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In re Accident Fund General Insurance Co.

Supreme Court of Texas

December 15, 2017

In re Accident Fund General Insurance Company and Kriste Henderson, Relators

         On Petition for Writ of Mandamus

          PER CURIAM

         The Texas Workers' Compensation Act "provides the exclusive process and remedies for claims arising out of a carrier's investigation, handling, or settling of a claim for workers' compensation benefits." In re Crawford & Co., 458 S.W.3d 920, 925-26 (Tex. 2015) (orig. proceeding); see Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 444, 456 (Tex. 2012). In this original proceeding, we determine whether the Division of Workers' Compensation has exclusive jurisdiction over statutory and tort claims alleging the Act's "bona fide offer of employment" process was misused to fabricate grounds for firing a covered employee. Because we conclude the trial court lacks subject-matter jurisdiction over the employee's retaliation, conspiracy, and tortious-interference claims against the workers' compensation carrier and its agent, we conditionally grant mandamus relief. The employer's mandamus petition, seeking dismissal or abatement of both related and distinct claims, is not properly before us. See Tex. R. App. P. 52.3(e); see also Tex. R. App. P. 52.1, 52.3(k)(1)(B), 52.7. Accordingly, we deny the employer's petition without regard to the merits.

          Ricky Sayaz suffered a serious injury in the course and scope of his employment with Coil Tubing Solutions, LLC, a workers' compensation subscriber. Coil Tubing notified its carrier, Accident Fund General Insurance Company, who assigned the claim to an insurance adjuster, Kriste Henderson. Accident Fund accepted coverage and paid income and medical benefits to Sayaz.

         While Sayaz was recuperating, Coil Tubing sent him two offers for modified-duty work labeled "Bona Fide Offer of Employment." Both letters contained details of the work locations, responsibilities, and hours. The second letter provided (1) a beginning date of either three days after the letter's issuance or immediately after acceptance and (2) an expiration date eleven days after the letter's issuance. The offer purported to be consistent with a physician's work-status report stating that, with certain restrictions, Sayaz could return to work.

         Sayaz neither explicitly accepted nor rejected either modified-duty offer, but his wife, Nelda Ramirez, emailed Coil Tubing with concerns about his ability to work and attached information from other doctors. When Sayaz did not accept the offers or return to his former job, Coil Tubing terminated his employment.

         Sayaz sued Coil Tubing for (1) wrongful discharge and retaliation under Labor Code section 451.001 and (2) defamation. Ramirez sued Coil Tubing for injuries sustained while caring for Sayaz, as well as loss of household services, pain and suffering, and loss of consortium. Sayaz also sued Accident Fund and Henderson, alleging they aided and abetted Coil Tubing's section 451.002 violation, tortiously interfered with Sayaz's employment relationship, and conspired with Coil Tubing to unlawfully discharge and retaliate against him. According to Sayaz, Accident Fund was complicit in procuring modified-duty job offers that were not legitimate and which served as a pretext for retaliatory discharge. Ramirez asserted no claims against Accident Fund and Henderson.

         Relying on our opinions in Crawford and Ruttiger, Accident Fund and Henderson (collectively Accident Fund) filed a plea to the jurisdiction, asserting exclusive jurisdiction lies with the Division of Workers' Compensation. The trial court denied the plea, and the court of appeals summarily denied Accident Fund's petition for mandamus relief.

         When an agency has exclusive jurisdiction and the plaintiff has not exhausted administrative remedies, the trial court lacks subject-matter jurisdiction and must dismiss any claim within the agency's exclusive jurisdiction. In re Entergy Corp., 142 S.W.3d 316, 321-22 (Tex. 2004) (orig. proceeding). Whether exclusive jurisdiction is vested in the Division as to the claims against Accident Fund is a question of law we review de novo. Id.

         The Workers' Compensation Act "provides the exclusive procedures and remedies for claims alleging that a workers' compensation carrier has improperly investigated, handled, or settled a workers' claim for benefits." Crawford, 458 S.W.3d at 923-24; see Ruttiger, 381 S.W.3d at 443, 445, 451. In Ruttiger, we applied that rule to preclude certain Insurance Code and common-law bad-faith claims against the compensation carrier because those claims were at odds with the workers' compensation system's dispute-resolution process. 381 S.W.3d at 443, 445, 450-51. For the same reason, we concluded in Crawford that a host of tort, contract, and statutory claims could not go forward against the carrier in the trial court. 458 S.W.3d at 922, 929. As both Crawford and Ruttiger explain, allowing parties to pursue remedies that circumvent the Division's exclusive jurisdiction would undermine the workers' compensation system's careful benefits-determination and claims-resolution processes. See id. at 924; Ruttiger, 381 S.W.3d at 440-41, 443.

         Not all statutory and common-law claims against a carrier run counter to the Act, but at the same time, neither a claim's label nor the relief requested is determinative of the jurisdictional inquiry. Crawford, 458 S.W.3d at 926. Rather, the substance of the claim controls whether the Workers' Compensation Act provides the exclusive process and remedies and, thus, vests exclusive jurisdiction with the Division. The dispositive issue in this case is whether Sayaz's claims against Accident Fund-which are all premised on the existence of sham modified-duty offers-arise out of Accident Fund's investigation, handling, or settling of a claim for workers' compensation benefits. Id. at 925-26. We agree with Accident Fund that, necessarily, they do.

         To advance the workers' compensation system's goal of returning injured employees to work as soon as is safe and appropriate, the Legislature enacted a process that encourages employers to offer injured employees "a bona fide position of employment that the employee is reasonably capable of performing, given the physical condition of the employee and the geographic accessibility of the position to the employee." Tex. Lab. Code § 408.103(e); see id. §§ 402.021(a)(4), .021(b)(2), .021(d). As part of this process, either the employer or the carrier can request a work-status report from the treating physician by providing information about available modified-duty positions. 28 Tex. Admin. Code § 129.6(a). The employer may then offer the employee a modified-duty position based on the employee's existing work abilities as determined by the treating physician. Id. § 129.6(b).

         In addition to facilitating a speedy return to work, the bona-fide-employment-offer process is a benefits-determining mechanism. After a modified-duty job offer is made, the carrier may deem it bona fide based on a detailed set of criteria. Id. § 129.6(d)-(f). If the carrier deems the offer bona fide, it may then treat the offered wages as the employee's post-injury earnings, whether the employee accepts the offer or not. Id. §§ 129.2(c)(3), 129.6(g). This is significant because post-injury earnings are deducted from the employee's lost-wages benefits. Id. §§ 129.2(a), (b), (c)(3), 129.3(d). If a dispute concerning an offer of modified-duty employment arises, either the employee or the carrier may initiate the administrative dispute-resolution process, and the Division will determine if the offer is bona fide under the statutorily prescribed criteria. See id. § 129.6(h).

         Though dissatisfied with the terms of the modified-duty job offers, Sayaz did not seek resolution through the workers' compensation administrative process. Rather, Sayaz sued Coil Tubing and Accident Fund, characterizing the job offers as "bogus" because they "were extended during times that Sayaz was not permitted to work" and the short response deadline given was "arbitrary." He claimed Coil Tubing terminated him for failing to accept the job offers as pretext for workers' compensation retaliation and that Accident Fund "aided and abetted Coil Tubing in orchestrating a pretext for terminating" him by "direct[ing] Coil Tubing on how to create a pretext for ...

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