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Texas Mutual Insurance Co. v. Garcia

Court of Appeals of Texas, Eighth District, El Paso

April 3, 2019

TEXAS MUTUAL INSURANCE COMPANY, Appellant,
v.
MARIA GARCIA and ANTHONY GARCIA, Appellees.

          Appeal from the 34th District Court of El Paso County, Texas (TC# 2005-6345)

          Before McClure, C.J., Rodriguez, J., and Larsen, Senior Judge Larsen, Senior Judge (Sitting by Assignment)

          OPINION

          YVONNE T. RODRIGUEZ, JUSTICE

         In this administrative appeal, Texas Mutual Insurance Company challenges a trial court's modified de novo determination that the insurance company improperly suspended the payment of death benefits to a claimant before a purported settlement agreement between the claimant and an alleged third-party tortfeasor could be fully funded.

         We will affirm the judgment of the trial court.

         BACKGROUND

         In October 2000, Manny Garcia suffered a fatal on-the-job injury and died. His employer, Alamito Construction Company, was a worker's compensation subscriber. Following Manny Garcia's death, Alamito's carrier, Texas Mutual, began paying death benefits to Garcia's widow and then-minor child.

         Later, the Garcias (including Manny's two adult sons who were not entitled to death benefits from Texas Mutual) filed a third-party action against Hansen Construction Company, alleging Hansen was responsible for Manny's death (the Hansen Suit). On August 16, 2004, Hansen's counsel sent counsel for the Garcias the following letter:

Dear Mr. Scherr:
I write to confirm our telephone conversation of August 16, 2004, wherein your clients have agreed to accept a settlement offer in the following amounts in exchange for a full end final release of all claims in the above-referenced case:

Maria Garcia

$35, 000.00

Anthony Garcia

$15, 000.00

Jorge Garcia

$375, 000.00

Juan Manuel Garcia

$375, 000.00

Further, the plaintiffs must satisfy and my client must be fully and completely indemnified from any and all medical expenses, third party claims, or other liens or claims arising from this incident. This letter will serve as our interim agreement until we can execute a formal release and dismissal. Once I receive the settlement checks, I will forward them to your attention along with the appropriate settlement documents for your clients' signatures.
If my understanding is correct, please sign in the space provided below and return to me. If my understanding is incorrect, please advise me immediately.

         Counsel for the Garcias signed the letter. But before the interim agreement could be funded or paid, Texas Mutual suspended the payment of death benefits to the eligible Garcias and intervened in the Hansen Suit to assert a right to reimbursement from any third-party settlement funds. Litigation in the Hansen Suit continued; Texas Mutual, Hansen, and the Garcias entered mediation; the Garcias made concessions to Texas Mutual regarding amounts to be assigned to Texas Mutual for reimbursement purposes and future credits; and eventually Hansen distributed funds to Texas Mutual and the Garcias on August 19, 2005. All parties agree that the offset was exhausted in November 2011, and that Texas Mutual has resumed paying some benefits.

         However, while the Hansen Suit was still pending, the Garcias challenged Texas Mutual's suspension of death benefits in an administrative proceeding before the Division of Worker's Compensation (DWC). The DWC addressed four questions, ...


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