' Compensation insurance until after [Double M Services] submits to eESI an employment packet completed by that worker and eESI has reviewed the packet and affirmed, by issuing an employee identification number, that the worker is an employee of eESI . . . .Brumfield started working on the same day he completed his application and other documentation. Three days later, and before eESI received Brumfield's employment application and other documentation and affirmed that Brumfield was an employee, Brumfield suffered the injury that resulted in the filing of his workers' compensation claim.
After the hearing, the Division's hearing officer issued a decision that Brumfield was not entitled to workers' compensation benefits from the carrier because Brumfield was not a covered employee at the time of his injury and his injury was not compensable. The decision was based on the client services agreement and section 91.0012 of the Texas Labor Code, which defines a "covered" employee. Brumfield appealed the hearing officer's decision to an administrative appeals panel which upheld the denial of benefits.
Chapter 91 of the Texas Labor Code is known as the Staff Leasing Services Act (SLSA). The SLSA provides that a license holder and its client company are coemployers for workers' compensation purposes. TEX. LABOR CODE ANN. § 91.042 (West 2015). Section 91.0012 provides:
(a) A covered employee must meet all the following criteria:
(1) the individual must receive written notice of the coemployment relationship with the professional employer organization; and
(2) the individual's coemployment relationship must be under a professional employer services agreement subject to this chapter.
(b) An individual who is an executive employee, as described by Section 406.097, of the client is a covered employee, except to the extent the professional employer organization and the client expressly agree in the professional employer services agreement that the individual is not a covered employee.
Brumfield then filed a petition in the trial court seeking judicial review of the Division's decision and relief under the Uniform Declaratory Judgments Act (UDJA). See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001-.011 (West 2015). In his petition, Brumfield named three defendants: Zurich American Insurance Company, who was the workers' compensation insurance carrier; the Texas Department of Insurance, Division of Workers' Compensation; and Commissioner Ryan Brannan, in his official capacity.
The Division and the Commissioner filed a plea to the jurisdiction, arguing that the judicial review and UDJA claims against them were barred by sovereign immunity. The Commissioner further argued that Brumfield's UDJA claims did not fall within the ultra vires exception. Alternatively, the Division and the Commissioner argued the UDJA claims were barred by the redundant remedies doctrine and, to the extent Brumfield's UDJA claims concerned other workers, the claims were not ripe. Brumfield opposed the plea to the jurisdiction. The trial court denied the plea to the jurisdiction. The Division and the Commissioner then appealed.
PLEA TO THE JURISDICTION
A plea to the jurisdiction challenges the trial court's subject matter jurisdiction. City of Dallas v. Carbajal, 324 S.W.3d 537, 538 (Tex. 2010). Its purpose is to establish a reason why the merits of the plaintiff's claim should never be reached. Bland Indep. School Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).
We review the trial court's ruling on a plea to the jurisdiction de novo. Carbajal, 324 S.W.3d at 538. In reviewing a grant or denial of a plea to the jurisdiction, we determine whether the plaintiff's pleadings, construed in his favor, allege sufficient facts affirmatively demonstrating the trial court's jurisdiction to hear the case. Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 2012). If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court's jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the plaintiff should be permitted to replead. Texas Dept. of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 226-27 (Tex. 2004). On the other hand, if the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiff an opportunity to replead. Id. at 227.
APPLICABLE LAW
Unless waived, sovereign immunity protects the State, its agencies, and officials from suit. Hearts Bluff, 381 S.W.3d at 476. In determining whether the Legislature has waived immunity from suit, "a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language." TEX. GOV'T CODE ANN. § 311.034 (West 2013). Sovereign immunity from suit deprives a trial court of subject matter jurisdiction. Miranda, 133 S.W.3d at 225-26.
However, under the "ultra vires exception" to sovereign immunity, certain claims may be brought against a state official. Texas Dept. of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011). "To fall within this ultra vires exception, a suit must not complain of a government officer's exercise of discretion, but rather must allege, and ultimately prove, that the officer acted without legal authority or failed to perform a purely ministerial act." City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009). The proper defendant in an ultra vires action is the state official whose acts or omissions trampled on the plaintiff's rights, not the state agency itself. Sefzik, 355 S.W.3d at 621; Heinrich, 284 S.W.3d at 372-73.
Ripeness is a threshold issue that implicates subject matter jurisdiction. Patterson v. Planned Parenthood of Houston and Southeast Texas, Inc., 971 S.W.2d 439, 442 (Tex. 1998). "A court has no jurisdiction to render an advisory opinion on a controversy that is not yet ripe." City of Garland v. Louton, 691 S.W.2d 603, 605 (Tex. 1985). Ripeness emphasizes the need for a concrete injury for a justiciable claim to be presented. Patterson, 971 S.W.2d at 442. "At the time a lawsuit is filed, ripeness asks whether the facts have developed sufficiently so that an injury has occurred or is likely to occur, rather than being contingent or remote." Id.
JUDICIAL REVIEW CLAIMS
The Division and the Commissioner first argue sovereign immunity bars Brumfield's claims for judicial review.
In his pleadings, Brumfield challenges all adverse findings, conclusions, decisions, and orders of the Division on his claim for benefits under the Texas Workers' Compensation Act, and asks the trial court to determine that he sustained a compensable injury in the course and scope of his employment. Brumfield further asks the trial court to determine that the Division's final decision was wrong and that he is entitled to workers' compensation income and medical benefits.
The Texas Labor Code provides that a party who is aggrieved by a final decision of the Division in a workers' compensation case may seek judicial review in the courts. See TEX. LABOR CODE ANN. § 410.251 (West 2015). The Labor Code outlines the Division's role in suits for judicial review. Id. § 410.254 (providing that the Division shall be permitted to intervene in a proceeding for judicial review of its decision). The Division argues that because no clear and unambiguous waiver of sovereign immunity exists in the Labor Code, the Division cannot be a party to a suit for judicial review in a worker's compensation case. According to the Division, the proper adverse party in Brumfield's suit for judicial review is the worker's compensation carrier, Zurich American Insurance Company. In response to this argument, Brumfield does not direct us to anything in the Labor Code, or any other statute for that matter, showing that the Legislature has waived sovereign immunity for Brumfield's claim for judicial review. In the absence of a clear and unambiguous waiver of the Division's immunity from Brumfield's claim for judicial review, we conclude this claim is barred by sovereign immunity.
Similarly, the Commissioner argues that no clear and unambiguous waiver of sovereign immunity exists for the judicial review claim brought against him. The same sovereign immunity generally extends to Texas state officials who are sued in their official capacities because that is merely another way of pleading an action against the entity of which the official is an agent. Texas Dep't of State Health Serv. v. Balquinta, 429 S.W.3d 726, 738 (Tex. App.—Austin 2014, pet. dism'd). Here, Brumfield's pleadings fail to allege a single act or omission by the Commissioner and in fact merely duplicate the allegations against the Division. Therefore, we conclude that Brumfield's judicial review claim against the Commissioner is barred by sovereign immunity.
Because Brumfield's judicial review claims against both the Division and the Commissioner are barred by sovereign immunity, the trial court erred in denying the plea to the jurisdiction as to these claims.
DECLARATORY JUDGMENT CLAIMS
The Division and the Commissioner argue that Brumfield's UDJA claims against them are barred by either sovereign immunity, the redundant remedies doctrine, or the ripeness doctrine. We first address the arguments related to sovereign immunity.
In his pleadings, Brumfield seeks declarations that (1) Brumfield was a covered employee pursuant to the client service agreement; (2) the statutory terms of a covered employee were met under section 91.0012 of the Texas Labor Code, regardless of any contractual terms that conflict with the statutory requirements; (3) under the client service agreement the effective date of employment means the first day of the first pay period that eESI coemploys an employee at the client's worksite; (4) the relationship between eESI and Double M Services was pursuant to a professional employer services agreement in compliance with chapter 91 of the Texas Labor Code; (5) 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 covered employees; (6) the intent of the drafters of the client services agreement was to be bound by specific Texas laws and rules, including Section 91 of the Texas Labor Code; and (7) Brumfield was a covered employee for the purposes of workers' compensation.
The UDJA is not a general waiver of sovereign immunity. Texas Parks and Wildlife Dep't v. Sawyer Trust, 354 S.W.3d 384, 388 (Tex. 2011); Heinrich, 284 S.W.3d at 373 n.6. The UDJA does not waive immunity against claims seeking a declaration of the claimant's statutory rights. City of McKinney v. Hank's Restaurant Group, L.P., 412 S.W.3d 102, 112 (Tex. App.—Dallas 2013, no pet.). However, the UDJA does provide a narrow waiver of immunity for claims challenging the validity of statutes. See Sawyer, 354 S.W.3d at 388. "[T]he state may be a proper party to a declaratory judgment action that challenges the validity of a statute." Sefzik, 355 S.W.3d at 622. The UDJA does not enlarge the trial court's jurisdiction, but is merely a procedural device for deciding cases already within a trial court's jurisdiction. Id. at 621-22.
Waiver of Immunity for UDJA Claims
Nowhere in his pleadings does Brumfield challenge the validity of a statute. Instead, Brumfield seeks declarations of his rights under the Texas Labor Code and under the coemployment agreement between Double M Services and eESI. Therefore, Brumfield's claims do not fall within the UDJA's narrow waiver of immunity. See Sefzik, 355 S.W.3d at 621.
Brumfield nevertheless argues that sovereign immunity is waived as to his UDJA claims because the law provides that sovereign immunity is waived when a plaintiff seeks interpretation of a statute. We disagree. As recently clarified by the Texas Supreme Court, "the UDJA does not waive immunity when the plaintiff seeks a declaration of his or her rights under a statute or other law." Sefzik, 355 S.W.3d at 621 (citing Heinrich, 284 S.W.3d at 372-73); Hank's Restaurant Group, 412 S.W.3d at 112. Brumfield further argues that Patel v. Texas Dep't of Licensing and Regulation, 469 S.W.3d 69 (Tex. 2015), demonstrates that his UDJA claims are not barred by sovereign immunity. Again, we disagree. The plaintiffs in Patel, unlike Brumfield, challenged licensing statutes and regulations as violating the Texas Constitution's due course of law provision. Id. at 73. Thus, the plaintiffs in Patel challenged the validity of statutes and regulations, not the rulings of the agency. Id. at 77. Here, by contrast, Brumfield does not challenge the validity of any statute; instead, he seeks interpretations of the statutes and the agreement that form the basis of the workers' compensation decision against him. Thus, when construed in his favor, Brumfield's pleadings fail to allege facts affirmatively demonstrating the trial court's jurisdiction over the above-referenced UDJA claims.
Ultra Vires Exception
Next, the Commissioner argues Brumfield's declaratory judgment claims against him do not fall within the ultra vires exception to sovereign immunity. Under the ultra vires exception, a suit that cannot be brought against a state agency may be brought against the allegedly responsible state official in his official capacity. See Patel, 469 S.W.3d at 76. "[T]he premise underlying the ultra vires exception is that the State is not responsible for unlawful acts of officials." Id. Nevertheless, to fall within the ultra vires exception, a suit must allege that a state official acted without legal authority or failed to perform a purely ministerial act; it must not attack the official's exercise of discretion. Id.; Heinrich, 284 S.W.3d at 372.
Here, Brumfield's pleadings regarding the Commissioner simply state that he "acted beyond [his] statutory authority in failing to properly apply, interpret, and enforce the statute and rules for which declaratory relief is sought." Brumfield's pleadings fail to include any specific facts indicating that the Commissioner acted without legal authority or failed to perform a purely ministerial act. Rather, the focus of Brumfield's allegations is a discretionary act—the Division's decision to deny his claim for workers' compensation. Complaints that an official reached a wrong result when exercising its delegated authority are insufficient to state an ultra vires claim of exceeding statutory authority. Moers v. Harris Co. Appraisal Dist., 469 S.W.3d 655, 666 (Tex. App.—Houston [1st Dist.] 2015, pet. denied). Thus, Brumfield's pleadings affirmatively demonstrate that his claims against the Commissioner do not fall within the ultra vires exception.
Redundant Remedies Doctrine
Additionally, the Division and the Commissioner argue that, even if the above-referenced UDJA claims are not barred by sovereign immunity, they are barred by the redundant remedies doctrine. "Under the redundant remedies doctrine, courts will not entertain an action brought under the UDJA when the same claim could be pursued through different channels." Patel, 469 S.W.3d at 79. Thus, when a plaintiff invokes a statutory means of attacking an agency order, the trial court lacks jurisdiction over an additional claim under the UDJA that would merely determine the same issues and provide substantively the same relief as the statutory remedy. Balquinta, 429 S.W.3d at 746.
Here, the above-referenced UDJA claims seek the same substantive relief as the judicial review claims: reversal of the decision denying Brumfield workers' compensation benefits. Therefore, independent of sovereign immunity, the trial court lacks jurisdiction over the above-referenced UDJA claims under the redundant remedies doctrine.
Ripeness Doctrine
Finally, we consider whether Brumfield's remaining UDJA claim is barred by the ripeness doctrine. In addition to the previously mentioned declarations, Brumfield's pleadings seek a declaration that "a worker who fills out and completes an employment application assigning the workers to the [c]lient company is a covered employee." The Division and the Commissioner argue that, to the extent Brumfield's pleadings seek a broad declaration for other workers, the trial court was deprived of jurisdiction because Brumfield's claims were not ripe for review.
"A case is not ripe when its resolution depends on contingent or hypothetical facts, or upon events that have not yet come to pass." Patterson, 971 S.W.2d at 443. We agree with the Division and the Commissioner that the resolution of Brumfield's claim concerning other workers depends upon hypothetical facts and events that have not come to pass. We conclude that, to the extent Brumfield's pleadings seek a declaration concerning the rights of other workers, his claim is not ripe for review.
In sum, all but one of Brumfield's UDJA claims against the Division and the Commissioner are barred by sovereign immunity and the redundant remedies doctrine, and the remaining UDJA claim is barred by the ripeness doctrine. Therefore, the trial court erred in denying the plea to the jurisdiction as to Brumfield's declaratory judgment claims against the Division and the Commissioner.
CONCLUSION
When a plea to the jurisdiction is granted based on sovereign immunity, a plaintiff is allowed the opportunity to replead if the defect can be cured. Sefzik, 355 S.W.3d at 623; Hernandez v. Texas Dept. of Ins., Workers' Compensation Div., No. 04-14-00123-CV, 2014 WL 3747306, at *2 (Tex. App.—San Antonio 2014, no pet.). In Sefzik, the Texas Supreme Court allowed repleading because the plaintiff had brought his claim pre-Heinrich and its "decisions prior to Heinrich were 'less than clear' as to who the proper party was in a suit for declaratory remedy, as well as the parameters of the ultra vires exception to the doctrine of sovereign immunity." 355 S.W.3d at 623. Thus, the plaintiff was given the opportunity to replead so he could pursue his claims against state officials under the ultra vires exception. Id.
Here, Brumfield essentially argues that he should be permitted to replead for the same reasons as the plaintiff in Sefzik. However, unlike the plaintiff in Sefzik, Brumfield brought his claim post-Heinrich, after the parameters of the ultra vires exception to sovereign immunity were clarified. In addition, Brumfield has already joined both the Division and the Commissioner in his suit, and we have determined that the ultra vires exception to sovereign immunity does not apply here. Because the defects in Brumfield's pleadings are not curable, Brumfield is not entitled to replead. See Sefzik, 355 S.W.3d at 623; Hernandez, 2014 WL 3747306, at *2.
We reverse the trial court's denial of the plea to the jurisdiction and render judgment dismissing Brumfield's claims against the Division and the Commissioner for lack of jurisdiction.
Karen Angelini, Justice
(West 2015).