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In re Old Republic Risk Management

Court of Appeals of Texas, Twelfth District, Tyler

June 12, 2019

IN RE: OLD REPUBLIC RISK MANAGEMENT, OLD REPUBLIC INSURANCE COMPANY, THORNTON, BIECHLIN, REYNOLDS & GUERRA, L.C., TIMOTHY K. SINGLEY AND DANA M. GANNON, RELATORS

          ORIGINAL PROCEEDING

          Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

          MEMORANDUM OPINION

          Brian Hoyle, Justice.

         Relators, Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds, and Guerra, L.C., Timothy K. Singley, and Dana M. Gannon, filed this original proceeding to challenge Respondent's denial of their plea to the jurisdiction and motion to dismiss.[1] We conditionally grant the writ.

         Background

         On January 22, 2018, Debra Morris, Individually and as representative of the Estate of Kenneth W. Morris, Ashley Bialowas f/k/a Ashley Morris, Amanda Morris Wright, Jimmy Williams, Rebecca Williams, Orlando Ordaz, and Roy McCollough, the Real Parties in Interest (RPIs), sued Relators for fraudulent lien, declaratory judgment, insurance code violations, fraud, independent fraudulent acts by lawyer/law firm, and conspiracy to assert fraudulent lien. According to the petition, a fire and explosion occurred at the Georgia-Pacific plywood mill in Corrigan, Texas on April 26, 2014. The explosion injured several employees and resulted in at least one fatality. Old Republic provided workers' compensation insurance coverage to Georgia-Pacific and paid benefits to the RPIs. The RPIs also filed a personal injury lawsuit against certain third parties. In their petition against Old Republic, the RPIs alleged that Old Republic sent written notice claiming a lien against the third-party claims based on medical, and wage benefits paid by Old Republic and related to the RPIs' injuries. The RPIs settled with two of the third parties and proceeded to a jury trial in federal court as to the remaining third parties. The federal court denied Old Republic's motion to intervene.

         On September 28, 2018, Relators filed a plea to the jurisdiction and motion to dismiss the RPIs' lawsuit against them for lack of subject matter jurisdiction. They alleged that the RPIs' claims arose from Old Republic's investigation, handling, or settlement of workers' compensation benefits, and they had not exhausted their administrative remedies under the Texas Workers Compensation Act (the Act). According to Relators, the Division of Workers Compensation (DWC) maintained exclusive jurisdiction to hear claims alleged in the RPIs' lawsuit. Relators sought dismissal of the RPIs' claims for fraudulent lien, violations of insurance code Section 541.061, fraud, independent fraudulent acts by lawyer/law firm, and conspiracy to assert fraudulent lien, leaving only the declaratory judgment claim.

         In a letter to the parties, Respondent denied the plea to the jurisdiction and motion to dismiss. Respondent's letter states, in pertinent part, as follows:

At the time of the motion hearing on February 25th, I announced an inclination to deny the Plea and Motion in the absence of: 1) case authority dealing solely with a subrogation lien dispute without suspension of [workers' compensation] benefits; 2) a specific administrative violation as to subrogation liens in Chapter 415; or 3) [an] agency ruling /appeals decision pertaining to subrogation liens pursuant to Chapter 415. Having found none, I make this ruling although I would not be surprised if appellate courts differ with my decision on the basis of an intended "pervasive regulatory scheme" of the Labor Code for disposition by the [DWC] on everything workers' compensation related.

         On March 18, Respondent signed an order denying the plea to the jurisdiction and motion to dismiss. This proceeding followed.

         Prerequisites to Mandamus

         Mandamus is an extraordinary remedy. In re Sw. Bell Tel. Co., L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding). A writ of mandamus will issue only when the relator has no adequate remedy by appeal and the trial court committed a clear abuse of discretion. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding). The relator has the burden of establishing both prerequisites. In re Fitzgerald, 429 S.W.3d 886, 891 (Tex. App.-Tyler 2014, orig. proceeding.). To prevent disruption of the orderly processes of government, the denial of a plea to the jurisdiction for failure to exhaust administrative remedies is reviewable by mandamus. See In re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (per curiam, orig. proceeding); see also In re Tex. Mut. Ins. Co., 360 S.W.3d 588, 592 (Tex. App.-Austin 2011, orig. proceeding).

         Abuse of Discretion

         Relators contend that Respondent abused his discretion by denying their plea to the jurisdiction and motion to dismiss because the RPIs' claims are within the DWC's exclusive jurisdiction and the RPIs failed to exhaust their administrative remedies.

         Standard of Review and Applicable Law

         A trial court abuses its discretion when it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if it clearly fails to correctly analyze or apply the law. Cerberus Capital, 164 S.W.3d at 382. This standard has different applications in different circumstances. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). When reviewing the trial court's resolution of factual issues or matters committed to its discretion, we may not substitute our judgment for that of the trial court. Id. The relator must show that the trial court could reasonably have reached only one conclusion. Id. at 840. Our review of the trial court's determination of the ...


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