Wausau Underwriters Ins. Co. v. Wedel, 557 S.W.3d 554

Parties: Wausau Underwriters (insurer), Cactus Transport (insured employer), Western Refining (contracting terminal operator), and employee James Wedel (injured worker/plaintiff).
Contract: Cactus and Western's Asphalt Terminal Access Agreement required Cactus’s workers’ compensation policy be endorsed with a waiver of subrogation in favor of Western entities.
Endorsement: TDI standard form titled "Texas Waiver of Our Right to Recover from Others Endorsement" stated the carrier "will not enforce our right" to recover payments "against the person or organization named in the Schedule" and that the endorsement "shall not operate directly or indirectly to benefit anyone not named in the Schedule." The Schedule listed Western entities (blanket waiver for contracted parties); Wedel was not listed.
Facts: Wausau paid substantial workers’ compensation benefits to Wedel. Wedel later recovered from Western; dispute arose whether Wausau’s endorsement waived not only statutory subrogation (Tex. Lab. Code §417.001) but also statutory reimbursement rights (Tex. Lab. Code §417.002).
Procedural posture: The Court’s majority concluded the endorsement waived both subrogation and reimbursement; Justice Johnson (joined by Justice Boyd) dissented, arguing the endorsement waived only the carrier’s subrogation right against Western and did not waive the separate statutory reimbursement right.

Issue	Plaintiff's Argument (Wedel)	Defendant's Argument (Wausau)	Held
Does the TDI endorsement waive Wausau's statutory right of subrogation and its separate statutory right of reimbursement?	The waiver of the carrier's "right to recover" from a scheduled third party includes both direct recovery (subrogation) and indirect recovery (reimbursement from amounts paid by that third party to the employee).	The endorsement waives only the carrier's right to enforce subrogation against the named third party (Western); it does not waive the separate statutory reimbursement right against the employee where the employee obtains a recovery.	Majority: endorsement waived both subrogation and reimbursement. Justice Johnson (dissent): endorsement waived only subrogation against Western and did not waive statutory reimbursement under §417.002.
Should courts read intent or practical rationale into the mandated TDI endorsement to expand its plain language?	The endorsement should be read to effect the practical purpose of eliminating carrier claims that would interfere with contracting parties' expectations and settlements.	The endorsement must be enforced according to its plain, ordinary language; legislative distinctions between subrogation and reimbursement control; courts should not rewrite unambiguous policy language based on policy rationale.	Held (majority): endorsed a broader practical reading. Dissent: plain-language construction controls; rationale cannot override statutory distinctions.

Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex. 2007) (distinguishing insurer subrogation and reimbursement as separate contractual rights)
State Office of Risk Mgmt. v. Carty, 436 S.W.3d 298 (Tex. 2014) (noting protection of subrogation and reimbursement rights is a primary purpose of Labor Code §§417.001–.002)
Tex. Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31 (Tex. 2008) (discussing first-money reimbursement importance to workers’ compensation system)
Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901 (Tex. 1988) (attorney’s fees as recoverable costs in subrogation context)
Guillot v. Hix, 838 S.W.2d 230 (Tex. 1992) (subrogation rights are derivative and step into the subrogor’s shoes)
Progressive County Mut. Ins. Co. v. Sink, 107 S.W.3d 547 (Tex. 2003) (policy forms mandated by state agency and ordinary meaning governs interpretation)
Greene v. Farmers Ins. Exch., 446 S.W.3d 761 (Tex. 2014) (policy language controls; courts interpret ordinary, plain meaning)
Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006) (when contract language is plain and unambiguous, courts must enforce it)
Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170 (Tex. 2004) (legislative acceptance doctrine applies only where statute is ambiguous and has longstanding administrative construction)
Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278 (Tex. 1999) (administrative construction cannot contradict a statute’s plain meaning)