*1
agreement.
services or
repeatedly
We have
held
sovereign
COMPANY,
ARGONAUT INSURANCE
immunity in ordinary contract
is an
claims
Petitioner,
legislative judgment.
area best left to
See
v.
York,
(“[T]he
simply “may immunity not” claim in this
case. plurality says,
The “Once the Legisla
ture has immunity decided waive for a claims,
class of the inclusion of settlements
within the waiver is consistent with plurali
decision.” 87 at 522.
ty leap alone, makes this on faith certainly
it is inconsistent with this Court’s Pelzel,
previous decisions. See 77 S.W.3d
at (“Express consent is immunity
show that from suit has been
waived_ The consent must be ex
pressed by unambiguous lan ‘clear and ”)
guage.’ (citing Tex. Gov’t Code 311.034 405, 408); Sign, Fed. S.W.2d at
Gen. Servs. Comm’n v. Little-Tex Insulation ., (Tex.2001)
Co
(same). law,
I apply hold settled that the not waived immunity claim,
suit for Lawson’s breach-of-contract jurisdic- dismiss case for want of
tion. I Accordingly, dissent. *2 Grau, Whisler, Grau A. James W.
Scott
Dallas,
PC,
for Petitioner.
Ashley & Koen
Carrington
Jeffrey
Levinger,
Cole-
S.
Blumenthal,
Turley,
man
&
Windle
Sloman
Cowart,
B.
Law Offices of Windle
Thomas
Dallas,
Respondent.
Turley,
delivered
Justice RODRIGUEZ
Court, in which Chief
opinion of the
HECHT,
PHILLIPS, Justice
Justice
OWEN,
ENOCH, Justice
Justice
Justice
BAKER,
join.
and Justice JEFFERSON
required
the Texas
every
carrier
of-
poli-
plans to allow
optional deductible
fer
“self-insure” for the deduct-
cyholders to
5.55C(a).
amount. Tex.
ible
carrier must
policy,
such
Under
to an in-
make all
jured employee, including those
Id. art.
deductible amount.
(e).
5.55C(d),
tortfea-
third-party
When
car-
injuries, the
sor causes
injured employ-
subrogated
rier is
tortfeasor,
rights against the
and the
ee’s
ac-
net amount recovered
shall
to reimburse the carrier
be used
paid. that have been
for benefits
417.002. The issue
allowing
is whether
presented
reimbursed
Insurance Code ar-
the deductible violates
(f),
ticle 5.55C section
“may not be
deductible amount.”
Ins.
5.55C(f).
appeals
court of
held that
does.
to recover defendants $352,596.13 it had The benefits I. Facts disputed Argonaut’s Bakers entitlement to Anthony Baker, $250,000 employee an of Flowers for the deductible, Construction Company, injured arguing was Baker’s 5.55C(f)’s by it was man- collision with a forbidden by employ- truck driven an employee “may date that injured be ee of Rocha Trucking. Because he was any of the pay injured in the scope course and of his 5.550(f). amount.” Rocha Truck- Id. art. employment, Baker filed claim work- ing ultimately agreed pay and its driver ers’ Argonaut benefits with $882,000 all claims to settle asserted Insurance Company, Flowers’ workers’ lawsuit, against including them the Ar- compensation insurance carrier. At the gonaut’s subrogee. claim as Baker’s Un- time, Flowers had a deductible settlement, $529,403.87 der the was provided for Flowers to self-insure the $352,596.13 remaining the Bakers $250,000 of arising loss each was the Bakers’ counsel to submitted to injury work-related suffered employ- pending held trust resolution policy, ees. Argonaut Under would challenge Bakers’ reim- Argonaut’s first apply any recovery from a liable third $250,000. bursement claim the payments to benefit by Argo- made Argonaut court moved the trial for an $250,000 naut in deductible, excess of the compensa- its workers’ order distribute and the remainder of $352,596.13. parties tion lien on the applied to reduce the deductible amount summary judg- then filed cross motions for owed. Flowers ment, asserting each their entitlement Insurance governs Code article 5.55C $250,000 dispute. hearing, After optional such one motions, trial court granted Argonaut’s purchased. Flowers’ deductible summary denied the motion for Bakers’ plan provided for Argonaut the full judgment, and the full awarded each covered claim submitted $352,596.13, attorneys’ less fees and ex- including any portion pay- penses awarded the Bakers’ counsel for able from Flowers’ as mandat- achieving their role in the settlement. The ed “A article 5.55C: appeals court trial court’s modified the provide must that the [carrier] will make judgment Argonaut’s recov- reduced payments all payable benefits that are by $250,000. ery appeals The court of from the deductible amount and that reim- reversed the remainder trial court’s bursement policyholder shall be judgment, which awarded the Bakers’ periodically, rather than at the time counsel attorney’s expenses fees and in- claim costs incurred.” Tex. Ins.Code curred in connection with 5.55C(d). Argonaut paid a total of settlement, and remanded to the trial $352,596.13in ben- court for further proceedings. Baker, efits to and behalf of including this petition asking filed for review us to $250,000paid from the deductible. reinstate judgment the trial court’s award- plans, peti- governs optional deductible ing No it full reimbursement. one this court of must reimburse tioned Court for review the periodically to cover appeals’ remanding the issues of the insurance carrier that are attorney’s expenses to the trial benefit fees and expressly for- deductible amount court. employee having bids Analysis II. 5.55C(d), deductible. (f). Thus, argue, an insurance the Bakers sum parties When both move for to an carrier that has mary judgment granted one motion is may obtain reimbursement denied, appellate court should one *4 of the deductible any amounts in excess presented questions determine all and ren recovery, but must from the der the the trial court reimburse- then look to the for City should have rendered. Garland v. of of amount under those ment News, 351, Morning Dallas Otherwise, contend, provisions. they em- (Tex.2000). Here, rely parties both on statutorily ployers will receive forbidden provisions statutory support to their enti pass by being allowed to on windfall summary judgment. gener tlement the of the deductible. employees their cost al, matters of construction are agreed the Bak- appeals The court questions of law. Id. at 357. ers, prohibi- concluding that article 5.55C’s being on made to the A. deductible, coupled require- with its the relies sections 417.001 car- the the ment that reimburse and 417.002 the its right Labor Code for the paid extent the rier benefits $352,596.13. for the full reimbursement amount, precludes Argonaut provide Those sections a benefit “[i]f the obtaining from by injured employee is claimed or the $250,000 paid funds for the legal beneficiary employee, of the the in from the deductible. subrogated rights is surance carrier the injured employee” net “[t]he employee] amount recovered [an B.
third-party action shall to reim be used case turns on the Because this benefits, burse the insurance carrier for statutory provi of several construction including benefits, medical that have been sions, provisions with the them we start paid compensable injury.” for the statute, “first, by selves. We construe Thus, 417.002. ac meaning looking plain and common Argonaut, paid cording Fitzgerald v. Ad of the statute’s words.” $352,596.13 compensable in for the benefits Inc., Sys., Spine vanced Fixation injury, requires section 417.002 reimburse Under S.W.2d settlement funds the full ment the (e), offering a de 5.55C section $352,596.13paid. statutorily obligated to hand, during claims that arise
On the other Bakers contend “service all pay period, including those claims allowing Argonaut to recover able, part, $250,000 deduct settlement funds effec- whole or 5.550(e). tively passes cost of ible amount.” (d) Likewise, that the car employee, re- section 5.55C, all payments Article rier must “make prohibits. sult article 5.55C payable that are the deductible.” Id. employee, or recovered [to] or 5.550(d). Thus, benefits from his representatives, belongs to the com- the deductible are included pensation amount compensation, carrier paying the paid by full, until it is the carrier to or on representatives, his right have no to any Further, employee. section 417.002 of the Lloyds funds.” Fort Worth v. Haygood, plainly states that the net (1952). 151 Tex. recovered a claimant in a third- right The carrier’s to reimbursement from party action shall be used reimburse the money statutory. the first recovered insurance carrier “for ... 417.001(b) (providing See Tex. Lab.Code compensable have been inju- shall itself first the carrier reimburse ry.” 417.002 (emphasis Tex. Lab.Code recovered, from the amount and then added). Section 417.002 does not limit the injured employee remainder carrier’s to reimbursement to those legal beneficiary). long- Under this excess any recovery from a standing principle, Thus, together, amount. taken these injured employee third party *5 visions establish the right carrier’s to re- subrogation burdened the carrier’s imbursement to the total amount of bene- rights any payments to the extent of made. paid, including fits it has those benefits 417.001(a), (b); § Tex. Tex. Ins.Code payable from the deductible. Serrano, Comp. Workers’ Ins. Fund v. Thus, rather contend, however, The Bakers that al- than employee owning money full lowing the required reimbursement it, being disgorge the carrier is forced section 417.002 conflicts with article money up first to the to the total entitled 5.55C’s mandate may paid, including amount of benefits any not pay part of the deductible, under section 417.002. They argue deductible. further that their fully When the carrier is reimbursed from construction, which limits carrier’s re- party, from a third liable covery to benefits in excess of the case, money being paid this deductible, effectively harmonizes article responsible party, carrier third not 5.55C with section 417.002. To the con- employee, pursuant to the carrier’s trary, their construction conflicts with the employ- right. Accordingly, plain 417.002, which, language of section ee being is not pay employer’s made to under payment scheme established by 5.55C(f). violation of article 5.55C, allows the carrier reimburse- Similarly, allowing the insurance carrier ment paid, of benefits including benefits amount the total third-party does not violate section recovery. Code, 415.006 of bars an the Labor than conflicting Rather with section employer “collect[ing] em- 417.002, Argonaut’s position is consistent ployee, directly premium indirectly, Moreover, with plain language. allow- other paid by fee to obtain ing Argonaut reimbursement of the total insurance.” Tex. $352,596.13 does not contravene article § 415.006. decades, that, 5.55C. For the law has been Compensation under the Workers’ Legislature Presumably, Act’s when the en- subrogation provision, “the money acted article 5.55C in it was aware of necessary prevent prior statutes1 was and similar section 417.002 subroga employees to requiring establishing carrier’s third-party v. no re- See Acker there is tion amount when (Tex. Comm’n, third-party recovery covery Water or when 1990) (“A been presumed to have statute the carrier. fully reimburse insufficient legislature complete by the enacted must then reim- Because the existing and with of the law knowledge of the for all or burse the carrier it.”). There is indication reference being it is that the intended article 5.55C tortfeasor, section third-party aby subroga change existing regarding law 5.550(f) from re- prohibits recovery. According employee to quiring the ly, article 5.55C should be construed deductible. than con
manner that harmonizes rather with the is consistent Our construction flicts with that law. See Tex. Gov’t position. of Insurance’s Department Texas (“If 311.026(a) provision general con agency legislatively Department is the provision, special flicts with a or local charged “regulat[ing] the business construed, possible, provisions shall “ensur[ing] insurance in' this state” and both.”). given so that effect is Code] Insurance and other laws [the Thus, equal applies section 417.002 compa- regarding insurance insurance ly to all claims to allow the nies executed.” a third- to be reimbursed from Department’s 31.002. Rule XIX paid, all benefits it has Rules, publication Texas Basic Manual of *6 regardless of a is in whether deductible Rating Experience and Classifications Bakers’ volved. Under the and dis and Compensation Plan Em- Workers’ construction, prohibit sent’s which would (2nd Reprint) ployers’ Liability Insurance the carrier’s reimbursement from third- insurer provides that the event the “[i]n recovery party recovery from a third makes a amount, injured employ deductible subrogation, the amount recov- through vary depending on ee’s applied to the amount ered shall had whether his a deductible and claim the then paid on the insurer In plan and on the size of that deductible. by the paid deductible fact, approach, if an em under such insured, being made with plan ployer forego chose to a deductible insured, at necessary.” Id. R-l. to the if premiums, its em higher and consis- This is reasonable construction ployee money less out would receive plain language, and the statute’s tent with third-party recovery than consider- entitled “serious is therefore plan lower chose Moore, Dist. v. Appraisal ation.” Tarrant unlikely think it premiums. We 820, 845 823 Instead, result. Legislature intended that 5.55C(f) apply does not when the section III. Conclusion tortfeasor is sum, Argonaut must we conclude for all to reimburse sufficient pro- from the settlement reimbursed paid, including de be it has to and on the benefits ceeds for But its inclusion Article 5.55C ductible. 6a, 1, 16.01(10), C.S., Tex. Gen. Laws ch. re- 1. See Stat. Xex.Rev.Civ. 12, 1989, Leg., 71st 2d 114. pealed. Act of Dec. Baker, including ing optional those plans. More trou- bling, Accordingly, the deductible. this result is based on the fiction we reverse asserting the court of' its own appeals’ judgment subro- gation right regard to the remand to court the trial for further actually asserting when it is puta- Flowers’ ceedings opinion. consistent with this Flowers, subrogation right. however, tive as an employer, any Justice O’NEILL concurred in does not have subro- express under the only. interest terms the Labor Code. See dissenting Justice HANKINSON filed a 401.011(27). 417.001(b), Thus, opinion. Court risk represented has shifted the of a employer’s choice HANKINSON, Justice dissenting. which The facts case perhaps of this forbidden, plainly Legislature has different than other case in which a fa- subrogation rights in created party injures third someone covered employer, vor of insurance, worker’s compensation I Accordingly, has plainly provided. not accord with statutory subrogation respectfully dissent. rights, compensation the worker’s insurer In its overhaul of the worker’s seeks to recoup But there compensation one of system, Legisla is one essential difference in this case that ture’s was to primary goals reduce the Court discusses but then disregards— cost of worker’s insurance is, Anthony Baker’s employei*, and bring sys into the more Company, Construction chose an Alessandra, tem. & A Re See Ashcraft insurance an optional self-in- Compen view Texas Workers’ the New $250,000, sured deductible of but then did System, sation Tex. Tech. L.Rev. pay any part deductible to its (1990); A Al„ Et Guide Montfoed carrier, Comp Reform, at 1-2 Texas Workers’ By Insurance Company. choosing a de- *7 (1991). As of its efforts to achieve plan, ductible Flowers received a substan- that goal, amended the the premium $400,000. tial discount over authorize, among Insurance to other Code But by choosing also a plan, deductible reforms, incentives for premium small
Flowers pay bound to the itself deductible insurance, employers, group certified self- amount to Argonaut under Texas Insur- insurance, and certain loss-sensitive insur 5.55C(d). ance Code art. See Tex. Ins. ance arrangements, including retrospec 5.55C(d). art. Code tively optional rated policies deduct Court, however, permits The 11, 1989, plans. ible of Dec. 71st Act to recover the amount the deductible § Leg., C.S., 2nd Tex. ch. settlement, from Anthony’s instead of from 85; supra, Gen. Laws at 13- Montford, Flowers, though even legally A plan employer 8. allows an deductible responsible under the Insurance Code for premium agreeing to reduce to re paying the and has not done so. in imburse the insurer the holding, accepts so Court Argo- the pays injured employees up surer to to the naut’s contention deductible is not See Tex. art. deductible amount. Ins.Code relevant, (d). 5.55C(c), effectively this case if treats article kind of This simply 5.55C does not exist. This having pay result is shifts the to risk of contrary statutory govern- away scheme amount of the deductible and out of employee’s paycheck employer exchange insurer and to out of proceeds damages recov- premium. a of the insurance his settlement reduction 5.55C(f) (an art. ery. See Tex. Ins.Code plans governed by are Deductible employer who self-insures employee of art. provisions detailed of Insurance Code “may required deductible requires 5.55C. Article 5.55C worker’s amount”); see also any of the deductible optional de- carriers offer 415.006(a)(“[a]n employer § Tex. Lab.Code plans that allow to self- employee, directly may not from an collect insure for the deductible amount. Tex. premium or other fee indirectly, a 5.550(a). art. It requires further Ins.Code obtain workers’ com- provide “must com- coverage”). insurance pensation pany ... all will make bene- provi specific fits that are deductible can harmonize We governing plans with an amount and that reimbursement sions policyholder periodically, general right shall be made insurer’s subro §§ at time are Labor Code 417.001 and rather than claim costs under 311.026(a) 5.550(d). Id. art. The 417.002. Legisla- incurred.” See Gov’t Code (“If a general provision a conflicts with specified person ture also who is “[a] employed by provision, provisions or local policyholder special who self-in- construed, provided possible, sures the amount as so ef shall both.”). may given under Sections 417.001 this article not be fect right to pay any of the Id. 417.002 establish the carrier’s deductible amount.” 5.550(f); recoup paid, do not address see also Tex. Lab.Code but 415.006(a) (“An employer may a deductible. See Tex. Lab. not col- 417.002(a). 417.001(b), As from an ex directly lect or indirect- above, premium ly, paid by gov or other plained fee specific provisions to obtain erned 5.55C, which mandate that the coverage,” except insurance under certain periodic payments the de concerning general circumstances contrac- make toward carriers). tors, subcontractors, ductible, requiring employ forbid and motor amount. pay any ee simple The argument Bakers’ —that (f). 5.55C(d), spe 5.55C, they under article cannot be made can be rec provisions cific of article 5.55C Flowers’ behalf general statutory onciled with carrier’s Anthony’s settlement, Ar- out reimbursing subrogation by right gonaut cannot assert *8 an or employee’s carrier from settlement to de- recover the damages recovery paid over Anthony’s ductible out settlement. amount. But the deductible rejects argument Court based on employ that an mandated general subrogation right granted insurers pay any part cannot be ee §§ in 417.001 and 417.002. Labor Code deductible, the carrier must seek reim seems view doing, so the Court to be the par for the deductible from bursement applies only when there article 5.55C contractually responsible ty statutorily and is no from a third or the employer. it—the recovery is less than the deductible interpretation of my no Thus the relevant amount. But article contains 5.55C and the dif- of the Insurance Code limiting language, such and does not sections for full reimburse- collecting a deductible Labor Code ferentiate between ment to the insurer of all benefits it has simply The carrier does have sub- paid, while at the same time preventing it rogation right regard to the deduct from shifting payment of the deductible Permitting ible. the carrier to recover employer to the employee. An possible this case only is s insurer that has accepts Argonaut’ one proffered fiction employee may recoup any amounts ex- it is asserting its own subrogation cess of the deductible from right, actually when it is asserting the damages recovery, thereby employer’s putative subrogation right. giving effect to Labor Code 417.001 fiction, But by accepting this the Court but then must look to the subrogation rights extends to reimburse the deductible (1) plans, notwithstanding: amount, thereby giving effect to Insurance in the rights absence of such Code art. 5.55C. This ensures that (2) Code; the Insurance Code re employer bears the financial risk it as- deductible; quires pay the opted sumed when it premium for a lower (3) against claim the third in exchange higher deductible, for a with- party employee. belongs to the See defeating out the insurer’s right to subro- Sematech, Inc., Franks v. 936 S.W.2d gation for the benefits it has (“There (Tex.1997) is but one cause of
Moreover,
permit
recoup
employee’s injuries,
action for an
and it
owed
Flowers means
Hix,
belongs
employee.”);
Guillot v.
that Argonaut
actually
asserting subro-
The Leg
gation rights on Flowers’
Argo-
behalf.
easily
islature could
amend the Labor
agreed
naut’s counsel
as much in briefing
give statutory subrogation rights
Code to
and at oral argument of this cause: “[T]he
to employers
policies
with deductible
insurer in
actually
this case is
pursu-
also
specify
amend the
Insurance Code
ing
employer’s subrogation
rights to
applies only
when
5.55C
there
the extent
employer’s
deductible.”
party,
from a third
or when the
(Brief
9);
on the Merits at
“[I]n a sense
recovery is
than
less
today
stands here
also
amount. But the Court’s
effort
treat
shoes of Flowers Construction under the Argonaut’s subrogation claim on Flowers’
(Oral
contract.”
Argument Transcript at
behalf as if
Argonaut’s
it were
own subro-
3).
But an
who chooses- a de- effectively
claim
amends the stat
does not have subrogation
Legislature’s
utes
stead.
rights under
Subrogation
the Labor Code.
Nor Anthony receiving
a double re-
rights under sections 417.001 and 417.002
covery, as Argonaut
Anthony
contends.
are limited to entities defined as an “insur-
permanent injuries,
suffered severe
carrier,”
includ-
ance
which includes insurance
ing brain damage,
eighteen-wheel
companies,
self-insurers,
when
certified
and self-
tractor-trailer
governmental
going
wrong way
insured
on a
entities. Tex. Lab.
401.011(27).
highway
divided
slammed into
Employers
the van he
who
optional
riding
job.
choose
was
do
while on the
His wife
not fall
*9
any
within
of those
sued the
categories,
trucking company
and
driver and
on
thus do
not
subrogation
Anthony
have
behalf of
rights un-
and their children. The
compensation
der the
trucking company’s
worker’s
poli-
law. See
insurer tendered
401.011(6)
limits,
id.
(defining
cy
shortly
“certified self-
after the Bakers filed
401.011(28)
insurer”),
(defining
parties
$657,000
“insurance
suit the
settled for
in cash
company”).
$225,000
annuity.
in an
Although An-
and ex
thony’s family
ployee
paying
each
the deductible
members
claimed loss
consortium,
parties
employers
allocated the full
entitled to
cluding
those
Anthony.
settlement amount to
There is
statutory subrogation rights.
dispute
Anthony’s
no
that
medical
ongoing
presents
simple question:
This
a
cause
expenses
likely exceed the amount of
mil
employ-
As
between
compensa-
and his worker’s
settlement
ee,
carrier for
who should reimburse the
Anthony
yet
tion benefits. Thus
has
I
with the court of
agree
the deductible?
whole,
Argonaut’s
and so
contention
“[r]egardless
appeals’ answer that
of how
receiving
that he is
double
characterized,
of the
it is
Furthermore,
this case is incorrect.
this
amount out
argument
point.
is beside the
amounts to
recovery specialized statutory subrogation
payment
employ-
compensation
rule
worker’s
—that
This is statu-
employer.
ee instead of
money goes to the
insurer —exists
torily
Am. Ins. recoup the deductible amount 1966) (stating Anthony’s proceeds out of con- money paid to first entitled or recovered 5.55C(d)’s flicts both article mandate by employee), with v. S. Ortiz Great Fire reimburse carriers for ben- (Tex. Co., & Cas. Ins. S.W.2d efits to the extent 1980) (stating equitable that under subro- 5.55C(f)’s prohibition amount and article gation, insurer is not entitled to “[a]n sub- any requiring employees rogation if the insured’s loss inis excess of amount. It also creates statu- the amounts recovered from the insurer tory subrogation rights employ- favor of loss.”). causing third So ers, Code does when long recoup as the can insurer Accordingly, respectfully vide I them. paid, purpose it has amounts of subro- dissent. worker’s Moreover, scheme is fulfilled.
Department posi of Insurance has taken a Argonaut’s
tion consistent with construc statutory provisions, of the relevant
and that here lan contained construction,
guage consistent with
does not make that more construction
persuasive. Casualty See Continental Co. Downs,
v. Leg
That at odds construction is plain language forbidding em
islature’s