Case Information

*0 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 1/15/2015 5:07:44 PM JEFFREY D. KYLE Clerk *1 ACCEPTED 3790076 THIRD COURT OF APPEALS AUSTIN, TEXAS 1/15/2015 5:07:44 PM JEFFREY D. KYLE CLERK NO. 03-13-00300-CV ________________________________________________________ IN THE COURT OF APPEALS FOR THE THIRD JUDICIAL DISTRICT AUSTIN, TEXAS ________________________________________________________ ADRIAN TIJERINA, Appellant,

v. TEXAS PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION AS RECEIVER FOR SIR LLOYD’S INSURANCE COMPANY, AND TEXAS DEPARTMENT OF INSURANCE, DIVISION

OF WORKERS’ COMPENSATION, Appellees .

_________________________________________________________ APPELLEE TEXAS DEPARTMENT OF INSURANCE, DIVISION OF

WORKERS’ COMPENSATION’S NOTICE OF RECENT DECISION

__________________________________________________________ TO THE HONORABLE THIRD COURT OF APPEALS:

COMES NOW, Appellee, Texas Department of Insurance Division of Workers’ Compensation, and herein files this Notice of Recent Decision in the

above captioned appeal and in support thereof will show the following:

I. On January 14, 2015, the Fourth Court of Appeals issued an Opinion in Case No. 04-14-00449-CV, styled Texas Department of Insurance- Division of Workers’

Compensation v. Ronald Mensch, a copy of such Opinion being attached hereto as

Exhibit A. In that case, the Fourth Court reversed the trial court’s denial of Texas

Department of Insurance Division of Workers’ Compensation’s (“TDI-DWC”)

Plea to the Jurisdiction and dismissed TDI-DWC from the case, because the

plaintiff in the trial court had failed to exhaust his administrative remedies and,

therefore, the trial court had no jurisdiction over TDI-DWC. The fact patterns of

this case and the Mensch case are remarkably similar in that both involve “old law”

workers’ compensation law and go to the ability of the injured worker to sue TDI-

DWC to force it to take jurisdiction over a matter not ripe for TDI-DWC’s

involvement. In essence, in both cases, the injured worker seeks a sort of pre-

authorization for medical services not yet provided.

The undersigned feels that the Mensch decision is directly on point with this case or, at the very least, may be a useful and instructive tool for this Court in

determination of this matter.

Respectfully submitted, KEN PAXTON

Attorney General of Texas CHARLES E. ROY First Assistant Attorney General JAMES E. DAVIS Deputy Attorney General for Civil Litigation DAVID A. TALBOT, JR.

Division Chief, Administrative Law Division 2

/s/ Dennis McKinney __________________ Assistant Attorney General State Bar No. 13719300 O FFICE OF THE A TTORNEY G ENERAL OF T EXAS A DMINISTRATIVE L AW D IVISION P. O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone: (512) 475-4020 Fax: (512) 320-0167 dennis.mckinney@texasattorneygeneral.gov Attorneys for the Texas Department of Insurance Division of Workers’ Compensation CERTIFICATE OF SERVICE This is to verify that a true and correct copy of the foregoing Appellee’s

Notice of Recent Decision was sent to all parties of interest on this the 15th day of

January, 2015, to the following:

Greg Whigham Via Facsimile

MacInnes, Whigham & Siefken, LLP

3505 Northland Drive, Suite 205

Austin, Texas 78731

Phone: (512) 477-6813

Facsimile: (512) 477-7573

Attorneys for Appellee TPCIGA

Kevin B. Miller Via Facsimile

Mark A. Cevallos

Law Offices of Miller & Bicklein

4555 East University, Suite D-5

Odessa, Texas 79762

Phone: (432) 362-4878

Facsimile: (432) 362-4624

Attorneys for Appellant

/s/ Dennis McKinney __________________ DENNIS M. MCKINNEY Assistant Attorney General 3

EXHIBIT A *5 frourttl [.surt Øppestø $.un Øntoníl, @,exug

OPINION

No. TEXAS DEPARTMENT OF INSURANCE _ DIVISION OF WORKERS' COMPENSATION,

Appellant

Ronald MENSCH,

Appellee From the 73rd Judicial DiStrict Courl, Bexar County, Texas Trial Court No. 2010-Cl-02326 Honorable Barbara Hanson Nellermoe, Judge Presiding Sandee Bryan Marion, Chief Justice Opinion by: Sandee Bryan Marion, Chief Justice

Sitting:

Karen Angelini, Justice

Luz Elena D. Chapa, Justice

Delivered Filed: January 14,2015 '

REVERSED AND RENDERED Texas Deparlment Insurance, Division Workers' Compensation ("the Division")

appeals from trial court's denial its plea which it alleged the trial court

lacked jurisdiction over the lawsuit filed by Ronald Mensch because Mensch failed exhaust his

administrative remedies, We reverse and render dismissal in favor of Division.

BACKGROUND Mensch was injured on June 1980, in,a work-related accident when tire rim struck him in the face. State Farm Insurance, the workers' compensation insurance carrier, paid for medical

04-14-00449-Cv expenses related to Mensch's teeth until 2008, at which time State Farm refused to pay any

additional medical benefits for his teeth. Mensch filed suit, State Farm filed a plea to the

jurisdiction, and the lawsuit was abated for a pre-hearing conference before the Division. On

October 19,2011, the Division rendered finaljudgment that Mensch's injury was in the course

and scope his employment and he was entitled to lifetime medical benefits for those injuries.

Mensch's lawsuit against State Farm was then reinstated.

Thereafter, Mensch approached State Farm pre-approval additional dental work costing in the range $50,000 to $75,000. State Farm denied request pre-approval on

grounds that, under governing law, those medical services had to first be rendered to employee

before being presented to carrier. A second pre-hearing conference before the Division was

held on February 11,2014, at which Mensch requested preauthorization for additional dental work

and he presented an affidavit from his doctor stating he needed another dental procedure to treat

hiscompensableinjury. OnMayT,2014,theDivisionsentalettertoMensch'sattorneystating initial award issued on October 19,20ll had become final;therefore, Division's authority

to act further medical benefits was limited to the procedures set forth Article 8307, section the Texas Civil Statutes in effect at time of his injury. Division further stated that its

continuing jurisdiction to render successive awards was limited to costs expenses items

actually furnished to and received Mensch; therefore, the Division had "no authority to

preauthorize dental procedure." The letter ended by stating "[u]ntil incurred and itemized bills

are presented to the canier, [Division] has no jurisdiction to act on the carrier's liability to

furnish medical benefits, [Division would] take no further action on the claim." Mensch

then amended his lawsuit to add the Division seeking declaration that the Division has determine whether he is entitled additional dental work that he had

exhausted his administrative remedies and was entitled seek medical benefits from State Farm,

04-14-00449-CY The Division State Farm each filed pleas tb jurisdiction, which were both denied. State Farm filed petition for writ of mandamus, which is pending before this court in appellate

cause number 14-14-00519-CV. The Division filed this underlying interlocutory accelerated

appeal. On appeal, Division argues "old" workers' compensation law requires Mensch to

first receive medical treatment and pay that treatment before he can present his claim to

Division for adjudication. Division asserts that because Mensch has not yet received paid his medical care, the Division has no authority to "adjudicate" or "pre-approve" his claim and,

thu s' tri ar cou rt Div is i on

î:iïffi äïiïÏ*îÏ:":ii There is no dispute that Mensch's claim is governed by the Workers' Compensation Act in effect at the time his injury in 198O-Article 8306, section 7,and Article 8307, section 5.

See Actof Mar. 28,1917,35th Leg., R,S., ch. 103,1917 Tex, Gen. Laws269,269 (repealed 1989)

(current version Texas Workers' Compensation Act at TEX. Leeon Copp A¡rN. ch. 408 (West

2006 &. Supp. 2014)); see also City Houston v. Rhule,417 S.W.3d 440, 442 (Tex. 2013) (statute

in effect at time of injury controls).r

On appeal, Division relies section Article 8307, which, in pertinent part, provided follows: "Notwithstanding any other provision of this law . . , no award the Board,

and no judgment of court , . . shall include such Award or Judgment any cost or expense of

any such items not actually furnished and received employee prior the date of said

qward judgmenl." TEX, Rpv. Clv. Srar, AxN. art. 8307, $ 5 (emphasis added). The Division

argues that under section 5, additional dental work has not yet been frirnished and received

I Th.Artwas furtherrevised in 1989 with revisions nottakingeffectuntil January l,l99l . See Act of Dec. 1989,

Tlst Leg.,2nd C,S,, ch. l, 1989 Tex. Gen. Laws I, I15,

[3]

by Mensch; therefore, Mensch cannot present his claim to Division for adjudication, nor can

he seek a judgment court. The Division argues Mensch must first receive and pay for the

additional dental work, and then exhaJst his administrative remedies by submitting the claim to Division determination whether treatment is related to his compensable injury and

whether the cost the treatment is reasonable and necessary, The Division concludes that because

Mensch did not exhaust his administrative remedies, trial couft lacks jurisdiction over his

claims.

Mensch, on the other hand, relies on section 7 of Article 830ó, which, in pertinent paft, provided follows: "The employee shall have sole right to select choose persons or

facilities to furnish medical aid, chiropractic services, hospital services, and nursing and the

association shall be obligated same or, alternaîively, at employee's option, the ussociølion

shallfurnish such medical aid, hospital services, nursing, chiropractic services, and medicines øs

may reqsonably be required st the time injury ancl øt any time lhereafler lo cure and

relievefromlhe effects naturally resultingfromthe ínjuryi' Tpx. Rpv. Ctv. SrRr, AN|N. art,

8306, $ 7, repealed Acts 1989,71s1 Leg., 2nd C,S., ch. l, $ 16,01(7) to (9), eff. Jan. 1,1991

(West Supp, 1994). Mensch argues section 7 (1) provides him with medical services for life, (2)

requires State Farm to "furnish" his medical care, (2) does not require him to bear cost his

treatment then seek reimbursement, and (4) at most, State Farm could only contend the charges

were not reasonable and necessary.2

To resolve issue on appeal, we turn to the interplay between Article 8306, section 7, Article 8307, section 5,3 Before 1957, Article 8306, section 7, provided, generally, that 2ln his brief, Mensch refers State Farm, but State Farm is not pafty this appeal. None the cases which Mensch relies support his argument, Mensch cites Employers Mutual Casualty Co, v, Poorman,428 S,W.2d 698,701 (Tex. Civ. App,-San Antonio writ ref d n.r.e.) for the proposition that his

insurer should furnish reasonable medical and hospital services for an injured worker during the

first four weeks following injury and, on proper weekly certificates, should fi;rnish additional

medical services for a total period not exceeding ninety-one days and additional hospital services

for a total period not exceeding 180 days. See Tex. Cas. Ins. Co. v. Beasley,39l S.W.2d 33,39

(Tex. 1965)(op.onreh'g). lnlg57,sectionTwasamendedtoremovethetimelimitationonthe

insurer's liability for medical and hospital services and the need for weekly cerlificates. Id, The

Act of 1957 also added a new paragraph to Article 8307, section 5, which stated:

Notwithstanding any other provision of this law, as amended, no award of the Board, and no judgment of the court, having jurisdiction of a claim against the association the cost or expense of items of medical aid, hospital services, nursing, chiropractic services, medicines or prosthetic appliances furnished to an employee under circumstances creating a liability therefor on the part of the association under provisions of the law, shall include such Award or Judgment any cost or expense of any such items not actually furnished to and received by the employee prior to date of said award or judgment. The first such final Award or Judgment rendered on such claim shall be res judicata of the liability of association for all such cost or expense which could have been claimed up to the date of said award or judgment of the issue that the injury of said employee is subject to the provisions of this law with respect to such items, but shall not be res judicata of obligation of the association to furnish or pay for any such items after the date of said Award or Judgment. After first such final award or judgment, the Board shall have continuing in the same case to render successive awards to determine the liability association for the cost expense any such items actually furnished to received by said employee not more than six (6) months prior to the date each such successive award, until the association shall have fully discharged its obligation under this law to furnish all such medical aid, hospital services, nursing, chiropractic services, medicines or argument appeal was "adopted by this Court when it held that judgments cannot extinguish the 'obligation of the association furnish or pay such items after the date said award or judgment,"' That was not the holding of court, but instead, is portion of section 5 quoted by this court, The Poorman court actually held follows: "The

right to recover for necessary medical services after trial' is valuable benefit under said Act which is limited by

the safeguard that recovery is limited to the services actually furnished, amount recoverable for these services is

determined after same are furnished, To make certain thatthe employee will receive all of his required future medical

services, the Legislature expressly directed that the award orjudgment include only expenses for medical services received prior to entry of same. Under the plain wording Sec, 5, Art, the judgment entered in this case should nothaveincludedanitemforthereasonablecostoffuturehospital andmedical seryices," Id.at70l. Anothercase

cited Mensch, Texas Employers Insurance Associationv. Chappell,494 S,W.2d 159 (Tex. 1973), dealtwith notice,

and the employee had already incurred expenses. Finally, Peqrce v. Texas Employers Insurance Associalion,403 S,W.2d 493 (Tex, Civ, App,-Dallas 1966), writ ref'd n.r,e.,412 S,\ry,2d (Tex, 1967), dealt with a compromise

settlement agreement and held section 5 had no application compromise settlement agreements approved by

Board pursuant Article 8301, section 12.

-5- prosthetic appliances to which said employee may be entitled; provided, each such successive award of the Board shall be subject to suit to set aside said award a court competent in the same manner provided in the case of other awards under this law,

TEx, Rev. Ctv. SrRr. ANN. art. 8307, $ 5.

"[T]hese 1957 amendments require the insurer to furnish all medical services as may reasonably be required to cure relieve the employee from the effects naturally resulting from

his injury, but... Section 5, Art,8307, prohibitstherendition of an award ofjudgmentforfuture

medical expenses in workmen's compensation case." Employers Mut, Cas. Co, v. Poorman,428

S.W.2d 698,701 (Tex. App.-San Antonio writ refld n,r,e.). section 5 safeguards,

embodied the "res judicata provisions," provide that no award or judgment is authorized for

such additional expenses unless and until the services are actually furnished. Id. Specifically,

section 5 provides that the first final award or jJdgment rendered on an employee's claim shall be

res judicata (l) issue insurer's liabilify for allsuch costs or expenses that could have

been claimed up to date first final award or judgment, and (2) on the issue that

employee's injury is subject to the provisions of this law with respect to such items. Tpx. Rpv,

Cry. Srer, ANN. art. 8307, $ 5. However, first final award or judgment shall not be res judicata

of the insurer's obligation to furnish or pay for any such items after the date first frnal award

or judgment. Id. As to any costs or expenses after the date first final award or judgment,

section 5 gives Division "continuing jurisdiction" render "successive a\ryards" future

medical expenses. Id.; see also Pearce v. Tex. Employers Ins. Ass'n,403 S.W.2d 493,498 (Tex,.

Civ. App.-Dallas 1966)writ ref'd n.r.e.,412 S.W.2d (Tex.1967). This ensures employee

will be able to obtain medical care and related expenses after the finaljudgment.

However, safeguard the insurer, the "res judicata provisions" provide that the employee is not entitled receive successive awards future medical expenses until cost expense

-6-

04- I 4-00449-CV of any future medical care is actually furnished to and received by the employee before the date of

any successive award. See Poorman, 428 S.W,2d af 701. Thus, obvious purposes of the

paragraph added to section 5 of Article 8307 was to (l) implement the unlimited medical and

hospital provisions of section of Article 8306; and (2) provide certain safeguards both

employee insurer, Poorman,428 S.W.2d at70l) Pearce,403 S'W,2d at 498.

As noted previously, there is no dispute that "old" workers' compensation law applies here because Mensch was injured in 1980, We conclude that, under "old" law, Mensch is not

entitled to recover a judgment any expenses he has not actually incurred, first final award Division October 19,201l, is res judicata to medical care and related expenses Mensch

incurred prior to this date. After this date, Division has continuing jurisdiction to render

successive awards to determine the cost or expense any further medical care actually furnished

to received by Mensch "not more than six (6) months prior to the date each such successive

award, until the finsurer] shall have fully discharged its obligation under this law to furnish all

such medical aid, hospital services, nursing, chiropractic services, medicines prosthetic

appliances which fMensch] may be entitled . . . ." TEX. RPv. Cry. Sr,qr. A¡w, art. 8307, $ 5.

Based on the provisions Article 8307, section Texas courts have long held that trial courts do not have originaljurisdiction over claims and disputes arising out on-the-job injuries.

See Employers' Indem. Corp, v. úI/oods,243 S.W, 1085, 1087 (Tex. Comm'n App' 1922); Størnes

v. Tex. Employers'Ins, Ass'n,549 S.W.2d 46,47 (Tex. Civ. App.-Dallas1977, writ refd n.r.e.).

Thus, party must pursue its administrative remedy first at the agency level, before seeking relief district court. See Johnsonv. American Gen, Ins. Co.,464 S.W.2d 83, 84 (Tex. 1971). The

failure obtain an administrative ruling on an issue arising under workers' compensation

statute prevents party from later invoking the courl resolve issue.

Anlcromv. Dallas Cowboys Football Club, Ltd.,900 S,W.2d 75,77 (Tex. App.-Dallas 1995, writ

-7 -

denied); Paradissisv. Royal Indem. Co.,496 S.W.2d 146,150 (Tex. Civ. App.-Houston Il4th

Disr.l 1973), aff'd,507 S,W,2d 526 (Tex. 1974); Paci/ìc Indem, Ins. Co. v. Liberty MuL Ins, Co., S.W.2d 91,93 (Tex. App.-Austin 1992, no writ). The requirement that an employee must

exhaust administrative remedies before seeking relief from district courl applies even after the

insurer's liability for future benefits has been established. See Pqradissrs, 507 S.W,2d at 529-30

(affirming dismissal action in district court failure to exhaust administrative remedies to

continuing medical services).

In this case, Mensch sought from both the Division and trial court an adjudication of medical care expenses he has not yet incurred. "old" workers' compensation law requires

Mensch to first receive the sought-after medical care incur the related expenses. If insurer

refuses pay some all of expenses, Mensch must then pursue administrative remedies

before he may pursue a judicial remedy. Because Mensch did not pursue his administrative

remedies, the trial court lacked jurisdiction over his claims against Division. Accordingly,

trial court erred by denying the Division's plea jurisdiction.

CONCLUSION Because the trial court did not have subject-matter jurisdiction, we reverse the trial courl's order denying the Division's plea render judgment dismissing Mensch's

claims against Division.

Sandee Bryan Marion, Chief Justice -8-