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American Zurich Insurance Co. v. Diaz

Court of Appeals of Texas, Fifth District, Dallas

February 28, 2018

AMERICAN ZURICH INSURANCE CO., Appellant
v.
JESSICA R. DIAZ, Appellee

         On Appeal from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-013641

          Before Justices Lang, Fillmore, and Schenck

          MEMORANDUM OPINION

          ROBERT M. FILLMORE JUSTICE

         Jessica R. Diaz filed this lawsuit seeking judicial review of an administrative order by the Texas Department of Insurance, Division of Workers' Compensation (the Division) that found Diaz's first certification of maximum medical improvement (MMI)[1] and assignment of impairment rating (IR)[2] was final. After considering competing motions for summary judgment, the trial court granted judgment in favor of Diaz and against American Zurich Insurance Co., and determined (1) Diaz timely disputed the first certification of MMI and assignment of IR; (2) the first certification of MMI and assignment of IR did not become final; and (3) Diaz did not reach MMI on August 29, 2014, and her IR is not zero percent. American Zurich appeals the trial court's order, arguing it was entitled to judgment as a matter of law. In the alternative, American Zurich asserts there is a genuine issue of material fact that precludes summary judgment. We reverse the trial court's judgment, and render judgment that Diaz take nothing on her claims.

         Background

         On February 14, 2014, Diaz injured her back while lifting a box in the course and scope of her employment. American Zurich, Diaz's employer's workers' compensation insurance carrier, accepted liability for a strained or sprained lower back. Diaz was treated for her injury, including receiving epidural injections in May and June of 2014. An MRI performed on July 3, 2014, revealed Diaz had disc protrusions at L3-4, L4-5, and L5-S1.

         The Division designated Dr. David Bradley to examine Diaz to determine the extent of injury and whether she had achieved MMI, and to assign an IR. Dr. Bradley examined Diaz on August 9, 2014, and requested Diaz undergo additional nerve testing. The results of the nerve test on August 29, 2014, were a "normal study of both lower extremities." On September 22, 2014, Dr. Bradley completed a Report of Medical Evaluation (DWC-69), in which he opined Diaz's injury extended to stenosis and disc protrusions at L3-4, L4-5, and L5-S1; and Diaz had not reached MMI because a medical treatment recommended by Diaz's treating physician was pending, American Zurich had denied treatment until the extent of injury question could be resolved, and Diaz had not received the prescribed level of care for disc herniation. In Dr. Bradley's opinion, Diaz would reach MMI on or about December 20, 2014.

         Diaz was referred to Dr. Robert Holladay IV for a Post Designated Doctor's Required Medical Examination. Dr. Holladay examined Diaz on December 3, 2014, and completed a DCW-69 in which he opined Diaz's injury caused a strain or sprain in her lumbar spine, and the "degenerative changes with minimal bulges at multiple levels" seen in the MRI of Diaz's back were "not related to any of the mechanism of lifting a box." Based on his examination of Diaz and his review of her medical records and clinical history, Dr. Holladay certified that Diaz reached MMI on August 29, 2014, and assessed an IR of zero percent.

         On December 17, 2014, Diaz received a DWC PLN-3, "Notification of Maximum Medical Improvement/First Impairment Income Benefit Payment, " and Dr. Holladay's DWC-69. The PLN-3 informed Diaz that, based on Dr. Holladay's findings, she was not eligible for additional income payments, but was entitled to necessary medical benefits related to her injury. The PLN-3 also informed Diaz that, if she did not agree with Dr. Holladay's certification of MMI or assignment of IR, she had ninety days from the date she received the notification to file a dispute with the Division "by contacting the Division office handling [her] claim at 1-800-252-7031."

         On February 4, 2015, American Zurich filed a Request to Schedule a Benefit Review Conference (DWC-45) with the Division. By checking boxes on the form, American Zurich identified the disputed issues to be mediated at the benefit review conference (BRC) as the extent of the compensable injury, the designated doctor's certification of MMI, and the designated doctor's assessment of IR. American Zurich described the disputed issues as:

Carrier disputes the September 22, 2014 designated doctor report of David Bradley, D.C. in which he opines the claimant has not yet reached MMI. In his post designated doctor report dated December 3, 2014 Robert Holladay IV, M.D. opined the claimant reached MMI on August 29, 2014 with a 0% IR. Carrier disputes the compensable lumbar sprain/strain injury extends to and includes stenosis or disc protrusions at L3-4, L4-5, or L5-S1.

         Attached to American Zurich's DWC-45 was a February 3, 2015 email to Diaz's counsel stating:

We represent American Zurich in the above-referenced matter. Carrier would like to request a BRC to dispute the designated doctor's certification Ms. Diaz has not reached MMI and his extent opinion. Please accept this email as Carrier's efforts to resolve this matter before requesting a BRC. Would Ms. Diaz be interested in agreeing that her compensable injury does not extend to include stenosis and disc protrusions at L3-4, L4-5, and L5-S1, and that she reached MMI on August 29, 2014 with 0 percent whole person impairment in accordance with Dr. Holladay's certification.

         Diaz's counsel responded, "We do not agree with the carrier." Although Diaz filed a DWC-45 on March 4, 2015, requesting the BRC be rescheduled, she did not file a DWC-45 disputing Dr. Holladay's certification of MMI and assignment of IR.

         A BRC was held on April 22, 2015, at which a benefit review officer attempted to mediate a resolution of the "disputed issues." The parties were unable to reach an agreement and, on June 23, 2015, a hearing officer conducted a contested case hearing to decide: (1) does Diaz's compensable injury extend to include stenosis and disc protrusions at L3-4, L4-5, and L5-S1; (2) has Diaz reached MMI and, if so, on what date; (3) if Diaz has reached MMI, what is the impairment rating; and (4) did the first certification of MMI and assignment of IR from Dr. Holladay on December 3, 2014, "become final under Texas Labor Code Section 408.123 and Rule 130.12." The hearing officer found Diaz's injury extended to stenosis and disc protrusions at L3-4, L4-5, and L5-S1; Dr. Holladay's December 3, 2014 certification was the first certification of MMI and assignment of IR and was valid for purposes of Rule 130.12(c); Dr. Holladay's December 3, 2014 certification was provided to Diaz by verifiable means on December 17, 2014; and Diaz did not dispute the first valid certification by Dr. Holladay within ninety days after receiving Dr. Holladay's certification and assignment. The hearing officer found unpersuasive Diaz's arguments that (1) American Zurich's DWC-45 was sufficient to constitute a dispute by Diaz of Dr. Holladay's certification of MMI and assignment of IR, or (2) she met an exception to the requirement that she dispute the first certification of MMI or assignment of IR within ninety days of verifiable receipt. The hearing officer concluded the "first certification of MMI and IR assigned by Dr. Holladay on December 3, 2014 became final under Act Section 408.123 and Rule 130.12"; Diaz reached MMI on August 29, 2014; and Diaz's IR is zero percent.

         Diaz appealed the decision to the Division's Appeals Panel. Without issuing a substantive decision, the Appeals Panel notified the parties on October 1, 2015, that the hearing officer's decision was final. Diaz filed suit seeking judicial review of the administrative decision that she reached MMI on August 29, 2014, and had a zero percent IR.

         American Zurich filed a motion for traditional summary judgment on the ground Dr. Holladay's December 3, 2014 certification that Diaz reached MMI on August 29, 2014, and assignment of an IR of zero percent, was final because Diaz failed to file a dispute of the certification and assignment within ninety days of receiving the PLN-32 and Dr. Holladay's DWC-69. American Zurich also moved for a no-evidence summary judgment on the ground that Diaz could produce no evidence an exception to the ninety-day filing requirement applied. Diaz filed a competing motion for traditional summary judgment, arguing (1) she was not required to file a separate DWC-45 on the same issue raised in American Zurich's DWC-45 that simply requested the opposite result, and (2) her counsel's response to American Zurich's email was sufficient to constitute a dispute of Dr. Holladay's certification of MMI and assignment of IR. Diaz also filed a response to American Zurich's motion for summary judgment in which she argued she could dispute Dr. Holladay's certification of MMI and assignment of IR outside the ninety-day period because there had been a clearly mistaken diagnosis before the date of certification.

         The trial court granted Diaz's motion and denied American Zurich's motion. The trial court ordered that Diaz disputed Dr. Holladay's certification of MMI and assignment of IR within ninety days; the first certification of MMI and assignment of IR by Dr. Holladay did not become final; and Diaz did not reach MMI on August 29, 2014, and did not have an IR of zero percent.

         American Zurich brought this appeal, and argues in its first two issues that the trial court erred by (1) granting Diaz's motion for summary judgment and denying American Zurich's traditional motion for summary judgment because Dr. Holladay's certification that Diaz reached MMI on August 29, 2014, and assignment of an IR of zero percent became final ninety days after Diaz received the PLN-32 and Dr. Holladay's DWC-69, and (2) denying American Zurich's no- evidence motion for summary judgment because Diaz ...


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