NO. 09-0310
IN THE SUPREME COURT OF TEXAS
TEXAS MUTUAL INSURANCE CO. F/KJA TEXAS WORKRS'
COMPENSATION INSURNCE FUN
Petitiòner
V.
SONIC SYSTEMS INTERNATIONAL, INC. AND
RANDY CROIX, EDDIE CROIX INSURANCE AGENCY, INC.
Respondents.
On Petition for Review from the Foureenth Court of Appeals, Houston, Texas
No. 14-07-00103-CV
TEXAS MUTUAL INSURANCE COMPANY'S
REPLY BRIEF ON THE MERITS
Mary Barrow Nichols Mary A. Keeney
State Bar No. 01831600 State Bar NO.1 1 170300
Mimi Shelton GRA YES, DOUGHERTY, HEARON & MOODY
State Bar No. 18208650 A Professional Corporation
TEXAS MUTUAL INSURACE COMPANY 401 Congress Avenue, Suite 2200
6210 E. Hwy. 290 Austin, Texas 78701
Austin, Texas 78723 Telephone: (512) 480.5682
Telephone: (512) 224.2723 Facsimile: (512) 480.5882
Facsimile: (512) 224.3353
ATTORNEYS FOR TEXAS MUTUAL INSURACE COMPAN
February 4, 2010
TABLE OF CONTENTS
Index of Authorities .......... ... ....... ......... ............. ... ................ ............................... ................ iii
i. Summary of Reply ....................................................................................................1
II. Sonic has waived all appeal points except for the applicability of Fodge
to its claims based on Texas Mutual's denial of Texas benefits...............................2
III. Fodge bars Sonic's claims that Texas Mutual improperly denied Texas
benefits ......................................................................................................................5
A. Fodge applies to employers in the same manner it applies to
workers...........................................................................................................5
B. Texas Mutual's obligations to pay Texas benefits are governed
by the Labor Code, and the TWCC determination that no benefits
are due bars all of Sonic's claims .................................................................. 8
C. This Cour is not "bound" by the Fourteenth Cour's erroneous
interpretation of Fodge in its Sonic I mandamus opinion............................
13
D. Sonic relies on additional authorities that fail to support its
contention that Fodge does not apply.. ........................................................14
E. Lundstrom v. USAA and Fire Insurance Exchange v. Sullvan are
analogous .................................................................................................... .16
Conclusion and Prayer................ ..................... ........................... .................... ............. ......17
Certificate of Service........................ ......... ....... ..................... ...... ..................................... ..19
Appendix ... ... ..... ... ... ..... .......... ....... ..... ........ ........ .... ... ... .... ...... ... ..... ...... ... ......... ............. ... ..20
11
INDEX OF AUTHORITIES
Cases: Page(s):
American Motorists Insurance Co. v. Fodge,
63 S.W.3d 801 (Tex. 2001).........................................................................1, 5,9, 11
Bland Ind. Sch. Dist. v. Blue,
34 S.W.3d 547 (Tex. 2000).....................................................................................10
Bone v Utica Nat'l Ins. Co.,
No. 02-02-00209-CV, 2003 WL 21810944
(Tex. App. - Fort Worth Aug. 7, 2003, pet. denied) ................................................7
Center for Heath Care Svcs. v. Quintanila,
121 S.W.3d 733 (Tex. 2003).....................................................................................4
City of Houston v. Jackson,
192 S.W.3d 764 (Tex. 2006)...................................................................................14
Curlee Mfg. Co., Inc. v. Charter Oak Fire Ins. Co.,
No. B14-92-01298-CV, 1994 WL 222215
(Tex. App. - Houston (14th Dist.) May 26, 1994, writ denied) .............................14
Fire Ins. Exchange v. Sullvan,
192 S.W.3d 99 (Tex. App. - Houston (14th Dist.) 2006, pet. denied) ....................16
Guilbot v. Estate of Gonzales & Vallejo,
267 S.W.3d 556 (Tex. App. - Houston (14th Dist.) 2008, pet. granted)................. 13
Howell v. Texas Workers' Compensation Comm 'n,
143 S.W.3d 416 (Tex. App. - Austin 2004, pet. denied) .........................................7
Hughes Wood Products, Inc. v. Wagner,
18 S.W.3d 202 (Tex. 2000).....................................................................................16
In re Texas Mutual Ins. Co.,
157 S.W.3d 75 (Tex. App. - Austin 2004, orig. proceeding)...............................6, 7
Lundstrom v. United Services Auto Ass 'n,
192 S.W.3d 78(Tex. App. - Houston (14th Dist.) 2006, pet. denied) ....................16
11
Sonic Systems Int '1, Inc. v. Croix,
278 S.W.3d 377 (Tex. App. - Houston (14th Dist.) 2008, pet. fied) ......... 1-4, 6, 10
Texas Mutual Insurance Co. v. Eckerd Corp.,
162 S.W.3d 261 (Tex. App. - Austin 2005, pet. denied) .........................................7
Texas Mutual Insurance Co. v. Ruttiger,
265 S.W.3d 651 (Tex. App. - Houston (1st Dist.) 2008, pet. filed) .......................15
Texas Mutual Insurance Co. v. Sonic Systems Int'l, Inc.,
214 S.W.3d 469 (Tex. App. - Houston (1 st Dist.) 2006, pet. denied) ..............10, 14
Wingfoot Enterprises v. Alvarado,
111 S.W.3d 134 (Tex. 2003)...................................................................................15
Statutes:
TEX. R. ApP. PROC.
§ 53.1 ........................................................................................................................4
TEX. LABOR CODE
§ 406.075(a) ..............................................................................................................9
§ 409.009...................................................................................................................8
Other Authorities:
BLACK'S LAW DICTIONARY (Abridged 7th ed. 2000) ..........................................................3
iv
I. Summary of Reply
The parties agree that this case turn on whether American Motorists Insurance
Co. v. Fodge, 63 S.W.3d 801 (Tex. 2002) ("Fodge") precludes Sonic's contractual and
extra-contractual claims. See Sonic Br. on Merits at 1 (stating "(t)his appeal tus on one
question: Does (Fodge) bar (Sonic) from bringing its contractual and extra-contractual
claims under its insurance policy against (Texas Mutual)?").
Fodge holds that a cour cannot "award damages for a denial in payment of
compensation benefits without a determination by the (Texas Workers' Compensation
Commssion) that such benefits were due." 63 S.W.3d at 804. Fodge applies here
because the Commssion ("TWCC") has held no benefits are due Sonic's employee Mr.
Cochran and no reimbursement is due Sonic for payment of benefits to Cochran. This
TWCC holding that no benefits are due precludes all of Sonic's claims based on Texas
Mutual's denial of Texas workers' compensation benefits, and those are the only claims
on which the Foureenth Cour of Appeals reversed summary judgment for Texas MutuaL.
Sonic incorrectly asserts that its damage claims are unelated to Texas Mutual's
denial of Texas benefits and the TWCC's holding that no Texas benefits are due. The
Foureenth Court held Sonic waived all claims except those based on Texas Mutual's
"denial of Cochran's Texas workers' compensation claim." Sonic Systems Intl, Inc. v.
Croix, 278 S.W.3d 377,384 (Tex. App.-Houston (14th Dist.) 2008, pet. filed). ("Sonic II").
Sonic also incorrectly asserts that Fodge does not apply because Sonic is an
employer. The Austin and Fourteenth Cours agree that Fodge applies to employers and
employees alike. No cour has concluded to the contrary.
1
II. Sonic has waived all appeal points except for the applicabilty of Fodge to its
claims based on Texas Mutual's denial of Texas benefits.
Sonic's Brief on the Merits attempts to make ths case about claims Sonic has
waived and on which the court of appeals affirmed summary judgment for Texas MutuaL.
Sonic has not appealed the Fourteenth Cour's decision and cannot ignore its holdings.
On pages 4 and 5 of its Brief, Sonic erroneously suggests its curent claims before
this Court are actions against Texas Mutual for failure to pay under the Other States
Endorsement part of its Policy and for negligent underwriting. Sonic alleges:
· "Because Cochran was covered by the 'Other States Endorsement' on
Sonic's workers comp policy, Sonic anticipated that TMI would begin
payments to Cochran under the policy."
· "Sonic sued TMI breach of contract in refusing to provide the coverage that
Sonic was entitled to under the policy's 'Other States Endorsement.'"
· "Sonic also claimed that TMI was negligent in failing to provide
underwriting ..."
Sonic Br. on Merits at 4, 5 (record citations omitted).
The Foureenth Cour explained that appellate review of the distrct cour's
summary judgment as to the Other States Endorsement or possible claims of negligent
underwriting was precluded because Sonic had not appealed these issues:
On appeal, Sonic assails only the portion of TMl s motion for sumary
judgment contending that Fodge precludes Sonic's contractual and extra-
contractual causes of action to the extent they are based on TMl's denial of
Cochran's Texas workers' compensation claim."
Sonic 11,278 S.W.3d at 384 (emphasis added).
2
The court below held: "Sonic presents no argument attckig the portion of
TMls motion challenging Sonic's (claims) ... based on TMls refusal to reimburse Sonic
for benefits it was required to pay under the Alabama Act." Id. The only par of the
Policy under which Texas Mutual could have had an obligation to reimburse Sonic for
benefits owed under the Alabama Act was the Other States Endorsement. The Other
States Endorsement provided reimbursement coverage for employer liabilty under other
states' workers' compensation systems if the employer was engaged in temporar
operations in those states and the worker sought and received benefits under those other
state systems. CR V:1288-89.1
The court fuer held: "Sonic does not controvert TMl s suggestion that all
contractual and extra-contractual causes of action are based on TMls denial of Cochran's
Texas claim or refusal to reimburse Sonic for benefits it was required to pay under the
Alabama act." Id. This holding precludes Sonic from now claiming it has a separate,
viable claim against Texas Mutual for negligent underwriting.2
1 The trial cour correctly granted Texas Mutual sumar judgment for claims based on the Other States
Endorsement. That Endorsement permtted reimbursement only for "temporar operations," which the
Policy defined to exclude operations performed at a permanent location or pursuat to a contract. CR
V:L290. Sonic's Alabama operations, which were performed at a permanent location pursuant to a
written contract, fell withi both exclusions. CR V:1265-67; 1269; 1386-87; 1441; 1483-84.
2 Underwriting is the "act of assumng a risk by insurg it." BLACK'S LAW DICTIONARY (Abridged 7th
ed. 2000). Sonic has never articulated how its claim of negligent underwriting might be distinct from its
other negligence claims against Texas Mutual, which are explicitly based on Texas Mutul's denial of
coverage under the policy. See CR V:1255-56. Sonic does not appear to claim Texas Mutual selected the
wrong policy for Sonic - that is the claim Sonic made against the Croix Defendants. As the Croix
Defendants' sumar judgment evidence shows, all communcations regarding the type of insurance
Sonic needed were with the Croix Defendants. See Sonic II, 278 S.W.3d at 389-96. The cour of appeals
rejected Sonic's claims that it had raised a fact issue on its claim that the Croix Defendants failed
to procure the right type of insurance. ¡d. Sonic has not appealed that ruling.
3
Based on these waiver holdings, the Foureenth Court affirmed sumary judgment
for Texas Mutual with respect to all claims that were not based on Texas Mutual's denial
of the Texas workers' compensation claim: "We affirm the portions of the judgment
ordering that Sonic take nothng on all its contractual and extra-contractual causes of
action to the extent they are not based on TMls denial of the Texas workers'
compensation claim." Id. at 396. Sonic has not appealed that ruling.
Sonic's claims that are not based on Texas Mutual's denial of Texas benefits
cannot be a basis for affirg the Foureenth Cour's reversal, which was limited to
disposition of Sonic's claims based on Texas Mutual's denial of Texas benefits. The
cour made this plain in setting out its judgment: "We reverse the portions of the
judgment ordering that Sonic take nothg on all its contractual and extra-contractual
causes of action againt TMI to the extent they are based on TMls denial of Cochran's
claim for Texas workers' compensation benefits." Id. at 396 (emphasis added).
This Cour should reject Sonic's attempts to mischaracterize the Fodge ruling as
based on claims the Foureenth Cour held Sonic waived. Having failed to appeal the
Foureenth Cour's affirance of summary judgment as to these purorted causes of
action, Sonic is bound by that affirmance. See Center for Health Care Svcs. v.
Quintanila, 121 S.W.3d 733, 735 (Tex. 2003) ("A party who seeks to alter the court of
appeals' judgment must file a petition for review."); TEX. R. APP. PROC. 53.1.
4
III. Fodge bars Sonic's claims that Texas Mutual improperly denied Texas
benefits.
A. Fodge applies to employers in the same manner it applies to workers.
Fodge precludes suits based on an alleged wrongful denial of Texas benefits
because the issue of "entitlement to the contested benefits" is "a matter withn the
(TWCC's) exclusive jurisdiction." 63 S.W.3d at 804. A claim is "made no more viable
simply by restating it under the other legal theories (Fodge) asserted - negligence, fraud,
and statutory violations." Id.
Thus, Fodge holds that a suit based on the alleged wrongful denial of Texas
workers' compensation benefits is barred - no matter how the claims are packaged -
uness the TWCC has held those benefits are due. Fodge makes no distinction between
workers and employers: "(J)ust as a cour cannot award compensation benefits, except
on appeal from a Commssion ruling, neither can it award damages for a denial in
payment of compensation benefits without a determnation by the Commssion that such
benefits were due." Id.
Before filing its Brief on the Merits, Sonic never contested that the requirements
of Fodge apply to employers as well as workers. Sonic now, however, not only argues
Fodge is inapplicable to employers, it asserts: "There is no statute or case law supporting
TMI's position that Fodge applies to employers." Sonic Br. on Merits at 18. Sonic is
mistaken.
Every appellate opinion that has addressed whether Fodge applies to employers
has found that it does. The Austin Court of Appeals applied Fodge to an employer's suit
5
against Texas Mutual for Texas Mutual's denial of Texas benefits. In re Texas Mutual
Ins. Co., 157 S.W.3d 75, 79-81 (Tex. App.-Austin 2004, orig. proceeding) (applying the
principles in Fodge to an employer's breach-of-contract and negligence claims against
the carrer). The Foureenth Court in this case similarly recognized that "when
applicable, Fodge would preclude a cause of action whether the plaintiff is the employee
or employer." Sonic II, 278 S.W.3d at 387.
Sonic does not address the conclusion of the cour below that Fodge applies to
employers.
Sonic attempts to distinguish In re Texas Mutual, 157 S.W.3d at 79-81 by arguing
that Sonic is no longer seekig reimbursement for benefits paid to Cochran but is,
instead, suing for liabilty under the Alabama judgment. Br. on Merits at 32. This
arguent, which concedes that the TWCC decision bars Sonic's request for
reimbursement of the $78,000 it paid to Cochran before the Alabama judgment was
entered, does not help Sonic, for at least two reasons.
First, the arguent effectively concedes that Fodge applies to employers. If
Sonic's $78,000 reimbursement claim is barred, it is barred because the TWCC has held
no Texas benefits are due Sonic under Texas Mutual's Policy.
Second, the Foureenth Court has held that the only claims Sonic preserved on
appeal are claims based on an allegedly wrongful denial of Texas benefits. Sonic's
claims based on Alabama benefits are barred. The only par of Texas Mutual's policy
that could have made Texas Mutual subject to liability for denyig Alabama benefits is
the Other States Endorsement. The Fourteenth Cour held Sonic waived those claims,
6
and Sonic has not appealed that holding. Having waived any contract or extra-
contractual action based on the Other States Endorsement, Sonic has waived any claims
based on Texas Mutual's refusal to pay Alabama benefits.
Sonic's argument that Fodge applies only to injured workers is unsupported by
any authority. Sonic cites a litany of cases applyig Fodge to workers who failed to
exhaust their administrative remedies. Sonic Br. on Merits at 28-31. None of these
cases, however, suggests that the requirements of Fodge do not apply to others.
In fact, cours have applied Fodge not only to an employer in In re Texas Mutual,
157 S.W.3d at 79, but also to health care providers and even to a carer. See Bone v.
Utica Natl Ins. Co., No. 02-02-00209-CV, 2003 WL 21810944 at *4 (Tex. App.-Fort
Wort Aug. 7,2003, pet. denied) (not designated for publication) (relying on Fodge and
holding that doctors could not sue carrer either for payment of medical bils or on extra-
contractual claims because they had failed to pursue admnistrative remedies at the
TWCC); Howell v. Texas Workers' Compensation Comm 'n, 143 S.W.3d 416, 438 (Tex.
App.-Austin 2004, pet. denied) (relying on Fodge and holding that chiopractic clinc
could not sue over nonpayment of bils without first exhausting admnistrative remedies
at the TWCC); Texas Mutual Ins. Co. v. Eckerd Corp., 162 S.W.3d 261,264-66, n. 11
(Tex. App.-Austin 2005, pet. denied) (relying on Howell and Bone and holding that
carrer's negligent misrepresentation suit against pharmacies and biling companies was
bared because TWCC had exclusive jurisdiction of medical fee disputes and carrier had
not obtained TWCC determation that fees were not appropriate).
7
Bone and Howell ilustrate that the principles of Fodge apply to any lawsuit based
on a denial of benefits that are withi the TWCC's exclusive jursdiction. The only live
claims Sonic has are those based on a denial of Texas workers' compensation benefits
that might have been payable to Cochran. Those benefits are with the exclusive
jursdiction of the TWCC, and the TWCC has held none are due. Therefore, Sonic has
no viable claims it can pursue against Texas MutuaL.
B. Texas Mutual's obligations to pay Texas benefits are governed by the
Labor Code, and the TWCC determination that no benefits are due
bars all of Sonic's claims.
Sonic's attempt to recast its claims as being unaffected by the TWCC decision
should be rejected. Texas Mutual's denial of Texas benefits under the Policy cannot have
been negligent or otherwise wrongful uness Texas Mutual actually owed Texas benefits
under the Policy. The TWCC has held that Texas Mutual owed no Texas benefits to
Cochran under the Policy and, therefore, owed nothg to Sonic. CR v: 1303, 1313.
Sonic's claim that Texas Mutual wrongly denied Texas benefits is a claim that
Texas Mutual wrongly denied benefits to Cochran, Sonic's employee. Under the Policy,
Texas Mutual pays such benefits directly to the worker or to his health care providers.
See CR V:1278 (Paragraph H.3. of Part One, which states: "We are directly and
primarily liable to any person entitled to the benefits payable by this insurance."). The
Texas Workers' Compensation Act ("Act") expressly provides Sonic with an
admistrative procedure to seek reimbursement from a carrer for Texas workers'
compensation benefits it paid to an injured worker. TEX. LAB. CODE § 409.009. In
rejecting Sonic's reimbursement claim, the TWCC specifically held that Texas Mutual
8
did not owe Cochran any Texas benefits because Cochran had "elected to pursue and
recover compensation under the workers' compensation laws of another jurisdiction."
CR V:1313. Under Labor Code § 406.075(a), "a claimant who elects to pursue workers'
compensation benefits under the laws of another jursdiction and who receives benefits
under such laws is barred from recovering Texas workers' compensation benefits." CR
V:1311. These determnations are fmal and binding on Sonic and, under Fodge, their
effect is to preclude any action based on Texas Mutual's denial of Texas benefits.
Sonic attempts to distinguish Fodge by mischaracterizing the TWCC's decision,
erroneously suggesting the TWCC did not actually rule no benefits were due to Cochran.
Sonic Br. on Merits at 13. Sonic focuses on the TWCC's incidental fmdings that
Cochran's injur was compensable and, but for the election of remedies, would have
been covered under the Act. Sonic Br. on Merits at 13. This argument overlooks the
bottom line, which is the TWCC's holding that "(t)he Carer is not Uablefor benefits and
it is so ordered." CR V:1314 (emphasis added). That holding is precisely the holding
that is controllng under Fodge - i.e., the determation that no "benefits are due."
Fodge, 63 S.W.3d at 804.
Sonic also attempts to distinguish Fodge by arguing that its claims against Texas
Mutual "arise not from the Act, but from the insurance policy." Sonic Br. on Merits at
13. Under the express terms of the Policy, however, Texas Mutual's liability for Texas
benefits is governed by the Act. The Policy provides: "We wil pay promptly when due
the benefits required of you by the workers compensation law." CR V:1277 (Paragraph
9
B of Part One). If Texas Mutual does not owe Texas benefits under the Act, it does not
owe them under the Policy.
Sonic's argument that Fodge is inapplicable because it involved a dismissal for
want of jurisdiction rather than a summar judgment is meritless. Sonic Br. on Merits at
14. "The absence of subject-matter jursdiction may be raised by a plea to the
jursdiction, as well as by other procedural vehicles, such as a motion for summary
judgment." Bland Ind. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Fodge
applies here regardless of whether Texas Mutual raised it in a summary judgment motion
or in a plea to the jurisdiction.
Sonic also incorrectly asserts that the cour below held that "ths case is not like
Fodge." Sonic Br. on the Merits at 14. The Fourteenth Cour made no such holding in
this case. To the contrary, the cour expressly acknowledged that, under Fodge, there can
be no "viable cause of action for damages stemmng from refusal to pay workers'
compensation benefits absent the TWCC's determation that such benefits were due."
Sonic II, 278 S.W.3d at 387. The cour also acknowledged that Fodge applies to
employers as well as to employees. Id. The sole reason the court ariculated for not
applying Fodge as a bar to Sonic's claims was its erroneous conclusion that "we are
bound by ths cour's previous opinon in Sonic I." Id. referencing Texas Mutual Ins. Co.
v. Sonic Systems, Intl, Inc., 214 S.W.3d 469,481 (Tex. App.-Houston (1st Dist.) 2006,
pet. denied) ("Sonic I"). That is not a holding that "ths case is not like Fodge" but,
instead, an implicit acknowledgement that - but for the statements in its earlier opinion -
the cour would have applied Fodge to bar Sonic's claims.
10
Sonic's attempts to distinguish Fodge on irelevant factual differences between
Sonic's case and that of Ms. Fodge similarly faiL. First, Sonic argues that its claims "are
not based on the Act, but are based in contract law and in tort common law." Sonic Br.
on Merits at 15. As previously shown, Texas Mutual's contractual obligations under the
Policy are the same as its obligations under the Act: if it does not owe benefits under the
Act, it has not breached the contract in refusing to pay benefits. Further, Fodge explicitly
rejected the argument that a party could avoid the requirement of the TWCC
determnation by restating its claims "under the other legal theories." 63 S.W.3d at 804.
The TWCC determined Texas Mutual was not required to pay anything either to
Cochran or to Sonic under the Labor Code. CR V:1314. The TWCC Appeals Panel
affirmed the hearng officer, holding that Sonic "is not entitled to reimbursement of any
Texas workers' compensation and medical benefits, as none are due." CR V:1303
(emphasis added). Therefore, Texas Mutual did not breach the contract in refusing to pay
Texas benefits to Mr. Cochran or to reimburse Sonic for payments Sonic had made.
Sonic next argues that its case is materially different from that of Ms. Fodge
because Ms. Fodge failed to present her medical care claim to the TWCC and Sonic
"properly presented" its claim to the TWCC. Sonic Br. on Merits at 15-16. Sonic
overlooks the fact that Sonic lost at the TWCC, which held no benefits were due to either
Cochran or Sonic. CR V: 1313. A party cannot sue for wrongful denial of benefits after
the TWCC has determined the benefits were not due. Fodge requires the party to win at
the TWCC. Getting a losing TWCC decision is not enough. Sonic's suggestion that it
won relevant issues at the TWCC is also fudamentally misconceived. The TWCC did
11
not, as Sonic asserts, determne that Cochran's claim "was covered by the policy, and that
he was entitled to benefits under the Act." Sonic Br. on Merits at 16. The TWCC's
findings on compensability would have provided a basis for Cochran to receive Texas
benefits but its additional finding that Cochran elected to take the Alabama benefits
resulted in a complete bar to recovery of any benefits under the Act. CR V: 1303.
Sonic's attempt to render the TWCC's decision irrelevant because the TWCC did
not adjudicate all of Sonic's claims also fails. Sonic Br. on Merits at 16. The TWCC
determed Texas Mutual's liabilty under Part One of the Policy, which addresses Texas
Mutual's obligations to pay benefits under the Texas Labor Code. As the Appeals Panel
stated, "Our jursdiction is limited to consideration of issues relating to Texas workers'
compensation benefits and any entitlement to reimbursement thereof." CR V:
1302-03.
Under Fodge, the determnation that no Texas benefits are due precludes any suit based
on Texas Mutual's refusal to pay Texas benefits, includig contract, tort, and any other
extra-contractual claims.
The TWCC did not adjudicate Sonic's rights under the Other States Endorsement
because it properly found that was "a question for another jursdiction." CR V:1303.
The tral cour, which did have jurisdiction over claims based on the Other States
Endorsement, correctly granted Texas Mutual summar judgment as to claims based on
that part of the Policy, and Sonic has failed to challenge that ruling on appeal, either in
the court of appeals or in ths Cour.
12
C. This Court is not "bound" by the Fourteenth Court's erroneous
interpretation of Fodge in its Sonic I mandamus opinion.
Sonic argues that the Foureenth Cour's statement that it was "bound" by its
earlier opinon in the mandamus case was not a reference to the doctrne of Law of the
Case but, instead, simply a statement that the court would follow its own precedent.
Sonic Br. on Merits at 18. Sonic then attempts to defend the court's statement by citing
to a strng of cases in which cours have indicated they were "bound" by their own
precedent. Law of the Case is a subset of precedent that arses withn the same case
because the case has previously been before the appellate cours. Cf, Guilbot v. Estate of
Gaonzales & Vallejo, 267 S.W.3d 556, 560 n. 1 (Tex. App.- Houston (14th Dist.) 2008,
pet. granted) (recognizing that law of the case is a subset of precedent that applies to
unpublished Fifth Circuit opinons that would otherwise not be precedential). Therefore,
in arguing that the Foureenth Cour merely intended to apply "precedent," Sonic has
effectively conceded that the cour was using the doctrne of Law of the Case in
considering itself "bound" by its earlier decision.
For the reasons previously stated in Texas Mutual's Initial Brief On the Merits at
21-25 - to which Sonic makes no .substantive response3 - the Foureenth Cour's
statements in its mandamus opinon in Sonic I are not binding on the cour below and are
in particular not binding on this Cour. Erroneous holdings by lower appellate cours
never "bind" the Supreme Cour. See, e.g., City of Houston v. Jackson, 192 S.W.3d 764,
3 Sonic does not discuss a single case Texas Mutul cites on these pages but merely argues Law of the
Case is not at issue here.
13
769 (Tex. 2006) ("(T)he 'law of the case' doctre in no way prevents this Cour from
considering legal questions that are properly before us for the first time.").
Whether the statements in Sonic I are dicta or holdings, ths Court can and should
reject them because they are wrong. Sonic Fs suggestion that TWCC's findigs that
"Cochran was Sonic's employee" and "suffered the compensable injury" rendered
unecessary a determination that benefits were due, 214 S.W.3d at 481, conflicts with
Fodge, which requires such a determation.
D. Sonic relies on additional authorities that fail to support its contention
that Fodge does not apply.
In addition to relying on Sonic I, Sonic relies on four cases - Curlee Mfg.,
Ruttiger, Wingfoot, and Hughes - as support for its argument that Fodge does not bar its
suit against Texas MutuaL. See Sonic Br. on Merits at 16-18. None supports Sonic's
position.
Texas Mutual explained in its Brief on the Merits why Sonic's reliance on Curlee
Mfg. Co., Inc. v. Charter Oak Fire Ins. Co., No. B14-92-01298-CV, 1994 WL 222215 at
*4 (Tex. App.-Houston (14th Dist.) May 26, 1994, wrt denied) (not designated for
publication), was misplaced. Texas Mutual Br. on Merits at 16-17. Curlee was a pre-
1989 Act decision involving a challenge to a medical benefits settlement that could not
occur under today's Labor Code, which prohibits lump sum settlements of medical
benefits. See id. In addition, the carrer ultimately prevailed on remand, where it had the
opportty to place the policy in evidence and establish that - as is true here - the policy
limited the carer's liability to what was owed under the Workers' Compensation Act.
14
See id. Sonic's Policy is already in evidence in ths summary judgment record, and it
establishes Texas Mutual properly refused to pay benefits because no benefits were owed
under the Act.
Sonic does not respond to any of these arguments but neverteless continues to
cite this unpublished decision as its main authority. See Sonic Br. on Merits at 15-18,22-
23,26-27.
Sonic's reliance on Texas Mutual Insurance Co. v. Ruttiger, 265 S.W.3d 651 (Tex.
App.-Houston (1 st Dist.) 2008, pet. filed) (cited at pages 17, 22, 25, 26 and 27 of Sonic
Br. on Merits), is equally misplaced. Texas Mutual explained in its Brief on the Merits
why Ruttiger is irrelevant. Texas Mutual Br. on Merits at 18-19. In Ruttiger, the cour
held Mr. Ruttiger could sue the carer for bad faith delay in receipt of benefits because
the carrer entered into a Benefit Dispute Agreement that established benefits were due
and the carrer paid those benefits. Here, Texas Mutual has refused to pay any benefits,
and the TWCC has held it properly refused because no benefits were due.
Sonic does not respond to any of these arguments.
Finally, Sonic cites two cases that generally describe the puroses of
the Workers'
Compensation Act and argues that "(n)othig in Wingfoot Enterprises or Hughes Wood
Products supports TMls position that Sonic's claims are governed by the Act." Sonic
Br. on Merits at 17. Texas Mutual has never argued that these cases have anything to do
with this case. In fact, they do not. Wingfoot involved a worker's suit against his
employer in which the Cour held the Act bared the suit. Wingfoot Enterprises v.
Alvarado, 111 S.W.3d 134, 149 (Tex. 2003). Hughes, which involved a worker's suit
15
against his employer and questions of employer immunty under the Louisiana workers'
compensation laws, is not even remotely relevant here. Hughes Wood Products, Inc. v.
Wagner, 18 S.W.3d 202 (Tex. 2000).
E. Lundstrom v. USAA and Fire Insurance Exchange v. Sullivan are
analogous.
In its Brief on the Merits, Texas Mutual properly analogized this case to holdigs
in Lundstrom v. United Services Auto. Ass 'n, 192 S.W.3d 78, 96-97 (Tex. App.-
Houston (14th Dist.) 2006, pet. denied), and Fire Ins. Exchange v. Sullvan, 192 S.W.3d
99, 108 (Tex. App.-Houston (14th Dist.) 2006, pet. denied). Texas Mutual Br. on Merits
at 16. These two cases involved suits by insureds against their carrers complaining
about carrier denials of claims made under the policies. Lundstrom and Fire Insurance
Exchange involved homeowners' policies, not workers' compensation policies, and are
therefore not governed by Fodge and the TWCC jursdictional issues Fodge addresses.
They are, nevertheless, analogous because they both hold that a carer is not liable for
extra-contractual claims when the carer is not liable under the terms of the policy.
Those are the facts here as welL.
If Texas Mutual does not owe benefits under Part One of the Policy - and the
TWCC has held it does not - Sonic also has no extra-contractual claims based on Texas
Mutual's denial of those benefits. Fodge, Lundstrom, and Fire Insurance Exchange all
support the proposition that repackaging of the claims under different theories does not
make them viable.
16
Sonic attempts to distinguish Lundstrom and Fire Insurance Exchange by arguing
that the TWCC determined "there is coverage in ths case." Sonic Br. on Merits at 34.
Again, Sonic misreads the TWCC decision. The TWCC holding that no benefits are due
is a holding that there is no coverage under the policy.
CONCLUSION AND PRAYER
For the foregoing reasons, Texas Mutual Insurance Company respectfully requests
that the Cour grant this Petition for Review, reverse the judgment of the cour of appeals,
and render judgment affirg the tral court's judgment in all respects. Texas Mutual
submits the error of the court of appeals is so clear that a per curiam opinion is both
appropriate and waranted. Texas Mutual seeks such other and furter relief to which it
may be entitled.
17
Respectfully submitted,
Mar Barrow Nichols
State BarNo. 01831600 .
Mimi Shelton
State Bar No. 18208650
TEXAS MUTUAL INSURNCE COMPANY
6210 E. Hwy. 290
Austin, Texas 78723
Telephone: (512) 224.2723
Facsimile: (512) 224.3353
GRAVES, DOUGHERTY, HEARON & MOODY
A Professional Corporation
401 Congress Avenue, Suite 2200
Austin, Texas 78701
Telephone: (512) 480.5682
Facsimile: (512) 480.5882
By:
ATTORNEYS FOR PETITIONER
TEXAS MUTUAL INSURANCE COMPANY
18
CERTIFICATE OF SERVICE
I hereby certify that a tre and correct copy of the above and foregoing motion
was served to all counsel of record listed below via U.S. First Class Mail on ths the 4th
day of February, 2010.
Attorney for Appellant, Sonic Systems International, Inc.
Robert W. Higgason
Attorney at Law
6700 Woodlands Parkway, Suite 230-247
The Woodlands, Texas 77382
Al Iglesias
The Sprain Law Firm
3700 Montrose Blvd., First Floor
Houston, Texas 77006
Attorney for Appellees Randy Croix and
Eddie Croix Insurance Agency, Inc.
Wilard M. Tinsley
Funderburk & Funderburk
Riviana Building
2777 Allen Parkway, Suite 1000
Houston, Texas 77019
19
APPENDIX
Tab A Pertinent Excerpts From Texas Mutual's Policy
TabB TWCC Hearing Officer's Decision
TabC TWCC Appeals Panel Decision
20
A
(-."==
.1..fm.
.W() COPf~N MI ÊMPLOYB .
UA IHSRAPO
wcooboOô
In rotm to the fRnt af1h. poum an s:ed to.AI 1a of this poey we ag Wf Yó 8$ fol
GENERA SECTON
A. Th Po C. Wod~n~ 1h -kni or
W~ ~do La me
~.;Jof~sa ~t.GI~..in~.
~.:kw øc. ~ ~ ai. Iflft
1l ~lC maud... at it .t4Ø4l dae Ut
'l~Pa. aMd endo_c.an,~""es
IJ 1f. ltlS.CG of ~ ~en yo
(th em lAed 1f r. f of- ti lffa 3A. of :Chc Inloøn Ple. It ~.$ an
P.-el aM us (the ~nomø cm"'~
~) lbe ~ ag~ r~toJh ~ -c~.. ~ __.few wh ~ fA ~'clng
1I. pat;po (t doeinot..1h ~s of
-- .. á1in 1f- poe-. The ~ ef1f Po may
hO 1M ~ (I ~ ax by ~ ,
C$ by UllO be plrt of ~'po. -
ben.fI L
Gl . le th pRe nanoC~"d èlblty
0. Sti
8. Wh I. kfsure:' Stta _. .n .$te_ at' th t,~, S1li af
YOu.ace.~ rf.you.&£ean empr ctamedín.tt Amon -and1h Dmct of Cøuma .
1 of Ch lnot~Of P.CF- It "iltlit . ~ovr ~$ a E. ~..
pa~ an if~ .. OM _oílt'~en¡QG. ~
lC-. bu on li yar CeCl U l1n ~Oyr of Thës PO.1k .ó~ .u. øf yo -9Õ~ .lcst in
tI palÛeM'c enfo . . . It~. t ,ar4 of 1f I~ÛO Pfl am. It CO.1t
cicw ~ m lt 3,A ~. Un yo ltye
w~
Qlh lROo or are. iiélf4lsu fo çøch
. .'. . . - . ... .
PAR ONÈ--WORKERS COMPEN,SATIONINStJNCE
A. . How Th ItnlmiAp. . Ð. . Wo Wi'Mso. f"..
This ~. ~~_Ki~- e~ to We" Y(. ab. pj. em èO. Ù\ e.. ta Obt
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~ lN by la4l or liiiy ~ b\ dcS6UG.
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not~ôf~l\s. ... . .
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2 8~ ~ by dc m~ be au. or -~-for~tå bo ~ up to the
2. fo; ~ bo in. nti-~~.and'
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w.pl..1b 'lIoc du~,~te.~:~
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and . ..' .,
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stlient to èiGn 1I
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ThC5 entNnt ad Tex W~. Coentiqa ~ ~ ot..st'¡ns~imßC~Hq thpo for tepo
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yo in the at.to
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CONFIDENTI
Tu. taborCoe§ .O!.S,l
TEs WO"RKERS' COMPENSATION COMMlSSlON
HEARINGS DIVISION' .
HOUSTON EAST FIELD OFFICE
, HOUSTON, TEXs
REClE1VF0
GAYP. COCHRAN, - MAo 1'2002
ClAMAN § - - 11'WOAK
COUPfHSATlH. CO. MISS.. ON'
§
,,§ - Cl OF PAOCGS
" SONIC SYSTEMS INTERNA110NAl
. -~ -.
SUB-elAMAN §
§ OOCKETNO~. ...
. v.
.§ HE~X152$1'68-o1-eC_HE47 _
§
§
,§,~
,,;. . ': ') TEXS MUTUAl iNSURAÇE CO.,
~-
"CARRIER. §, .
,§
:OECrSION ANtl.Û'Ri)ER
. .. -~ cieiS déced uíîèrlh& Tex Wor~' eoP;nsatiòAcl(lhëAèJ,:-';
-l.r eoe: ann. §410jS1.- - 410.169 (Veman ï996¡Supp. 200fl,ànd: Tex Workers.
Compo 'Comrif"ri, 28 Téx. Adrnln.-Còë:§1,42.t _ '1'42.20(West)~
- . .... .. ... .-.. .. ....
J'i
. - ... -'. .' ..
:. . "STAtEMENT dF-TlE'CÄSE .
ABeneiïeyle~,~ lie/onAí28.2Q6i~~ii~ò( .
.. ",.i .
thê dispuf isueš,.'hòwever lle- parts were unaole' to /eäCh :an agreemènt .A eènefit" ,
COIlte Cae f-éa-_ wa /id on Januai 2"3, 20ri. wiíl_ lh ie,i do on
Fébruar25. 2002, tòdëcd~'the foll~QRdj~ptJted issues: _ _.' .. . _, .
.. ~.-
. 1. . W~ fh~CiSi~¿ii~ for ;'rker' æ~énS~pitj. an
'employee "of Soniç '-Systems. In(emaliøn~li Inc.;_ or ,.80
.4 . . ~... . .. _. '..
-' ',independent eõntractor.aUhe-timeQfthclâimed injtiy
.i
Act? - ,
. - "
\. .... . 2. : "- ,Wasthë cjåîrnan~yihQ,was injured_in Âlabama, erititled'l~,aU
rights t:nd. remedÎes unCler the' TeKas Workers' Compens3Ö0l1
, (, -,_:
.~- . ~
-.
:. =-.-"':~:
00 l 305' . . ~.. .
I.
i J
t ".
.:~~
t'. ;J
CON1ENÌI
Tei Labor.Code §.402.J
... l _
'. .
.. .. - _.
-.- . =:.... -: - -. :-.-~-:.. -:"..-..: ~ ..
.... .. - .." ---
. 3. Did the -EmploySr timely fie notl óf an injuiy in accrdanc
with TEX LABOR CODE § 409.oo5? .
.-
. . 4. Did the. Claimant elect. to pursue a 'remedy and rècver'
. compensation under the. worker' CO~pensation laws of.-
another junsdicton. threby barnng rever under the Texas'
. - Workers' Compensatioñ Act? _ . . _
..:- -. .. -
.~. . .. ,... .. tI. :: Islle Èmpki enlill 10 remburslil of cope.nsti~. . _
.. ...-
. " . ånd medical fJYments frrn the Camer? . _ ':_ _ _ .
. ".: By motin fied on Jànuary'- 1 à. 2002. cårrr i-q~~~t~d tÌåt Issu-e N~mber 5 lisíea.
abo be deleted 900 that fhe follOwing própose issueS be sutistituted for: the såkf Issue
"~Number 5; .' .... -'. _' _
f. .. .. :- - .. '" -J' .. __.. ..
. Ofd Sonic SYstein iritemationaÌ, inc.;init?te bënef paymnts,
.::: - -l--'.-)
";- --
including medica,. benèfits, .; under' ,.the;'- T exås -. 'Wotker". .
Compensafron, Act ("ActW) tp Gary Coran as å result of his _ . . ~" ..
having sustained an.injury on or about Febi:~iy.24~'1997 that _
ë:-rse out of ami ;~:th_ë- course and scope'of emprOYnent wi .
Sonic SYstems lntemåtiooi fhát ~s compensableunaer sad -. '
-reive? - . _ ~, _ said Act
.Act and to which Cdclran was entied under... , to
.
.. ~ ....
.. .. ...
- .. ..;i, ... i&Soille S~¡"':I~i~ ra ~lir d Paymefls ä
. ....., :- made to- 'Gary CaChtan and On his'behaff-uOder the Texas-
o. - .- . : -. "!orkers~ Compensati'n Act, if any, ås. a ~lJt of his injury ¡R
-
.0 . . - . . Alabama on or aboutFeÐ~ 24~ 1i99lti,hinderthe docne '- .
.. "o(res judicata-by-an AlabamR couitjudgmenlmnelê~fagaf(st
- - -. "Some Systems Whob fOUfl4. such :paynents .were.'. mådé . by
- ~ =. ...- '.SOic'.Systems to~cli:ll and åli .his -behâff Úider th.
.. . .:' '.' .. ~bama Workei'~ Còmpensàlion ac amfwfiëh gave- SoAiG.
. . -. . SyStems aÂ-of(setandcredit fQrthamOOtof ~Udi paYments
. -- I
. .. = ..~
- .
. - against Sonic Systeni~ liabillty. to Coi:n 'under the
~.Workers' Compen~ti?ri A~? .. . . .Afa,haa .
.
. :3._ 0'-- ',s;Son;csystemsrntemâtiónaf,.fnc.collateralyëstopperroin
.. _.', ..' .cóòtending that.thë-payments it m~ae to.Gårý èoèhrao and on ~.'
(_.r---.
.. . . ":. . . ..' -." .
his - behalf were .'benefit paýments'måde oÎlderthe t aXas . . -
. ,
-2
au J: 30'ft.
(. fj
-
ÇON.l'IDENTLAL
T ex -LafiOf" Codf' § '(lP-,U
Worker' Compensation Act
when an Alabama štate court had
rendered ajudgmènt against Sonic Systems.
the
Cochran for wòrler' cómpensation benefits underGary in favor of
.Alabama Workers' Compensation Act ås a result of the same
injury and that Alabama court judg~nt contains a fact finding
that the-Sbnic Systems payments~ to Coran at issue were
payment of benefits under the Alabama Workers'
Compensation act for' Whicll Sonic Systems was entitled to
receive a credit for having made? ."
4. Is Sonic Systèiii'S daim for "reibursment" of paymnts it
made to Gary CochfCn ancron his behálf ùn-der. the Tex?s
.Workers' Compensation Act if any, ås a i:esulLofhis injury in
Alabama on Of abot F.eb. -24, 199:7 bared under the dócte
åfelectQnof reedies by .,
Sonic Systems
virt of the faCt that
has previously contend~ in Alåbarna state cort proceepings
'between it and Gary Cocran that Sonic -Stems made such
;~... . ~~. . -payments to Cocluan Çlnd on hi behalf as benef payments
: '..: ..
.,--'- '_-:"'J
."lJnder -the Alabama Workers' Copensation Act and the
- Afa-bama state court has rendered a fina judgment in those
prpceedings grtmüng Sonic Systems' l"equ~t for relief by
, allowing Sonic Systems and:offet or credt in 'the ;amoltnt of
. SUchpaym.eitsagainst Sonic System's.liabil~ to Cocran
r unøer the Alabama Worern' Compensation Aét as' å result ó(
:s;ucl iciry .
-
5. . ;Håa So~ic S~tëm wa~e(f any claim for re~bufem.ertt under
- ~th Texas Workers' Con1pß"sationAcf foranpayments.ltrns
.: -,nidèto or on behalf of GaiCoran as a rnsu 9f enlnIuryJi
~- - Sùstined in Alabama 00. or' abùt. Feb. 24, 1997 by.seeking
:., -and receing an offset and credit. in Ihe amount of SUcll
,payments' for Sonic Systems.' .liabilit to Cora unde the ~
.. . -Albama Workei'_Compensati åètforbenefit underlh~tAet .
. .ås a resu(t of thë same Jriuf)' .
..
. '.
-which. request ~as denied.
t ' :
' ..- - . , .
-
. Cfaimal1f did not apper, however. Jesus Ort ombudsman, attended theJlearng in
.order to assist Claimånl EmproyedSufia1m.anL Sonic :Systems Intema.tiona' Jnc. .
- .:. _. ~~ ~ppeared aad ,was represent-ed by Mike Sprain, attorney. Carriér appeared-and was
....7.-....-~.
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0'.01 307
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CONFIDENTI -_
T = Labor c.dc § ~O_i.¡lJ
r~;;nte by Jeff Bogs. allmey. 11ê ';frerier w~s .~aiYKai fférìiJnck. Als~
present were Greg Anderso and Alvaro Iglesias. - _ _' .
,-II- ~
. ... - - EVIDENCE.PRESENTEO.
. Witnesses~ The follewingwitnesse testified: : .
..
.. -
For ErrployerISub-aimant
1.. . Greg An~~on : _
. '- - . .
ForCarñer; .' "'.
.. -.-
.
1. None ". .' '.' ._.... '.
. .. ~ .. ..:~. '.
'. :.. ..:: ':...-.. "-" ".. .-
. .' ËxhJbi~. Thefollowiiig exhibit were adrpited unessól.èlWlSe nated:..~"", .
r . I.D' Fôeag Of~. . . .... - :~.. c '~:;~.~!;'? _. \.; .'.. :~.~::::. :~: .:;:: ;'.. '.
.. ..:- -- ,- .. .. -. ........ -:.- ......... _.. ..
1. Beñefi Review Coilfuren Report- . .' .
2. Insurance Carrer Intrmatin · .. .,. .' _ '. .'.: :". .._. .'
. "...:.
: . - 5.
. 4.
'3.
'lWCC41
. .TWCC2~' '.- . :.
CommlssrOn!s ;"S~OW 'Ca~se. letter-&: Claimånts R~pOn~ .
:' ...
. -' FQf'Emp'oyedSdtialmailt..
."".. ".. :.. .." : :- .... ~ -: .. :.. :' .. : ~ .- .
.. ... ~ - . .."
:-..~.., '
:t'; '. . PoRCy 'offn$Ufcce- ~'. '. . . .:. . . . ~. '. . . ". '. .I .. '". ..
- . ..' 2. - . TWcç 1;6./97' ..-.:~ .. . . . .' , . ..
3. TWGC'1;'8t3f97.. . .' _
. - :' 4. TWce:~1" ._~ " "'-', . '.'
. . .; '. :$. rwcc 2; 61219:7 . . .' . _."
. . . 2"1113/01' - .
'. -.- ': .6. mec.' . - :. '. _. :,
'. . 7. Mêdicaf Records; West Meiñ'~Med. Ceter _' _. .
. a Fax cPver Sheets fr0aimant to Sonic Systems. _ _... ;_ ..
-:R Médical Records; Soutlem Bone. & J~int '" '._':
. -1'R '.' Texas'
Workorce
Cominssion-Rêtords_ _:'
'. . 1:1.' CoiTesporiij~nce; lS¡lesias foLìtfe '-'-:'. .:_'_
'"::.:~~ . -12~ Corre.spondence;-Igkiasto Whitaker.- _ ...- ': .: ".
(: .
. 'ý':-~'.
. ..
4
':00 l 30e;
,
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-...
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t=~
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CONFEl'iTlA _
Tcr UbrCode§401.Ø8
13. Pritout. of Payments. Made to Cfaiman.l
14, Recrded Statement; Gary Cochran
15. Deposition; Gary Coran
. 16. DeposItion; Nita Wìnsfett
17, Rnal Judgment
18, Printout of Payments Made to
19. Çlaimant 91719!
Trial Transcrpt
2R friterrogatory Answrs from Cárnsr
ForCanier.
.
1'.
- -
Depositon ~of RandaU'Lynn S;;nford
2. "Depositon of Randall Lynn Sanfo.lÚ .
3. . Deposition otRandafl Lynn SaofOfd
4.. .Oeposifiori. of Emiy James Aston
5~ Witness Statement; Gæy Cochran
.6~ OepoSition of Nlt:Winslet .
. -. 7~ Alabama Judgmént; CofCn vo. Sonic Systems
r--.,/ ,,:) 8. Exçetpt; Ali:bama.. Tax Co. (EXCLUDED)
'. - .' 9. Oepositionof Gaiy Coëhran .
10~ ~otin To C6iTectllRC Report
11. Answer To Camplaint(EXGLUDED)
-. ~ . . -. ~. .. _.
STATEMENTt?F THE.EVIDENCE: .
, ' .. " lléeVidenee essled lIa! C1aint. a nu plai¡¡; ll k,Sj , ' ' ,
tesin'.io the St.te of Alabama, was workng' al.fle FaiJey, ~afåll:¡i ñtläear"fa 00
. : lTbfU:aiy 24, 1.97,_ whèn-h~ was.lllure l1f.'aJehgth ()t i.? inch. piP.. Theèvleø .
. . tarlereØtabl~nedt.at Employe;proviOO(l (ti~drt~éiiÇe.t():th~FâffeY'P(a't1tduiig . .
.' sçhødOled shutdows in th. Fair-afl Sprióg of 1.99S-U1rough 1~7..,eaëIr.pf whch.
. . .sfutØÐws.nQrmailyJastec;Hi_8 .weeks; that~åina~t.há~' Wói.~ tOE- çmployetaHfle,
.i=afey Plant .drl9i several š~utd()wnsprior to~ the nátêòff~ and tlÇil ¡'õór to eacf
" , ,SÚêl Job.' Emper CO!acl ClaianllQ dètÎl \\Ei lk waav~able :aid. if
¡. CJaimántwas available and.wiflngdtowotk he:WQUl(fbe..etlqred.å.~'ân inspeçor.afld
. . ~sigfled tath Farfèy 'Plant duting the shutdoWÍ~ At fhe eod~ of
", (;nf wàs teiinaled by
the- tH .week iob,' .
Emayer aiidi.s fr 10 iI ana direced his .work
employer.withheld federaUnêOme taes ffm t;air-R.ts wageailer ei$neni.
(, . .l _ _
. '( r-
. - genercffy although lté. testimony indicated .that ai. de(ails QfClaillt's worf in a
.' ...~. -
.puCfar plant were overseen by various rept~låtives of nuinUs'feglatory_
i. .
~ ..
5
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. 00 l 30..e:
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CONFENTI4~
. 'r=.4borC?de~.(oi.8J .
agancies. Itlurthèr appears th~t tlåimarit had, on at least oöe occasion: 'ieèeived _ _ '
unemjloyment benefits duñng the period between plant shutdowns: Employets faifute
- to withhold state income taxes as required by Alabama Ja~ from payChecks it issued to
, Claimant and the fact that Claimant;in his recorded statement. refen:ó to himself as "a
-- -- . contctot' are not dispos~tive. aåimart was dearly
.-
!he employee of Sonic Systems.
- At aii times pertinent to the lssuès in this case,
Qaimant was a resident of fue
State of Nabama and Employer maintaiñed its off and'principal place of business- iI
Houston, Texas. The evidence established tlat Claimant was reçr(ed ånø, after __ _ _
.-
- -- .~ployèr vered that Claimant's certfications and securi, clearances were current. '.
- . and perfoimed required background cheCks, was. hired by and from. Sonic,System~s _
. ,Ho_uston oJfiees. SeGio~ 406.071 of the At?t provides.fhat,añ employee workng in ._ . .
- another jûrisdicton.is .entil;ed to aU: rights arid remediês under -the.
Act if has'signifrcnf
. - would be campen~abfe if it occrrecl in this state;_ arid (2) the employee (1J.tle inja.r. .
.cntact with this slate. Subsection (b) goes on to provide that the significat conta _
test is met if the' employee was hirea'or recritep in tis' stae- and 'R injre not later
.- - tlan one- year follOWng' the .date of hire. Th~- is no dispute Ü!at the iJlj~iy wóu(d have __ _
°t: ) . - been compensable had it occrred .in Tekas.-and ~e evence ~åblished that Claimant. 0 _ .'
:" wãs "hired and/or récrited in Houston, Texas: He: was hired in early Februåiy, 1997..' . :_.
and was ínjured-Iess than,oneyearfoflôwing'su.date.-:-:_:-:-" - _ .- "-_.' =:=. _:_ . :-,'
-: : -- s~cln~9.Q05 (j~ ihe~oo; Coe and R~le-1~~:Ò~~~vi~e ~ai ~~- ~~njrei -. ---
sJ;alli:epö~ to the cånier-U. a work r~lated inJuiy results in the absence of the employ
frm work for more than: one- day and that Stef report shan be filed not later than fte
: - eighth day- following. an employee's àb~ence from work for fuör~ than one day, due to an
. 'inury. The evidooce:established tht Claimant fit. began missing tini~: f;am wqf. as (f'
. -r:esuft of hi$ irtJtiiy on ~4t1é 3, 1997:l1e lWCC f is dated Jûne 6, .19Q.7 '.~' . ~;.- -, ~ ,
. . Em¡øyets. WimessleSedlhatsuPh reprt was niiledto Carr owtlt ssi~fda¥ or .
. :le~neXtAlthøugh.qgrñ~ i~icates'(Jn lts "rC£2.1 fhat.notceY'ås.t~ed.~;~Q(e.".
. . 23, j 991','suchdatê 'appears (o..bè Uie date~upoQ wbiçl Caer reooeq'à. cop~,.ØfØ~' .. '
.' . -.' .Sèn~ TWeC':1 ~nlåning dulfcate i~fÇ)~lin ~t compfeted on Carr~s 1éfeÇaú- .: _.
. Joim wlch it provided Emp!óyer after hsvinij reæed nolice of Claimar.fs ;injury~ ....._
. : - . '. ,; is'oøf dìsputß(flhat GfáJfant pu";.ef and reçove;~ ,;~.rkrsloêó~p~~afìÒfl . -.' ,
. . tie-oeli under thé.laws :of ta~ :$täte ot Al6afÍa. - Carter urges th~t Cfaimant'eleêteø to..
recoverberièfits in °anolherlunfjd;cIon and is, for-suc reason, ~arred:fr.recóenoo.-"
. :worker' compensation benefitS under the Act Employer insists that- Claimant made no .
. -such_ electon;lhat: hè lhitiaUy fied his daim ifl T ~~' ~nd ptoseeuêd. the. same. (Jnm the
: , . Cãirer advised him that. because-he '~as .fofa _reident qf rex~ 2riCl-wäs injut-eefln'
--. --/- -Alabama. he was noteovered by the TexasWorkers~ Comper:sation-Acf.!heevider~
f 0"-'-: .
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,
,
,r~
COÑTIDENTIAL
T a.12bor Code § .cO!.-
revèaled that Employer begàn maldng ~payments tå Claimant approximately three
months afer Claimant began losing time from \york due to his injury, whích paynénts,
òstensibly, were a gooo win effort to assist Oaimant lJntif h(s daim Was accpted by
Carrier. It furter appears that Cfaimant waited almost two years, until his right (0 bñng
~uit in Alabama Jor compensafion benefits. was ,threaened by fim,itations. before -
pursuing benefits under-the laws oftfiatjuriiCton. Claimant, in a signed statement
tied after the' hearing and in r:esponse the. Commission's -10 day shoW cåuse fetter"
generated as a result ofClaimáiit's failorê to attend-.te CCH,statès that hefied a
.claim .inAlabama onry after his Texs claim was dénieØ-by'the.Carrer, that the Camer
tqld lJim that he had no-dairh.in Texas; that he waitèd tw years for his Texas claim to
°be htlndled property; that only when the -staMe of Rniitafions wa~ about to expire in
'Älabama did he file a claim for wo~' compensation benfits in-that iutisdictono; and
that he did not måke a -"knoWing electon- but flIed in Arahama becaus!3 he beliaveá°he
. "had no alternative. - .
."
. Even.though aU ofthè evidence presented'Wcs'not díSCUSS~d. it was considere:
The-Rnrfings of FaGt.an Concl~iåfls.of I,w-are based'onati of th e~iaence préselied.
,-
ATTORNEY fEES
.EmployerISub-Glaimant andoCanierwere representeäby attòmeys?( thé heanng,.
;'. .. . for . ." "
- --! Separate-otders.. attorney feeso maybe issu8Ø. -,
i -' _
.' ._.
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'CONFIDENTIA
T= Laboi-èodè§~Gl.
.. \
FINDlNGS'OF FACT
1. - Thè pares stip~iated tht v~ntte -¡š piuerin the Houston East Field Ot& of the
texas Workers' Compensation Còision. . ,
2. .
". "',O,n .February 24,.1997.. Cf'aim~~t was the emplóyee of Sorlie System$ International.
: Inc., Empfoyèr. ' " ~'. . . . .~.,',. ~ . .
"3. .' - - Qñ t=ébruary 24, 1997, EmploYër pròvid, woieis' cõmpenšaoon coverage with
. - .' - -
, Texas' Mutål, fnsorance Coi:pany~ fOler1y. Texas 'Worker,'., Compensation'
, .'-. Insurance Fund. ' . . "'. '. ....: ,...." .",'. "
.. - .:.: .. . .... ~ ~ . .
4 . - "on Februarr 24, 1997, Glaima~t was,a f"~sióent of the ståte of
Alabama.
. 5. On Fåbruaiy 24, 1997, C(aimantwaswOrk~g iÏi th~'State ófAla'bàmå.~' ';.,
~ . ,I) '-''C~imânl wa himd _.. i1~-Sf of-~e~s;~
- 6: . . .. .... " or ~ ~ . - ..... . _,'-:._, _ _':
. 7. Claimant wås' îÖjured
lhan one, ".- " .;: . .. his hire. ..
:!~ , ..' ,,' ..', . . ',.': '." " year afèÍ th- date óf~:, .- :.. "',
less
'.
8. '-Eiploýerii'ed notiGe of Cfaimanes inJury'on Junè 6, -"1997. which qate'isnbt later
. , , than. Ìfe eighth day førio\Vng' Claimant's .absence from work fOf more than 'ooß:"ååy
, " , .dûe 10 his injury.. ' ..
fl. ."c'aimant sustained dåma§e or harm to the'physical strctre of-his bÒ¥~Wtileln
. . . ..... ..r,... .. '" ....". ..
'~e'corseat1d scope of his empymeit.Öft.i:ebni~uy 24; 1'997.: ...
. , a workèis' 'còmpenSatiò" £Ia~ìrl . . _, ,.: ;:; 11:.. ..'
. .10~ . tlaimai'l moo".., '. .. .. . .f' . ' téX~qnaf.äbout July~ ." :t997.
-; ;1. Aili a ~o.;. ~m".~;, ~ I.. :.~~~n¡ tWa ~ -
. ',' '~f.penSaløn Claim,~!l Aia"bama. '. ..
'. ..Alabama. .
. '1'4';: .' g:aiinant retained an attorney to as~ist rum with Í1i~ workern'-cinlpèn.sáriåå ~aim'in
. 13. . Cf'aimaflt reeeiveó Alabama workers' compensation benefis.
(.
...... ..~.
.. ::)
1~4.
.. - ......
,Final jUdgment,.regan:ihg ciáimaniis' Afpb~ma' wOrKers' còmpansatIo~ cáse.w~s.
signed on JUlY'13, 2001', by Lari f'C Anderon, clrèuit Judge. Hôuston. ,CountY.
8
,0 0'13 .t2~
, J
.'"
,-;-;."n
.:; : C01\TF1DE~TIA .
TeL Uiboreod~ §-~ø!,
Alabama,
CONCLUSIONS OF LAW
1. The-Téxas Workers' Compensaton Commissioa~~s jurisdicton to hear . - this case.
2. . VeÎiueis propér in the Houstoñ EastFJeld Offce.
3~ Claim.arit was an employee of Sonic Systems Intemational. under .tie Texas
Wor~'_Cømp~nsatian AGl -
4. . Oairrañt su~taìned a CQmpens~ble ¡njúry while ~orking iii Alabama.
.-
.5. Oairnarit was enntled to.an nghts and'
remedies under tie Texa.s Workers'
Compensation Act: .
.6 'Employer tirnely fied'noti~ of an ¡nju~ in aC9roance-w(th rEX lAOR CODE
(-- -':"¡1-') . § 409~OOS. .: - _ _ .
7. QaÙnanf did efect'to pursue a remedy and rever compei:sation-.under the .
R"
- '.
wornérs~ CofJpesafion laws oJ another jurisdicton, thereby barñng recoveiy uildér
the Texas- Wörkers~ Compensation Act -
.Dùe fo-- Cfaimant's e1ectÙm to pursue wOrker' Coinpei:saton lJdet the i~ of
another jürisdicton,Éiployer is-not enljtfed to reinibui:ëmènt of compensa&ån and'
meQ;cal payments tt.the Caoer.
..
'DECISJON
. - . .Claimánt~was âil emoyee of Sonic Systems fntéiafònåi .under the" T¿xås -- . ._-.
:~orkêrS' CömPen~ataöAct :Claiment sustained a COpeRsa~e Inury while- woooiig- in -
Alabama. 'Claifnot w-ás enliUed to alf rihts .and rem.ie-iJndér tle Texas Workecs' _.- _
~mp9nsafioò.ACl. Employer- firféfy fiéd notice. of an Jnjuiý:in -accrdance Witr lE - -
. lAOR "CODE § 4.09,.005. Oalnanf elected to purstie a rèmeqy and recver
CQlJpensa~on under th~ wor1e"rs' compensatiorrlaws of a;o1her JUrlsciction. there
barrng -recovery under tfe Texas Workers' CorlpensaUon Act Emptayer is .not enti~ed -
to reimbursernent of compènsatien ånd, medical paYmefl~ from the Carner, .
... .
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00-1313
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,-
CONFENn;_
T q. Labor Code. § 402.083
ORDER
The" Cànièr is not liable for benefts ånd- it is so,oidere.
~
'. ..... ßIGNEO this 1ST'dàY9fMa;ëh.-20oi .'
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CONFIDENTIAL. ,
PUftQtl 10: TÐlA Q:E A\'i
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.
-, TEXs WORKERS' COMPENSATION COMMISSION
. .'
APPEAlS PANEL NO. 117
J SONIC SYSTEMS'lNTERNATlONAl §
EMPlOYERlSUBCLAIMANT- § . . DECISION
. ON
J . . .Aeef=lLANT.: . ......: §~. :;_';. . _
REPRESENTED BY: - _. " . '".'.§.:' APPEAL
MICHAEL L SPRAfN 9 :.').... .:".::
. ....-
,. .§ .
GARY? COCHRAN .
. . v. §
g"
,-
ASSISTED BY AN OMBUDSMAN
CLAfMANT §
§
.' FILED:"
, ATTHIE HEARING
NO RESPONSE ON APPEA
§
§ .... ,"4AY .2 2 20021
.§ . . , :.OFHi;'NGS
. DMESfGlDlfl~TOR' .
J ~ AND § . ,', .RKSs- .,
CQMPENSA . c'CoMMISSIOU .
§
TEXs MUTUAL INSURACE. §
j. COMPANY - ,_. §
§.
. . RESPONDENT.
_.
REPRESENTED BY:
.'. J'EF"F R.BOGGESS § .: ,
§
§ . DOCKET NO. HE-X1-5~616B-01-CC-HE47
-~. APPEAL NO. 02Ð77.1:
.; .'
J ThIs appeal arises pursuani to Ihe Tams W.oers' Compensation Ac TEX.I.. .
CODe ANN~ § 401.001 et seq. (1989 AcI). A contesle cae hearing wa held on January .. !
23,2002, Wilh the record closing on Febniary25, 2002, in Houston, Tex, wlllK Eugne
subclaimant .
Krft prsiding as hearingoffcer. The appellan~ who islle emloyer
j"
was actvely pursuing Ihis claim for Texas woikers' compensatin benells as a
(subclalman I herein).
1
'. , .
The hearing offcer determned thai (1) Ihe cllmanl was an employee of Ihe
subclaianhmder Ihe 1989 AcI (2) the claimah sustained a compensable injury while
J WOrkng in Alabama; (3) Ihe da
iman I was enl1fed to ai rights and remedies under the 198.9
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. CONFIOËNtlAl
'1 puuant 10: TE.lA Cl I
-401 OlJ
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..1 Act; (4) the subc!aimant timely fied notice of an injury
in accordance with Section 409.005;
(5) the claimant elected to pursue a remedy and recover compensation under the workers'
compensation laws of the State of Alabama, thereby barring recovery under the 1989 Act;
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'and (6) due to the claimant's eJection to pursue
workers' compensation.
laws of another jurisçfiction. the subclaimant is not entited to reimbursement- the
benefis under
of
compensation .and mecfcal payments from thé respondent (ç;arrer).
1
The subclaimant appealed the heanng offcets detennination~ with regard.
da.;rnants election of remedies and tbe subclajn:ant's right.to reimbursement of medical.
to .the
J and compensation payments. The respondent (carrer) urges affmiaÍlce. The claimant
did not file a response. The heåring offcets determinations with regard to the remaining .
,: issues were not åpp~aled and are, therefòre, finaL. Section 410.169. . : . : .
DECISION"
I'. '.
Affrmed as .reformed.
i: . ELECTioN-TO PURSUE BENEfITS IN ALABAMA
l' The hearing offcer did not err in deteniiining that the craitnantelected.to pursue'a
remedy and recover Gompensation under the workers' co mpensation laws of the State of
.~
Alabama,. thereby barrngyecoyery under the 1989 Act Section 406.ol5 cJeady.pi"ViCles
) as'foiròws: . . : '. . . '. ':_ ~.
...
(a) An injured employee who.elects to
~~a . ~
pursue the empIÒyee's remeçfy
l, . "
. under the warkers' compensation
laws ofanotherjunsdiction and'whQ
recovers' benefits under those laws may not recover under this
l: -
. (b) The amount of benefis' accpted under the laws of the other
. junsdictlon without an electiön under Subsection" (a) shaff be' credited
l against the benefits that the employee woufd have receiveq:~had the.
claim been made under this -~ublille. .
J It is. undisputed fhàt the claima.nt received workers' compensation benefis Ufiderthe laws
.. :o the State of Alabama, where he'Nas a resident. Atissueiswhetherthe cfaimantelected
to pursue.a remedy under the laws of that jurisdiction.
~.
The evidence shDws that
the claimant was 'injured while working, in Alabamá. The
'claimant ¡nitiany sought relief in Texas from the carrier, but the claim was denied by the
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2.
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CONFIDENTIAL
PlCllfl Co: re us. QJ A'
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carrer. Although the claimant stated that he "tried for
two years to get the claim handle
properly," we see no evidence that the claimant prosecuted his claim for benefits within the
hearings system of the Texas Workers' Compensation Commission (Commi.sion) or
:") otherwse sought administrtie recourse for the denial of Texas benefds~'.'
Instead, the claimant hired an attorney In Alabama and prosecuted his claim under
1 the workers' compensation laws of that jurisdiction, resulting in a favorable decision by
Alabama court The court specililly.found in its JUdgmenl that the subcllmanl had'
an
J coverage through a policy wi th ~ In lhs case. Notwthtading, the claImant
staled, "I felt Ihat I did not have a choice wh 10 fie due to the facl thatT exas has denied
my claim and my state of
limitations was about to expIre In Alabama .. ., I simply filed
I. in .Alabama becuse that was the lasl a/femative thát i had." The hearig ofcer obviously
did not credit any indIcation thaI
the climant was compeed to pursue hearing offcer, as
.- remedies in Alabama rathe; tlan T eis, Under the circumstances, thethe fuii range ofhis
I! - sole judge of the weight and credibiil of tle -evdence, .
"elects" 10 pursue compensatian benefi in Alabama, ascould determne thaI tle claimant
that temi is USed under Section
l 406,075(a).. ThIs defemilna.liòn Is nol so againsi ti great
the evidence as 10 be cleanywingor MooifeSy unjst Cainv. Bain.7l19 S.W:2d 175
(Tex. 1986). . ..' weight arrd prponderançe of
J The subcaimant assert elTr In the I'ring. offets 'ad!iisslol\ of the latEl-
exi:anged Camer's ßxhlba Nos, 1 through 4. To obta à reversal bi¡sed,oii Such an
1 etm, the subclalmant mum show
thaI not onfywas the prbably did the evience eror of
- that the elTr was reasonably caoulated 10 cauSe aM admission of cause the reditonbut
. an Improper dedsiol). Heman v..Iißlndem;'lln S.W.td 732 (T~ Civ. APP.-San
Anfonio 1981, no Wri). Upon te~..of the exlb, we -do riof find that 10 be so. in thIs
i. case,. ... . . . .
l .
REIMBURSEMENT . .
The POlicy oftlecarr is in evidence,Frariy, it appéars tlat endorsement we
~.. 42 03' Ò7,an "Other Stales Endorsnt, "'expSs/ a!ales ilalthe. caer wUI reimburse . .
the sÍJliclålianl for afTou nls requireil 10 be pai as béfefls In Alabåma (which is n at listed
as Ofe of tle excluded states for this- purpse). However, any laWl or reulatipns of the
J Alabama workers' compensalinsyslem lIalmighlgovem reimburseménl were left
.undeveloped in
the record. ;. .
J In any case, the hearings system of Ihe Commission is nat a general court of law
will Ihe junsdiction 10 adjucltate contrct líabH1ly. . . Our junsdiction Is limiled to
. consideration of issues relating 10 Texas workers' Còmpensalion benefis and any
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-GNRDENT-IAL-,
10- .......R( 10: TElA co A:
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(.
.- ,J entitlement to reimbursement thereof. The hearing offcer did not err in determining that
the subdaimant is not entitled to reimbursement for workers' compensation and medical
payments from the
no benefits were due underthe laws
J
carrer because he also found that
of Texas. The subdaimant's request for reimbursement is essentially
a the1989 Act, we
to those benefits. Because the claimant is barred from recovery under subrogation claim
conclude that the subclaimant, likewise, i~ not entitled to recovery under the 1989 Act, as
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a matter of law. A question of whether the subcfaimant is entited to reimbursement of
Alabama benefis. remains a question for another jurisdiction. .
-J Accordingly, we amend the conClusions of law and order sections of the hearing _
offcets decision to read that the subd~imant is not en.titfed to reimbursement of any Texas
workers' comp_ensation and medical benefits, as none åre due. The decision and order of
1-:
the hearing offcèr. are affnned .with .such niodification, making clear that lhe general.
. question of reimbursement of Alabama benefits is not and cannot be decided. by the .
j~ -
. .. .
Commission's hearing offcer. . ., ,
i
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'. .the insurance carrer is TEXAS MUTUALJNSURANCE
The tre corporate name of
COMP ~NY and th~ ,name and address of its registered agent for serÝi?e of process 'is
RUSSELL RAY OUVER, PRESIDENT
221 W. 6TH STREET, SUITE 300
, AUST'N, TEXS 78701.
'W
.~~
,:i ..
j, Susan M. Kelley . .
Appeals Judge
J: CONCUR:
l .~ttU.
, Ela,;ne; M. Chaney
Appeals Judge '
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;
Robert W. Potts
AppeaJs JUdge
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001-394