State News : Texas

A claimant cannot bring a declaratory judgment action with an action for judicial review. The
claimant filed suit against the carrier seeking judicial review of the Division’s determination that
her injury was no longer compensable based on an injurious practices defense. She also sought a
declaration that the injurious practices defense is not a proper defense under the Workers’
Compensation Act. The claimant brought suit against the carrier, but the Division intervened in the
suit as a necessary party to the declaratory judgment action, which it considered “an impermissible attempt to control state action.” The Court dismissed the declaratory judgment action and held that
it was barred by the doctrine of sovereign immunity. The Court noted that the claimant did not
challenge the validity of a statute, but rather its interpretation.
Tex. Dept. of Ins. v. Green, 2016 WL 2745063 (Tex. App.—Houston [1st Dist.] 2016).
A different Court of Appeals has also held that a claimant cannot bring a declaratory judgment
action with an action for judicial review. The claimant sought judicial review of the Division’s
determination that he was not a covered employee at the time of injury and that his injury was not
compensable. He also sought declarations that he was a covered employee, regarding various
provisions of the client contract at issue, and that a worker becomes a covered employee when
certain criteria are met. The claimant brought suit against the carrier, the Division, and the
Commissioner for all claims asserted. The Court held that the judicial review claims were barred by sovereign immunity as against the
Division and the Commissioner, and that no exception applied. Concerning the declaratory
judgments, the Court held that sovereign immunity bars claims against the state that seek
interpretation of a statute, as opposed to challenging the validity of the statute, and the claimant only
sought interpretation of a statute. It held that the claims against the Commissioner did not allege an
ultra vires act, as they challenged a discretionary act only – the decision to deny the claim for
compensation, and were thus barred. It held that, even ignoring sovereign immunity, the remedies
sought by the declaratory judgments were redundant, and in fact identical, to the relief sought in the
judicial review action. Lastly, the Court held that a declaration sought regarding when any worker
becomes a covered employee is not ripe for adjudication, as it concerns the rights of other workers
not before the Court. All claims against the Division and the Commissioner were dismissed.
Texas Dept. of Ins. v. Brumfield, 2016 WL 293380 (Tex. App.—San Antonio 2016).

The Labor Code limits an injured worker’s eligibility for income benefits to 401 weeks from the date
of injury. The injured worker in this case did not receive a certification entitling him to IIBs until
423 days after the date of injury. The carrier argued that he was thus ineligible to receive any IIBs.
The injured worker argued that the statute should be interpreted to mean that an injured worker
cannot receive more than 401 weeks of income benefits total. The Court sided with the injured
employee and found that the maximum number of weeks of income benefits, including TIBs, IIBs,
and SIBs, that an injured worker can receive is 401, but that benefits can be paid after 401 weeks
from the date of injury.
Tex. Mut. Ins. Co. v. McGahey, 2016 WL 2753981 (Tex. App.—San Antonio 2016).

The time limit to seek judicial review is mandatory, and failure to seek judicial review before the
deadline with deprive a court of jurisdiction to hear the claim. The claimant appealed an adverse
Decision & Order to the Appeals Panel, who affirmed the Hearing Officer. The claimant then filed
a bad faith action in district court, which was dismissed. The claimant did not appeal the dismissal,
but several months later filed a new action seeking judicial review of the Decision & Order.
Because the claimant did not file her action for judicial review within 45 days from the date the
Appeals Panel’s determination was mailed to her, the trial court lacked jurisdiction to hear her claim
for judicial review.
Baldwin v. Zurich Am. Ins. Co., 2016 WL 2907939 (Tex. App.—Austin 2016).

The exclusive remedy defense is alive and well. An injured worker won an $8.7 million judgment
at trial against his employer. The plaintiff was hired by Job Link, who assigned him to work for
Tractor Supply. He was injured and brought suit against Tractor Supply. The Court found that he
was a temporary employee of Tractor Supply, as he was working on their premises in the furtherance
of their day-to-day business, his injury was caused by his work for Tractor Supply, he was trained
by, supervised by, and received his assignments from Tractor Supply employees.
The Court next considered whether Tractor Supply, who did not carry their own policy for their
permanent employees, was covered under Job Link’s policy. The court found that they were
covered, because Job Link’s workers’ compensation policy contained a blanket Alternate Employer
Endorsement and they provided the carrier with a list of covered client companies to the carrier
listing Tractor Supply and describing the Plaintiff’s job duties. The Court reversed the award of
damages and held that Tractor Supply was entitled to the exclusive remedy defense.
Tractor Supply Co. of Texas, LP v. McGowan, 2016 WL 1722873 (Tex. App.—Waco 2016).

Multiple Guaranty Associations brought claims for breach of contract stemming from unpaid policy
deductibles. The trial court granted Defendant Hill Bros.’ summary judgment concluding the
Associations’ claims were time-barred. After determining that various Guaranty Associations had
standing to bring suit on the underlying policy issued by an impaired carrier, the Third Court of
Appeals reversed the trial court and remanded the case for further proceedings.
The appellate court held that the statute of limitations on a breach of contract claim for failure to
reimburse deductibles does not accrue until a demand is made to the insured and the insured fails
to pay on demand. Because large deductible endorsements do not specify the time period within
which demand must be made by the carrier, the court concluded that demand for payment must be
made “within a reasonable time.” A “reasonable time for demand,” the Court explained, is
coincident with the four year limitations period for a breach of contract claim. In other words, in
Texas, a carrier has up to four years to make a demand for reimbursement of a deductible, and the
statute of limitations begins to accrue once the insured fails to make payment on demand.
Applying this rule to the Guaranty Associations’ claims, the court reversed the trial court’s judgment
on limitations and remanded the case for further proceedings.
Cal. Ins. Guar. Assoc., et al. v. Hill Bros. Transp. Co., 2016 WL 2991081 (Tex. App.—Austin
2016).

The CCH landscape is changing at a fairly rapid rate these days. The retirement of David Wagner
(Abilene), Carolyn Moore (Lubbock) and Cheryl Dean (Ft. Worth) ushers in a whole new crop of
judges. In Houston there are three new faces, Robin Burgess, Early Moye, and Francisca Okonkwo.
In Dallas/Fort Worth, DWC hired Amanda Barlow. Out West, Travis Dupree (Midland) and Teresa
Boone (Lubbock)joined the Hearings team. Finally, two traveling Hearing Officers, Mayson
Pearson and Dee Marlo Chico, will be filling in where needed. These changes should keep us on
our toes for several months to come.

The CCH landscape is changing at a fairly rapid rate these days. The retirement of David Wagner
(Abilene), Carolyn Moore (Lubbock) and Cheryl Dean (Ft. Worth) ushers in a whole new crop of
judges. In Houston there are three new faces, Robin Burgess, Early Moye, and Francisca Okonkwo.
In Dallas/Fort Worth, DWC hired Amanda Barlow. Out West, Travis Dupree (Midland) and Teresa
Boone (Lubbock)joined the Hearings team. Finally, two traveling Hearing Officers, Mayson
Pearson and Dee Marlo Chico, will be filling in where needed. These changes should keep us on
our toes for several months to come.

Three Appeals Panel cases of interest in the past couple of months include:
APD 160228 (decided 3/24/16) - the hearing officer erred in appointing a new designated doctor
after a CCH. The Appeals Panel noted the Rule 127.5(d) provision that a previously assigned
designated doctor is on the claim unless and until the DWC authorizes or requires the doctor to stop
providing services on a claim. The rules set out the reasons the DWC can authorize or require a
doctor to get off a claim, none of which applied in this case. The Appeals Panel looked at the DRIS
notes that the self-insured introduced during the CCH, and determined that those notes did not reveal
any exception to the requirement that the initially appointed designated doctor should remain on the
claim. The hearing officer appointed the second designated doctor because he exercised his
discretion in appointing a new designated doctor because he was concerned that the initial doctor
might “take umbrage in being instructed that his opinion of extent was rejected.” The Appeals panel
held that the hearing officer’s reason for appointing a new doctor was not one of those set out in the
rules and reversed the decision that the second designated doctor was properly appointed and held
that the doctor was not properly appointed.
APD 160074 (decided 3/21/16) - the hearing officer erred in admitting testimony of a doctor whose
identity was not timely exchanged and the decision on extent of injury, disability, MMI and IR was
reversed and remanded for the hearing officer to make a decision without consideration of that
doctor’s evidence. The Appeals Panel determined that the doctor’s name was received by the
claimant after the normal business hours (10:00 p.m.) on the 15th day following the BRC, it was not
timely exchanged (because it must be exchanged within 15 days of the BRC) and the hearing officer
did not discuss the reasons for the late exchange or make a determination of good cause to allow
the testimony despite the lack of timely exchange. The Appeals Panel excluded that doctor’s
testimony completely. The decision is silent on whether there was a report from that doctor in
evidence.
APD 160057 (decided 3/10/16) - Sure hope this is a trend ! The hearing officer erred in holding that
the claimant had not reached MMI per the treating doctor referral’s alternate certification, where that
doctor’s opinion was based on the fact that the claimant needed further treatment (injections) but
the compensable injury was limited to a lumbar sprain/strain (the other lumbar spine conditions
having been determined not to be compensable and not having been appealed). As the designated
doctor had rendered multiple certifications, one of which was for the lumbar sprain/strain only, the
Appeals Panel reversed and rendered an decision using the designated doctor’s certification that
claimant had reached MMI and assigned an impairment rating based on the DWC-determined
compensable injury. Of special significance to the Appeals Panel was the fact that there was no
evidence establishing that the recommended injections were treatment for the lumbar sprain/strain,
which was the only compensable condition.

On April 14, 2016, the DWC held its Quarterly Insurance Carrier Meeting. The Division reported
that the 484 pending air ambulance disputes have been abated pending resolution of litigation in
state and federal court regarding reimbursement for those services. The Division reported
approximately 30 new air ambulance cases are being filed each month, which will also be abated.
Martha Luevano, Director of Medical Fee Dispute Resolution (MFDR) at DWC, also reminded
Carriers of the requirement to respond timely to medical fee disputes. It was noted that 12% of the
time MFDR does not receive a response. Since a response is required by rule, failure to respond
may result in an administrative violation.

With the recent torrential rains, we expect a larger crop of mosquitos this spring and summer. The
US Centers for Disease Control (CDC) issued an alert about the spread of the Zika virus, and Texas
is included in the CDC’s estimate of the areas in the United States where the mosquitos more likely
to spread viruses like Zika, dengue, chikungunya and other viruses can be found. The National
Institute for Occupational Safety & Health (NIOSH) recommends employers protect workers and
workers protect themselves by using preventative measures including: protecting equipment in the
field, removing debris from ditches, filling in areas that collect standing water, removing tires,
buckets and items that collect standing water, and placing holes in containers that could collect
standing water where mosquitos may breed. The CDC and NIOSH have also provided a link for
insect repellant safety at
http://www.cdc.gov/niosh/topics/outdoor/mosquito-borne/default.html.
In Texas, insect bites and stings have been held not to be acts of God and are compensable when
causation is established. It is not enough to show that the injury occurred while in the course and
scope of employment. A claimant must also prove that the injury was of such kind and character as
had to do with and originated in the employer's work, trade, business or profession. Standard Fire
Ins. Co. v. Cuellar, 468 S.W.2d 880 (Tex. Civ. App.-San Antonio 1971, writ ref'd n.r.e.). To show
causation, the claimant must prove that the conditions and obligations of the employment placed him or her in harm's way. Texas Workers' Comp. Ins. Fund v. Simon, 980 S.W.2d 730 (Tex. App.-San
Antonio 1998, no writ.) Employers whose workplace presents an increased risk for exposure to
mosquitos should be especially cautious (agricultural, outdoor maintenance, road construction) and
look into extra preventive measures.