The Texas Declaration of Independence of March 2, 1836

 

The Texas Declaration of Independence
(March 2, 1836)

 

The Texas Declaration of Independence was produced, literally, overnight. Its urgency was paramount, because while it was being prepared, the Alamo in San Antonio was under seige by Santa Anna’s army of Mexico.Immediately upon the assemblage of the Convention of 1836 on March 1, a committee of five of its delegates were appointed to draft the document. The committee, consisting of George C. Childress, Edward Conrad, James Gaines, Bailey Hardeman, and Collin McKinney, prepared the declaration in record time. It was briefly reviewed, then adopted by the delegates of the convention the following day.

As seen from the transcription below, the document parallels somewhat that of the United States, signed almost sixty years earlier. It contains statements on the function and responsibility of government, followed by a list of grievances. Finally, it concludes by declaring Texas a free and independent republic.

The full text of the document is as follows:


 

The Unanimous
Declaration of Independence
made by the
Delegates of the People of Texas
in General Convention
at the town of Washington
on the 2nd day of March 1836.

When a government has ceased to protect the lives, liberty and property of the people, from whom its legitimate powers are derived, and for the advancement of whose happiness it was instituted, and so far from being a guarantee for the enjoyment of those inestimable and inalienable rights, becomes an instrument in the hands of evil rulers for their oppression.

When the Federal Republican Constitution of their country, which they have sworn to support, no longer has a substantial existence, and the whole nature of their government has been forcibly changed, without their consent, from a restricted federative republic, composed of sovereign states, to a consolidated central military despotism, in which every interest is disregarded but that of the army and the priesthood, both the eternal enemies of civil liberty, the everready minions of power, and the usual instruments of tyrants.

When, long after the spirit of the constitution has departed, moderation is at length so far lost by those in power, that even the semblance of freedom is removed, and the forms themselves of the constitution discontinued, and so far from their petitions and remonstrances being regarded, the agents who bear them are thrown into dungeons, and mercenary armies sent forth to force a new government upon them at the point of the bayonet.

When, in consequence of such acts of malfeasance and abdication on the part of the government, anarchy prevails, and civil society is dissolved into its original elements. In such a crisis, the first law of nature, the right of self-preservation, the inherent and inalienable rights of the people to appeal to first principles, and take their political affairs into their own hands in extreme cases, enjoins it as a right towards themselves, and a sacred obligation to their posterity, to abolish such government, and create another in its stead, calculated to rescue them from impending dangers, and to secure their future welfare and happiness.

Nations, as well as individuals, are amenable for their acts to the public opinion of mankind. A statement of a part of our grievances is therefore submitted to an impartial world, in justification of the hazardous but unavoidable step now taken, of severing our political connection with the Mexican people, and assuming an independent attitude among the nations of the earth.

The Mexican government, by its colonization laws, invited and induced the Anglo-American population of Texas to colonize its wilderness under the pledged faith of a written constitution, that they should continue to enjoy that constitutional liberty and republican government to which they had been habituated in the land of their birth, the United States of America.

In this expectation they have been cruelly disappointed, inasmuch as the Mexican nation has acquiesced in the late changes made in the government by General Antonio Lopez de Santa Anna, who having overturned the constitution of his country, now offers us the cruel alternative, either to abandon our homes, acquired by so many privations, or submit to the most intolerable of all tyranny, the combined despotism of the sword and the priesthood.

It has sacrificed our welfare to the state of Coahuila, by which our interests have been continually depressed through a jealous and partial course of legislation, carried on at a far distant seat of government, by a hostile majority, in an unknown tongue, and this too, notwithstanding we have petitioned in the humblest terms for the establishment of a separate state government, and have, in accordance with the provisions of the national constitution, presented to the general Congress a republican constitution, which was, without just cause, contemptuously rejected.

It incarcerated in a dungeon, for a long time, one of our citizens, for no other cause but a zealous endeavor to procure the acceptance of our constitution, and the establishment of a state government.

It has failed and refused to secure, on a firm basis, the right of trial by jury, that palladium of civil liberty, and only safe guarantee for the life, liberty, and property of the citizen.

It has failed to establish any public system of education, although possessed of almost boundless resources, (the public domain,) and although it is an axiom in political science, that unless a people are educated and enlightened, it is idle to expect the continuance of civil liberty, or the capacity for self government.

It has suffered the military commandants, stationed among us, to exercise arbitrary acts of oppression and tyrrany, thus trampling upon the most sacred rights of the citizens, and rendering the military superior to the civil power.

It has dissolved, by force of arms, the state Congress of Coahuila and Texas, and obliged our representatives to fly for their lives from the seat of government, thus depriving us of the fundamental political right of representation.

It has demanded the surrender of a number of our citizens, and ordered military detachments to seize and carry them into the Interior for trial, in contempt of the civil authorities, and in defiance of the laws and the constitution.

It has made piratical attacks upon our commerce, by commissioning foreign desperadoes, and authorizing them to seize our vessels, and convey the property of our citizens to far distant ports for confiscation.

It denies us the right of worshipping the Almighty according to the dictates of our own conscience, by the support of a national religion, calculated to promote the temporal interest of its human functionaries, rather than the glory of the true and living God.

It has demanded us to deliver up our arms, which are essential to our defence, the rightful property of freemen, and formidable only to tyrannical governments.

It has invaded our country both by sea and by land, with intent to lay waste our territory, and drive us from our homes; and has now a large mercenary army advancing, to carry on against us a war of extermination.

It has, through its emissaries, incited the merciless savage, with the tomahawk and scalping knife, to massacre the inhabitants of our defenseless frontiers.

It hath been, during the whole time of our connection with it, the contemptible sport and victim of successive military revolutions, and hath continually exhibited every characteristic of a weak, corrupt, and tyrranical government.

These, and other grievances, were patiently borne by the people of Texas, untill they reached that point at which forbearance ceases to be a virtue. We then took up arms in defence of the national constitution. We appealed to our Mexican brethren for assistance. Our appeal has been made in vain. Though months have elapsed, no sympathetic response has yet been heard from the Interior. We are, therefore, forced to the melancholy conclusion, that the Mexican people have acquiesced in the destruction of their liberty, and the substitution therfor of a military government; that they are unfit to be free, and incapable of self government.

The necessity of self-preservation, therefore, now decrees our eternal political separation.

We, therefore, the delegates with plenary powers of the people of Texas, in solemn convention assembled, appealing to a candid world for the necessities of our condition, do hereby resolve and declare, that our political connection with the Mexican nation has forever ended, and that the people of Texas do now constitute a free, Sovereign, and independent republic, and are fully invested with all the rights and attributes which properly belong to independent nations; and, conscious of the rectitude of our intentions, we fearlessly and confidently commit the issue to the decision of the Supreme arbiter of the destinies of nations.

Richard Ellis, President
of the Convention and Delegate
from Red River.
Charles B. Stewart
Tho. Barnett
John S. D. Byrom
Francis Ruis
J. Antonio Navarro
Jesse B. Badgett
Wm D. Lacy
William Menifee
Jn. Fisher
Matthew Caldwell
William Motley
Lorenzo de Zavala
Stephen H. Everett
George W. Smyth
Elijah Stapp
Claiborne West
Wm. B. Scates
M. B. Menard
A. B. Hardin
J. W. Burton
Thos. J. Gazley
R. M. Coleman
Sterling C. Robertson James Collinsworth
Edwin Waller
Asa Brigham
Geo. C. Childress
Bailey Hardeman
Rob. Potter
Thomas Jefferson Rusk
Chas. S. Taylor
John S. Roberts
Robert Hamilton
Collin McKinney
Albert H. Latimer
James Power
Sam Houston
David Thomas
Edwd. Conrad
Martin Parmer
Edwin O. Legrand
Stephen W. Blount
Jms. Gaines
Wm. Clark, Jr.
Sydney O. Pennington
Wm. Carrol Crawford
Jno. TurnerBenj. Briggs Goodrich
G. W. Barnett
James G. Swisher
Jesse Grimes
S. Rhoads Fisher
John W. Moore
John W. Bower
Saml. A. Maverick (from Bejar)
Sam P. Carson
A. Briscoe
J. B. Woods
H. S. Kimble, Secretary

 

 

 

Signers of the Texas Decl. of Ind.
http://www.lsjunction.com/docs/tdoi.htm

 

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Few Things Help an Individual More Than to Place Responsibility Upon Him–Fort Worth, Texas Civil Litigation Lawyers

QUOTES ON LIBERTY AND JUSTICE, TRUTH AND DUTY:

 

 

“Few things help an individual more than to place responsibility upon him.” Up from Slavery

-Booker T. Washington

 

“The true meaning of America, you ask? It’s in a Texas rodeo, in a policeman’s badge, in the sound of laughing children, in a political rally, in a newspaper… In all these things, and many more, you’ll find America. In all these things, you’ll find freedom. And freedom is what America means to the world. And to me.”

-Audie Murphy

 

“The enemy has demanded a surrender at discretion, otherwise, the garrison are to be put to the sword, if the fort is taken — I have answered the demand with a cannon shot, & our flag still waves proudly from the walls — I shall never surrender or retreat.  Then, I call on you in the name of Liberty, of patriotism & everything dear to the American character, to come to our aid, with all dispatch — The enemy is receiving reinforcements daily & will no doubt increase to three or four thousand in four or five days.  If this call is neglected, I am determined to sustain myself as long as possible & die like a soldier who never forgets what is due to his own honor & that of his country — Victory or Death. P.S. The Lord is on our side…”

-William Barrett Travis

 

“If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenue and taxation. It watches prosperity as its prey and permits none to escape without tribute.” Rights of Man, 1791

-Thomas Paine

 

“If the federal government should overpass the just bounds of its authority and make a tyrannical use of its powers, the people, whose creature it is, must appeal to the standard they have formed, and take such measures to redress the injury done to the Constitution as the exigency may suggest and prudence justify.” The Federalist Papers Federalist No. 33,  January 3, 1788

-Alexander Hamilton

 

“It is only when the people become ignorant and corrupt, when they degenerate into a populace, that they are incapable of exercising their sovereignty.” Inaugural Address, March 4, 1817

-James Monroe

 

“I love my country, I love my guns, I love my family. I love the way it is now, and anybody that tries to change it has to come through me. That should be all our attitudes because this is America….”

-Charles Daniels

 

“But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism, it is their rights, it is their duty, to throw off such Government.”  April 4, 1776

– Declaration of Independence

 

“It is much to be wished that slavery may be abolished. The honour of the States, as well as justice and humanity, in my opinion, loudly call upon them to emancipate these unhappy people. To contend for our own liberty, and to deny that blessing to others, involves an inconsistency not to be excused. Letter to R. Lushington, March 15, 1786

-John Jay

 

“In such a performance you may lay the foundation of national happiness only in religion, not by leaving it doubtful “whether morals can exist without it,” but by asserting that without religion morals are the effects of causes as purely physical as pleasant breezes and fruitful seasons.” Letter to John Adams, August 20, 1811

-Benjamin Rush 

 

“Man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.” Farewell Address, The Oval Office, January 11, 1989

-Ronald Reagan

 

“I prefer to be true to myself, even at the hazard of incurring the ridicule of others, rather than to be false, and incur my own abhorrence.” Narrative of the Life of Frederick Douglass

-Frederick Douglass

 

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Pregnancy Discrimination and Workplace Laws–EEOC–Ft. Worth, Texas Employment Defense Attorneys

Pregnancy Discrimination & Work Situations

The Pregnancy Discrimination Act (PDA) forbids discrimination based on pregnancy when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, such as leave and health insurance, and any other term or condition of employment.

Pregnancy Discrimination & Temporary Disability

If a woman is temporarily unable to perform her job due to a medical condition related to pregnancy or childbirth, the employer or other covered entity must treat her in the same way as it treats any other temporarily disabled employee. For example, the employer may have to provide light duty, alternative assignments, disability leave, or unpaid leave to pregnant employees if it does so for other temporarily disabled employees.

Additionally, impairments resulting from pregnancy (for example, gestational diabetes or preeclampsia, a condition characterized by pregnancy-induced hypertension and protein in the urine) may be disabilities under the Americans with Disabilities Act (ADA).  An employer may have to provide a reasonable accommodation (such as leave or modifications that enable an employee to perform her job) for a disability related to pregnancy, absent undue hardship (significant difficulty or expense).  The ADA Amendments Act of 2008 makes it much easier to show that a medical condition is a covered disability.  For more information about the ADA, see http://www.eeoc.gov/laws/types/disability.cfm.  For information about the ADA Amendments Act, see http://www.eeoc.gov/laws/types/disability_regulations.cfm.

Pregnancy Discrimination & Harassment

It is unlawful to harass a woman because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. Harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Pregnancy, Maternity & Parental Leave

Under the PDA, an employer that allows temporarily disabled employees to take disability leave or leave without pay, must allow an employee who is temporarily disabled due to pregnancy to do the same.

An employer may not single out pregnancy-related conditions for special procedures to determine an employee’s ability to work. However, if an employer requires its employees to submit a doctor’s statement concerning their ability to work before granting leave or paying sick benefits, the employer may require employees affected by pregnancy-related conditions to submit such statements.

Further, under the Family and Medical Leave Act (FMLA) of 1993, a new parent (including foster and adoptive parents) may be eligible for 12 weeks of leave (unpaid or paid if the employee has earned or accrued it) that may be used for care of the new child. To be eligible, the employee must have worked for the employer for 12 months prior to taking the leave and the employer must have a specified number of employees.  See http://www.dol.gov/whd/regs/compliance/whdfs28.htm.

Pregnancy & Workplace Laws

Pregnant employees may have additional rights under the Family and Medical Leave Act (FMLA), which is enforced by the U.S. Department of Labor.  Nursing mothers may also have the right to express milk in the workplace under a provision of the Fair Labor Standards Act enforced by the U.S. Department of Labor’s Wage and Hour Division.  See http://www.dol.gov/whd/regs/compliance/whdfs73.htm.

For more information about the Family Medical Leave Act or break time for nursing mothers, go to http://www.dol.gov/whd, or call 202-693-0051 or 1-866-487-9243 (voice), 202-693-7755 (TTY).

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Duty to Indemnify Under Texas Law: Ruled Determination Premature Until Underlying Lawsuit Resolved– Fort Worth, Texas Insurance Defense Attorneys

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CHARTIS SPECIALTY INSURANCE CO., §
§
Plaintiff, §
§
v. § CIVIL ACTION H-14-1527
§
JSW STEEL (USA), INC., §
§
Defendant. §
ORDER
Pending before the court are plaintiff Chartis Specialty Insurance Company’s (“Chartis”)
motion for summary judgment (Dkt. 20), defendant JSW Steel Inc.’s (“JSW”) motion for partial
summary judgment (Dkt. 22), JSW’s motion to abate (Dkt. 23), and Chartis’s motion to strike (Dkt.
29). After considering the motions, responses, and applicable law, the court finds that Chartis’s
motion for summary judgment (Dkt. 20) should be GRANTED IN PART and DENIED IN PART,
JSW’s motion for summary judgment (Dkt. 22) should be DENIED, JSW’s motion to abate (Dkt.
23) should be GRANTED, and Chartis’s motion to strike (Dkt. 29) should be DENIED AS MOOT.
I. BACKGROUND
In this case, an insurer, Chartis, seeks a declaration that it does not owe indemnity or defense
for an underlying lawsuit against its insured, JSW. Dkt. 1 at 1. Chartis issued commercial general
liability and commercial umbrella policies to JSW in September 2010. Dkt. 20 at 7-8. Among other
things, the policies provide coverage for “personal and advertising injury,” which includes “oral or
written publication, in any manner, of material that slanders or libels a person or organization or
disparages a person’s or organization’s goods, products or services.” Dkt. 20-3 at 49. However, the
policy excludes (1) “personal and advertising injury caused by or at the direction of the insured with
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 1 of 7
the knowledge that the act would violate the rights of another and would inflict personal and
advertising injury,” (2) “personal and advertising injury arising out of oral or written publication of
material, if done by or at the direction of the insured with knowledge of its falsity,” and (3) “personal
and advertising injury arising out of a breach of contract, except an implied contract to use another’s
advertising idea in your advertisement.” Dkt. 7-1 at 11.
On April 19, 2012, MM Steel filed an original complaint alleging that JSW and others
arranged a “group boycott” to drive MM Steel out of business (the “Underlying Lawsuit”). Dkt. 1-1.
MM Steel’s original complaint included claims for violation of the Sherman Act, breach of contract,
tortious interference, business disparagement, and conspiracy. Dkt. 20 at 9. JSW tendered the
Underlying Lawsuit to Chartis for defense and indemnity. Id. Chartis maintained that the only
potentially covered claim was MM Steel’s claim for business disparagement. Id. Even though the
original complaint did not contain allegations that JSW made any disparaging statements, Chartis
agreed to defend JSW in the Underlying Lawsuit with a full reservation of rights. Id. Prior to trial,
MM Steel abandoned all of its state law claims against JSW except for breach of contract. Id.
On March 25, 2014, the jury returned a verdict in MM Steel’s favor on its antitrust and
breach of contract claims against JSW. Id at 10. MM Steel advised the court that it did not intend
to pursue recovery of its breach of contract verdict, and the court entered a final judgment in the
Underlying Lawsuit against JSW and its co-defendants for $156 million. Id. Following judgment,
JSW turned to Chartis for indemnity and post-verdict defense costs while the Underlying Lawsuit
is on appeal. Id. Chartis denied coverage because the verdict rendered against JSW was for claims
that were not covered by the Chartis policies. Id. Chartis then filed this lawsuit seeking a
declaration that it has no duty to defend JSW on appeal or indemnify JSW for the judgment. JSW
2
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 2 of 7
presented breach of contract claims for Chartis’s failure to defend and indemnify JSW. JSW and
Chartis now both move for summary judgment.
II. LEGAL STANDARD
A court shall grant summary judgment when a “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(c). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for
the non-moving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The
moving party bears the initial burden of demonstrating the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). If the party meets its
burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue
for trial. Fed. R. Civ. P. 56(e). The court must view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org.
v. City of Dallas, Tex., 529 F.3d 519, 524 (5th Cir. 2008).
III. ANALYSIS
A. Duty to Defend
Under Texas law, courts follow the “eight corners” rule to determine whether a party has a
duty to defend. Federated Mut. Ins. Co. v. Grapevine Excavation Inc., 197 F.3d 720, 723 (5th Cir.
1999). “Under this rule, courts compare the words of the insurance policy with the allegations of
the plaintiff’s complaint to determine whether any claim asserted in the pleading is potentially within
the policy’s coverage.” Id. “The duty to defend analysis is not influenced by facts ascertained before
the suit, developed in the process of litigation, or by the ultimate outcome of the suit.” Primrose
Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d 546, 552 (5th Cir. 2004). All doubts with regard to
the duty to defend are resolved in favor of the duty. Id. Courts applying the eight corners rule “give
3
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 3 of 7
the allegations in the petition a liberal interpretation.” Nat’l Union Fire Ins. Co. of Pittsburgh, Pa.
v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997).
JSW argues that the court should consider the original complaint in the Underlying Lawsuit
in conducting its analysis. Dkt. 24 at 19-20. However, none of the allegations concerning JSW in
MM Steel’s original complaint in the Underlying Lawsuit trigger coverage under the policy. MM
Steel alleges that several of its competitors convinced JSW to breach the contract between MM Steel
and JSW by refusing to sell steel to MM Steel. According to the original complaint:
at a meeting in October 2011, JSW’s President, Mike Fitch, and Rajesh Khosla, a
JSW salesman, told Plaintiff MM Steel that JSW would no longer honor its contract.
This was because, according to Fitch, multiple persons had made “unsolicited” visits
to JSW to disparage Hume, Schultz1, and MM Steel. Because of those unsolicited
visits, JSW cut off supply to MM Steel. Hume told Fitch that he was effectively
putting MM Steel out of business. When Hume told Fitch that he (Hume) sensed
Fitch and JSW had been threatened, Fitch’s only response was this: “I understand the
gravity of the situation,” but “I have to do what’s best for my business.” The end
result was that despite an existing contract and an established business relationship
with Hume and Shultz, JSW was going to enter into a conspiracy to shut down MM
Steel, not to mention breach its contract. Plaintiff has recently learned that
Defendants Alloy and Moore threatened JSW.
Dkt. 20-7 at 15-16. These are the only facts alleged against JSW, and they are excluded from
coverage, as analyzed below. The complaint also contains the following allegations applicable to
all defendants:
Defendants published disparaging words about Plaintiff MM Steel’s economic
interests, and those words were false. Defendants published the words with malice
and without privilege.
Defendant’s tortious conduct caused Plaintiff MM Steel to suffer actual damages and
other special damages.
Id. at 25.
1Hume and Shultz are the owners of MM Steel. Dkt. 20-7 at 13.
4
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 4 of 7
While the policies at issue cover statements that disparage a person’s or organization’s goods,
products or services, certain statements are excluded. Dkt. 1 at ¶ 4.7. Specifically excluded from
coverage is “personal or advertising injury caused by or at the direction of the insured with the
knowledge that the act would violate the rights of another and would inflict personal and advertising
injury.” The complaint seems to allege that all of the disparagement was actually committed by
parties other than JSW, and JSW’s wrongdoing was limited to its breach of contract (also excluded
from coverage) in aid of the conspirators’ antitrust violations. However, even if the disparagement
were alleged against or imputed to JSW, it would not be covered as it was a knowing attempt to
violate MM Steel’s rights and inflict personal and advertising injury. See Burlington Ins. Co. v.
Superior Nationwide Logistics, Ltd., 783 F. Supp. 2d 958, 964-65 (S.D. Tex. 2010) aff’d 427 F.
App’x 299 (5th Cir. 2011) (finding that allegations of an organized campaign to destroy a competing
business did not trigger a duty to defend where policy language was identical to the Chartis policy);
see also Rose Acre Farms, Inc. v . Columbia Cas. Co., 662 F.3d 765, 769 (7th Cir. 2011); Trailer
Bridge, Inc. v. Ill. Nat’l Ins. Co., 657 F.3d 1135 (11th Cir. 2011). Additionally, the policies exclude
personal or advertising injury where the publication was made with knowledge of its falsity. Dkt.
7-1 at 11. The disparagement alleged in the complaint consists of false statements made with malice.
These allegations are clearly excluded from coverage. Because the complaint alleges only knowing
violations of MM Steel’s rights and deliberate publication of false material, policy coverage is not
implicated, and there is no duty to defend. 2 Because Chartis has no duty to defend JSW in the
Underlying Lawsuit, JSW cannot recover on its breach of contract claim predicated on Chartis’s
2 The conclusion is the same when the court considers the pre-trial order, which alleges basically the
same facts, but asserts only antitrust claims.
5
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 5 of 7
failure to defend. Likewise, JSW is not entitled to interest on any unpaid defense fees as alleged in
JSW’s counterclaim. Dkt. 8 at 17-18.
B. Duty to Indemnify
A decision on whether Chartis has a duty to indemnify is premature. “Generally, Texas law
only considers the duty-to-indemnify question justiciable after the underlying suit is concluded,
unless ‘the same reasons that negate the duty to defend likewise negate any possibility the insurer
will ever have a duty to indemnify.’” Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523,
529 (5th Cir. 2004) (quoting Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex.
1997)). Although the evidence presented at trial and the findings of the jury do not appear to trigger
coverage, the Underlying Lawsuit is on appeal, and this court finds it prudent to stay this action until
the Underlying Lawsuit is fully and finally resolved. Upon final resolution of the Underlying
Lawsuit, the parties can move this court for a final determination on indemnity.
C. Motion to Strike
Also before the court is Chartis’s motion to strike an expert report submitted by JSW in
support of its claim for breach of contract for failure to defend. Because that claim is being
dismissed by this order, the motion to strike is moot.
IV. CONCLUSION
Chartis has no duty to defend JSW in the Underlying Lawsuit. However, a decision on the
duty to indemnify is premature. Accordingly, Chartis’s motion for summary judgment (Dkt. 20) is
GRANTED IN PART and DENIED IN PART, JSW’s motion for summary judgment on duty to
6
Case 4:14-cv-01527 Document 39 Filed in TXSD on 07/08/15 Page 6 of 7
defend (Dkt. 22) is DENIED, and JSW’s motion to abate (Dkt. 23) is GRANTED. Chartis’s motion
to strike (Dkt. 29) is DENIED AS MOOT. The remainder of this case is STAYED pending final
resolution of the Underlying Lawsuit. JSW’s claims for breach of contract based on a failure to
defend and interest on unpaid defense fees are DISMISSED WITH PREJUDICE.
It is so ORDERED.
Signed at Houston, Texas on July 8, 2015.
___________________________________
Gray H. Miller
United States District Judge

 

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Claim By Insured Against Insurance Adjuster in Texas Property Damage Lawsuit– Ft. Worth, Texas Insurance Defense Lawyers

ZIMMERMAN v. TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY by XAVIER RODRIGUEZ, District Judge

Civil Action No. 5:15-CV-325.

RONALD ZIMMERMAN, Plaintiff, v. TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY AND COREY KRONK, Defendants.

United States District Court, W.D. Texas, San Antonio Division.
June 30, 2015.

ORDER

XAVIER RODRIGUEZ, District Judge.

On this date the Court considered Plaintiff’s motion to remand and for leave to amend the complaint (docket no. 2). For the following reasons, the Court DENIES the motion to remand and the motion to amend.

I. Background

Plaintiff Ronald Zimmerman owns a residence located at 111 Routt Street, San Antonio, Bexar County, Texas. (Docket no. 1-4 at 3). Defendant Travelers Lloyds of Texas Insurance Company (“Travelers”) is an insurance company that employs Defendant Corey Kronk as a claims adjuster. (Docket no. 2 at 1). Zimmerman maintains insurance on his residence with Travelers. (Docket no. 1-4 at 4). Zimmerman alleges the roofs of his house and separate cabana were damaged by hail. (Id. at 3). Zimmerman made a claim with Travelers Insurance for the loss on or about March 31, 2013. (Id.) Kronk was the claims adjuster assigned to handle Plaintiff’s claim. “EFI Global (a forensic engineering firm) was hired by [Travelers] to investigate the roof damage, ultimately stating that they did not observe hail damage to the cabana roof.” (Id.) Kronk adjusted the loss, and Travelers paid for the damage to the roof of the main home, but denied the cabana portion of the claim. (Id.)

Zimmerman alleges that a tree branch fell on a vent on the roof of the cabana, allowing water to enter and cause more damage to the cabana after Kronk and Travelers denied his initial claim on the cabana. (Id. at 3-4). Kronk re-inspected the cabana. (Id. at 4). Zimmerman alleges Kronk initially acknowledged the damage and agreed to cover the repair. (Id.) Zimmerman alleges Kronk told him that Kronk’s supervisor instructed him to do so. (Id.)

Zimmerman filed a state court petition in the 407th Judicial District Court in Bexar County, Texas, on March 19, 2015. (Docket no. 1 at 1). Defendants removed to federal court on April 23, 2015, based on diversity jurisdiction. (Id. at 2). Zimmerman filed this opposed motion to remand to state court and an incomplete motion for leave to amend his complaint on May 22, 2015.1 (Docket no. 2 at 1). Defendants responded on June 4, 2015. (Docket no. 3 at 14). Zimmerman filed again for leave to amend, this time attaching the proposed amended complaint, on June 9, 2015. (Docket no. 4).

II. Legal Standard

A party may remove an action from state court to federal court if the action is one over which the federal court possesses subject matter jurisdiction. See 28 U.S.C. § 1441(a). On a motion to remand, the court must consider whether removal was proper. Removal is proper in any case in which the federal court would have had original jurisdiction. Id. A federal court originally has subject matter jurisdiction over controversies involving disputes between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Citizenship of the parties and amount in controversy are based on the facts as they existed at the time of removal. Louisiana v. Am. Nat. Prop. Cas. Co., 746 F.3d 633, 636 (5th Cir. 2014). The court considers only the allegations in the state court petition; any amended complaints filed after removal are not considered. Cavallini, 44 F.3d at 264 (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939) (“The second amended complaint should not have been considered in determining the right to remove . . . [removal] was to be determined according to the plaintiffs’ pleading at the time of the petition for removal.”)).

The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). The removal statute is strictly construed in favor of remand. Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014) (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)).

III. Analysis — Motion to Remand

A court only has diversity jurisdiction when the parties are completely diverse, i.e. when no plaintiff is a citizen of the same state as any defendant. Wisconsin Dep’t of Corr. v. Schacht, 524 U.S. 381, 388 (1998). Here, Zimmerman and Defendant Kronk are both citizens of Texas. Travelers, being a citizen of Connecticut for diversity purposes, is diverse from Plaintiff. The amount in controversy exceeds $75,000. (Docket no. 3 at 5). Defendants argue that Kronk is improperly joined. If Kronk is stricken from the suit, complete diversity exists and removal was proper. Therefore, the Court must determine if Kronk was improperly joined.

A removing party can establish federal jurisdiction based on 28 U.S.C. § 1332 by demonstrating that an in-state defendant has been “improperly joined.” Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 573 (5th Cir. 2004). To establish improper joinder, a removing party must show a plaintiff cannot “establish a cause of action against the non-diverse party in state court.” Id. (quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir. 2003)). A plaintiff cannot establish a cause of action against an in-state defendant if there is “no reasonable basis for the district court to predict that the plaintiff might be able to recover” on the claims asserted against an in-state defendant. Smallwood, 385 F.3d at 573.

The improper joinder analysis closely resembles a Rule 12(b)(6) analysis. Id. However, unlike in a traditional Rule 12(b)(6) analysis, the Court has discretion to review evidence on whether plaintiff has a viable cause of action against the non-diverse defendant under state law. Id. (citing Badon v. RJR Nabisco, Inc., 236 F.3d 282, 389 n. 10. (5th Cir. 2000)). “The burden is on the removing party; and the burden of demonstrating improper joinder is a heavy one.” Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011) (citing Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999)). As a preliminary matter, pursuant to Cavallini and Pullman, the Court only considers Zimmerman’s state court petition on this motion for remand because the amended pleading (docket no. 4-1) was not on file before removal.

To prevent remand, Defendants must meet their heavy burden showing Zimmerman has no reasonable basis for any of his claims against Kronk. Zimmerman asserts eight causes of action in his state court petition: (1) breach of contract, (2) violations of section 17.50(a) of the Deceptive Trade Practices — Consumer Protection Act, (3) violations of section 17.46(b) of the DTPA, (4) violations of Chapter 541 of the Texas Insurance Code, (5) violations of Chapter 542 of the TIC, (6) breach of duty of good faith and fair dealing, (7) negligence and gross negligence, and (8) negligent misrepresentation. (Docket no. 1-4 at 4-11). Of these causes of action, Zimmerman only clearly asserts the breach of duty of good faith and fair dealing, and the negligence and gross negligence claims against Kronk.

A. Breach of Duty of Good Faith and Fair Dealing

Zimmerman’s claim for breach of duty of good faith and fair dealing states, in relevant part:

. . . Plaintiff would show that a special relationship exists between Defendants and Plaintiff such that Defendant owed its insured a duty to deal fairly and in good faith. Plaintiff would further show that Defendants breached this duty owed to Plaintiff and as such, he is entitled to damages.(Doc. 1-4, 9). Despite the inconsistent use of plural and singular constructions in the petition, the Court construes this as a claim for breach of duty of good faith and fair dealing against both Travelers and Kronk. (See docket no. 3 at 7; Docket no. 1-4 at 9-10) (both Zimmerman and Travelers agree that this cause of action has been stated against Kronk).

In Texas, a duty of good faith and fair dealing does not exist in the insurance context without a contract creating a special relationship between the parties. Natividad v. Alexsis, Inc., 875 S.W.2d 675, 678 (Tex. 1994) (“[I]n an insurance context, the duty of good faith and fair dealing arises only when there is a contract giving rise to a `special relationship.'” And “without such a contract there would be no special relationship and hence, no duty of good faith and fair dealing.” (emphasis original)); Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 262 (5th Cir. 1995) (under Texas Law, “the existence of a contract, giving rise to a special relationship, is a necessary element of the duty of good faith and fair dealing.” (internal quotations omitted)). Insurance adjusters typically do not sign any contract with the insured; therefore, adjusters do not typically owe a duty of good faith and fair dealing to the insured. Great W. Inn v. Certain Underwriters at Lloyds of London, No. CIV.A. H-11-320, 2011 WL 1157620, at *5 (S.D. Tex. Mar. 24, 2011) (“Under Texas law, an independent insurance adjuster owes no duty of good faith and fair dealing to the insured.”). Thus, Texas generally does not recognize a cause of action for breach of good faith and fair dealing against insurance adjusters. Crocker v. Am. Nat’l Gen. Ins. Co., 211 S.W.3d 928, 937 (Tex.App.-Dallas 2007, no pet.); see also Natividad, 875 S.W.2d at 678.

Here, there are neither allegations nor indications in the record that Kronk signed the insurance contract between Zimmerman and Travelers. (See docket no. 2-2 at 2-3, 8-9). Zimmerman does not allege he and Kronk are both signatories to any contract. No privity of contract exists between Zimmerman and Kronk, so there is no special relationship between them and no duty owed by Kronk. See Natividad, 875 S.W.2d at 678. Therefore, Zimmerman has no reasonable basis for a claim for breach of duty of good faith and fair dealing against Kronk. Id.; see also Great W. Inn, 2011 WL 1157620 at *5.

B. Negligence and Gross Negligence

Zimmerman’s claim for negligence and gross negligence states, in relevant part:

. . . Defendant TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY and COREY KRONK’s actions surrounding the denial of coverage for Plaintiff’s claim, which loss was covered by the insurance policy purchased by Plaintiff, resulted in the aforementioned damages.With every contract, there is a common-law duty to perform it with care, skill, reasonable expedience, and faithfulness. Accordingly, Defendants were under a duty to act with reasonable skill and diligence in performing pursuant to the insurance contract so as not to injure Plaintiff by their performance. Here, Defendants failed to act with reasonable skill and diligence in performing their duties under the insurance agreement, which resulted in Plaintiff’s damages.Finally, the duty not to make misrepresentations or to make certain disclosures during the contract formation stage is imposed by law independent of a contract and thus, is actionable. Here, Defendants failed to disclose various material facts. For example, Defendants failed to disclose that Plaintiff would limit payment of Plaintiff’s claim under false pretenses for a claim that supposedly was covered under the policy.Defendants breached the above described duties and . . . [a]s a result of Defendant’s negligence and gross negligence, Plaintiff has suffered damages.(Docket no. 1-4 at 9-10) (emphasis original). As Kronk is specifically named in this cause of action (unlike all others) and “Defendants,” plural, is consistently used throughout, this cause of action is definitely asserted against Kronk. The Court identifies three possible theories of negligence that Zimmerman may be asserting against Kronk, though Zimmerman does not specify them in the petition or motion for remand: (1) a claim of negligence for violation of contractual duties, (2) a claim of negligent claims handling, or (3) a claim of negligence based on some other duty from common or other law. There is no reasonable basis for any of these three versions of the claim.

1. Negligence for Violation of Contractual Duties

In the second paragraph of Zimmerman’s negligence claim, he states that “Defendants failed to act with reasonable skill and diligence in performing their duties under the insurance agreement (contract).” (Docket no. 1-4 at 10). Therefore, Zimmerman’s claim against Kronk may be construed as one for negligence for violation of duties imposed by contract. However, as stated above, no contract exists to which Zimmerman and Kronk are both parties. Without privity of contract, Kronk had no contractual duties to Zimmerman. Kronk cannot be held liable for negligently violating duties he did not have. See Natividad, 875 S.W.2d at 678; see also Great W. Inn, 2011 WL 1157620 at *5.

Next, in the third paragraph of this section, Zimmerman claims that Defendants violated “the duty not to make misrepresentations or to make certain disclosures during the contract formation stage.” (Id.) First, even if an independent insurance adjuster could be held liable for the violation of such a duty, Zimmerman has pled no set of facts on which such a theory may be upheld. Jewel v. City of Covington, GA., 425 F.2d 459, 460 (5th Cir. 1970) (“General [conclusory] allegations unsupported by facts are insufficient to constitute a cause of action.”); Waters v. State Farm Mut. Auto Ins. Co., 154 F.R.D 107, 108 (S.D. Tex. 1994) (“Failure to specify a factual basis for recovery against a non-diverse party constitutes a failure to state a claim and fraudulent joinder of that party.”). Zimmerman has not alleged that Kronk was in any way personally involved during the “contract formation stage.” (Docket no. 1-4 at 10). And given the opportunity to elaborate or more clearly argue Kronk’s involvement in the contract’s formation in his motion for remand,2 Zimmerman failed to do so. (See docket no. 2 at 6-8). Further, Zimmerman’s allegations in that paragraph are made against “Defendants” generally and do not identify any specific conduct against Kronk individually. See Holmes v. Acceptance Cas. Ins. Co., 942 F.Supp.2d 637, 648 (E.D. Tex. 2013) (“[P]laintiff’s general allegations against `Defendants,’ without inserting facts attributed to the adjuster individually, d[o] not provide a reasonable basis for recovery from the adjuster.”). As such, Zimmerman’s allegations are entirely conclusory in nature and do not provide a reasonable basis on which he may recover against Kronk for negligently violating a contractual duty.

2. Negligent Claims Handling

In the first paragraph of Zimmerman’s negligence complaint, he mentions “COREY KRONK’s actions surrounding the denial of coverage for Plaintiff’s claim.” (Docket no. 1-4 at 9-10) (capitalization original). Based on this language, Zimmerman’s negligence claim against Kronk may be construed as one for negligent claims handling because all of Kronk’s “actions surround the denial of coverage” involve his handling of Zimmerman’s claim. (See docket no. 2-2 at 2-3). However, Texas law does not recognize a cause of action for negligent insurance claims handling. Bui v. St. Paul Mercury Ins. Co., 981 F.2d 209, 210 (5th Cir. 1994) (stating there is no negligent insurance adjusting claim in Texas); Rooters v. State Farm Lloyds, 428 F. App’x 441, 448 (5th Cir. 2011) (“Texas law does not recognize a cause of action for negligent claims handling.”) (citing Higginbotham v. State Farm Mut. Auto Ins. Co., 103 F.3d 456, 460 (5th Cir. 1997)). This rule has been applied both to insurance companies and to insurance adjusters. See Rooters, 428 F. App’x at 448 (holding that an insurance company could not be found liable for negligent claims handling); see also French v. State Farm Ins. Co., 156 F.R.D. 159, 162 (S.D. Tex. 1994) (holding that an insurance adjuster could not be held individually liable for negligent claims handling); Dear v. Scottsdale Ins. Co., 947 S.W.2d 908, 916 (Tex. App.-Dallas 1997) (Claims that an independent adjusting firm negligently investigated a claim against an insured “must also fail as a matter of law.”), overruled on other grounds by Apex Towing Co. v. Tolin, 41 S.W.3d 118 (Tex. 2001). Because there is no cause of action in Texas for negligent claims handling by adjusters, there is no reasonable basis on which Zimmerman could recover against Kronk for negligent claims handling.

3. Common Law Negligence

Finally, Zimmerman’s negligence claim may be construed as a simple common law negligence claim. “Although the Texas Supreme Court has not addressed the issue of whether an independent adjuster could be held liable for negligence separate from good faith and fair dealings, the Fifth Circuit has spoken to this issue.” Universal Cas. Co. v. Gilbert Plumbing Co., Inc., No. 4:08-2759, 2009 WL 1158844, at *5 (5th Cir. Apr. 29, 2009) (citing Bui, 981 F.2d at 209). In Bui, a boat owner alleged that the insurance adjuster who handled the owner’s claim for boat damage acted negligently in preparing the claim. 981 F.2d at 210. The Fifth Circuit upheld the district court’s dismissal of the common law negligence claim, holding that the adjuster “owed no duty to [the insured] under Texas law.” Id.; see also Universal, 2009 WL 1158844, at *5 (“[Since] the independent adjuster owes no duty to the claimant, [he] cannot be held liable for common law negligence”). The existence of a legal duty owed by the defendant to the plaintiff is one of the necessary elements of common law negligence in Texas. Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998) (“A negligence cause of action has three elements: 1) a legal duty; 2) breach of that duty; and 3) damages proximately resulting from the breach.”). Because independent adjusters, absent a contract or other special circumstances, owe no duty to the insured in Texas, they cannot be held liable for common law negligence. Bui, 981 F.2d at 210; see also Universal, 2009 WL 1158844, at *5. Texas law does not recognize a cause of action for common law negligence by the insured against independent insurance adjusters — including Kronk.

No matter how Zimmerman’s negligence claim is construed — negligent violation of contractual duties, negligent claims handling, or common law negligence — Texas does not recognize the cause of action against insurance adjusters like Kronk. As such, there is no reasonable basis for a negligence claim against Kronk. See Smallwood, 385 F.3d at 573.

C. All of Zimmerman’s Other Causes of Action

Zimmerman’s state court petition lists six other causes of action: (1) breach of contract, (2) violations of section 17.50(a) of the Deceptive Trade Practices — Consumer Protection Act (“DTPA”), (3) violations of section 17.46(b) of the DTPA, (4) violations of Chapter 541 of the Texas Insurance Code (“TIC”), (5) violations of Chapter 542 of the TIC, and (6) negligent misrepresentation. (Docket no. 1-4 at 4-11). None of these are stated against Kronk in the petition.

Zimmerman’s first cause of action for breach of contract specifically states that “TRAVELERS has committed breach of contract of insurance between the parties.” (Id. at 4). Zimmerman consistently uses “Defendant,” in the singular, to refer to Travelers throughout the breach of contract section. (Id.) Kronk is not named in that section. (Id.) In addition, the remaining five causes of action refer only to “Defendant” in the singular. Kronk is not specifically named in any of those causes of action, and Zimmerman does not argue that the singular “Defendant” refers to Kronk, not to Travelers. Instead, “Defendant,” which clearly is used to refer to Travelers from the outset of the petition in the breach of contract claim, continues to refer only to Travelers. Further, Zimmerman’s proposed amended complaint, submitted after removal, clearly recognizes the error and attempts to assert these claims against Kronk with the use of “Defendants” in the plural. (Docket no. 4-1 at 6-9). Zimmerman thereby affirms that the remaining six causes of action were not asserted against Kronk in the state court petition. For all these reasons, the Court finds that those causes of action were asserted only against Travelers, not Kronk.

Zimmerman disagrees, contending in his Opposed Motion for Remand and Motion to Amend that he asserted the TIC and DTPA claims against Kronk in the state court petition without pointing to any specific language in his petition to support his argument. (Doc. 2, 1). Instead, Zimmerman explains that, under Texas law, an insurance adjuster such as Kronk may be held liable for violations of the TIC and DTPA. (Doc. 2, 2-3). But even if insurance adjusters may be held individually liable for violating the TIC and DTPA, see Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 282-84 (5th Cir. 2007) (holding an independent insurance adjuster individually liable for violations of the TIC); Tex. Ins. Code Ann. § 541.151(2) (a “tie-in statute” expressly incorporating liability for violations of the DTPA into the TIC), the mere theoretical possibility that a cause of action may be asserted against a non-diverse defendant is not enough to require remand. Griggs v. State Farm Lloyds, 181 F.3d 694, 701 (5th Cir. 1999) (“While the burden of demonstrating fraudulent joinder is a heavy one, we have never held that a particular plaintiff might possibly establish liability by the mere hypothetical possibility that such an action could exist.”). The cause of action that might plausibly be stated must actually be asserted against the non-diverse defendant in the live petition at the time of removal. Id. Thus, though TIC and DTPA claims against Kronk are hypothetically possible, that fact is irrelevant. As shown above, Zimmerman did not actually assert those claims against Kronk in his state court petition, and Zimmerman fails to point to any language in the petition that might indicate the claims were alleged against Kronk. As the DTPA and TIC claims were not asserted against Kronk, there is no reasonable basis in the state court petition for the Court to conclude that Zimmerman might be able to recover against Kronk on those causes of action. See Griggs, 181 F.3d at 701.

Because Zimmerman cannot establish any cause of action against Kronk in the state court petition, the non-diverse party in this action, there is no reasonable basis to predict that the plaintiff might be able to recover against an in-state defendant. See Smallwood, 385 F.3d at 573. Therefore, the Court finds that Kronk was improperly joined and that this Court has diversity jurisdiction over this suit.

IV. Analysis — Motion for Leave to Amend

A court’s subject matter jurisdiction may be defeated by the addition of a non-diverse defendant.3 See Doleac ex rel. Doleac v. Michalson, 264 F.3d 470, 477 (5th Cir. 2001) (explaining that generally jurisdiction is determined at the time a suit is removed and postremoval developments to lower the amount in controversy or change the citizenship of a party will not divest jurisdiction; however, the addition of a non-diverse defendant will defeat jurisdiction). Since joinder of a non-diverse defendant has such a drastic consequence on jurisdiction, a court has discretion to permit or deny joinder. See 28 U.S.C. § 1447(e) (“If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.”).

While Federal Rule of Civil Procedure 15(a)(2) requires a court to “freely give leave to amend when justice so requires,” a district court should scrutinize a proposed amendment to add a non-diverse defendant more closely than an ordinary amendment. Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987). When an amendment will defeat jurisdiction, the court must balance the defendant’s right in “maintaining the federal forum with the competing interest of not having parallel lawsuits.” Id. at 1182. Among the factors a court should consider are: (1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether the plaintiff has been dilatory in asking for the amendment; (3) whether the plaintiff will be significantly injured if amendment is not allowed; and (4) any other factor bearing on the equities. Id. “As a plaintiff will not be `significantly injured’ by the denial of a clearly meritless claim, it is within the district court’s discretion to deny the amendment as futile if there is no reasonable basis to predict that the plaintiff will be able to recover against the non-diverse, nonindispensable party sought to be added as a defendant.” Wilson v. Bruks-Klockner, Inc., 602 F.3d 363, 368 (5th Cir. 2010). If the court permits the amendment, then it must remand to state court. Hensgens, 833 F.2d at 1182.

A. Extent to which the Purpose of the Amendment is to Defeat Federal Jurisdiction

The first Hensgens factor requires the Court to examine “the extent to which the purpose of the amendment is to defeat federal jurisdiction.” Hensgens, 833 F.2d at 1182. Bearing on this factor is whether the plaintiff knew or should have known the identity of the non-diverse defendant when the state court petition was filed. See, e.g., Rouf v. Cricket Communications, Inc., NO. H-13-2778, 2013 WL 6079255, at *2 (S.D. Tex. Nov. 19, 2013) (denying amendment after finding that plaintiffs knew about the proposed non-diverse defendants when suit was filed). If a plaintiff moves to amend shortly after removal, some courts have viewed that as evidence of a primary purpose to defeat jurisdiction. See, e.g., Gallegos v. Safeco Ins. Co. of Indiana, NO. H-09-2777, 2009 WL 4730570, at *4 (S.D. Tex. Dec. 7, 2009) (finding that a plaintiff’s filing of a motion for leave to amend and a motion for remand less than a month after removal evidenced the amendment’s principal purpose of defeating jurisdiction). Additionally, if the amendment seeks to add additional defendants after an original non-diverse defendant was found to be improperly joined, or seeks to add new claims against the improperly joined non-diverse defendant, some courts have viewed that as evidence of a primary purpose to defeat jurisdiction. E.g. Smith v. Robin America Inc., NO. H-08-3565, 2009 WL 2485589, at *5 (S.D. Tex. Aug. 7, 2009) (“Plaintiff’s efforts to avoid a federal forum by filing in state court and naming a nondiverse party against which there was no reasonable possibility of recovery, then moving to remand when the case was removed, provide some evidence that she filed the motion to add new parties who would destroy federal jurisdiction for that purpose.”). “This is an especially strong inference to make when the motion to remand is made within the same pleading as the motion for leave to amend” or after the motion to remand. Id.

Here, Zimmerman definitely knew Kronk’s identity when the state court petition was filed. Kronk was named in that petition, but for unsupportable claims. (See docket no. 1-4). The claims that Zimmerman attempts to newly assert against Kronk were available at the time of the state court petition — nothing in the proposed amendment provides new facts or legal bases unavailable to Zimmerman at the time of his initial petition. (See docket no. 4-1). Zimmerman’s motion to amend also comes shortly after the removal. The court in Gallegos considered a motion to amend that was filed less than a month after removal to be evidence of a primary purpose to defeat jurisdiction. Gallegos, 2009 WL 4730570, at *4. Zimmerman’s “Motion for Remand and Motion to Amend” was filed exactly one day short of a month from the date of removal. (Docket no. 1; Docket no. 2). His properly filed motion to amend was filed 45 days after removal and only after Travelers’ response to the motion for remand, (Docket no. 4), which the court sees as even stronger evidence that the purpose of the amendment is to defeat jurisdiction than if the motion for leave to amend had come at the same time as the motion for remand. Therefore, the inference that Zimmerman’s primary purpose in submitting his motion to amend is to defeat jurisdiction and avoid federal court is very strong. See Smith, 2009 WL 2485589, at *5.

Once it was finally attached to the motion to amend, the amended petition differed very little from the original petition except to change “Defendant” to “Defendants” in almost all cases and to address Travelers’ jurisdictional arguments. (See generally docket no. 4-1). Zimmerman’s state court petition also improperly joined Kronk initially because Zimmerman had no reasonable possibility of recovery against Kronk on the claims asserted. See Smith, 2009 WL 2485589, at *5. The first Hensgens factor therefore weighs heavily against granting Zimmerman’s motion to amend as it appears the purpose of the amendment is to defeat diversity jurisdiction.

B. Whether Zimmerman Has Been Dilatory in Asking for the Amendment

The second Hensgens factor requires the court to consider whether Zimmerman was dilatory in asking for the amendment. Hensgens, 833 F.2d at 1182. Generally, a plaintiff is not dilatory in seeking to amend a complaint when “no trial or pre-trial dates [have been] scheduled and no significant activity beyond the pleading stage has occurred.” Herzog v. Johns Manville Products Corp., NO. 02-1110, 2002 WL 31556352, at *2 (E.D. La. Nov. 15, 2002); Smith v. Robin America Inc., NO. H-08-3565, 2009 WL 2485589, at *5 (S.D. Tex. Aug. 7, 2009). Here, no scheduling order had been entered when Mr. Zimmerman sought to amend to make his additional allegations against Kronk. Nevertheless, when, as is the case here, a plaintiff’s true motive in seeking to add a defendant is to defeat jurisdiction, speed is not terribly relevant. See Adey/Vandling, Ltd. V. Am. First Ins. Co., NO. A-11-CV-1007-LY, 2012 WL 534838, at *4 (W.D. Tex. Feb. 17, 2012). Therefore, Zimmerman’s speed in attempting to amend weighs only slightly in favor of allowing his amendment.

C. Whether Zimmerman Will Be Significantly Injured if Amendment Is Not Allowed

The third Hensgens factor is whether a plaintiff will be significantly injured if amendment is not allowed. Hensgens, 833 F.2d at 1182. When considering this factor, courts look to “whether a plaintiff can be afforded complete relief in the absence of the amendment.” Lowe v. Singh, No. H10-1811, 2010 WL 3359525, at *2 (S.D. Tex. Aug. 23, 2010). Courts also consider “whether the plaintiff will be forced to litigate their action against the non-diverse defendants in a different court system, on a different timetable, subject to different procedural rules and conflicting results, and under the weight of additional financial burden.” Adey/Vandling, 2012 WL 534838, at *4. Here, assuming that Zimmerman can assert the DTPA and TIC claims against Kronk, Zimmerman may be forced to litigate in two different court systems if leave to amend is denied. This burden is mitigated, however, by the fact that Zimmerman can likely obtain full relief from Travelers alone because he seeks money damages on claims for which both Travelers and Kronk are defendants and Travelers has the deeper pockets. See Boyce v. CitiMortgage, Inc., 992 F.Supp.2d 709, 721 (W.D. Tex. 2014) (finding that this factor was neutral where the plaintiff could obtain full relief from those defendants already in the suit because no claims were unique to the new defendant). Therefore, inability to litigate against Kronk in federal court likely will not harm Zimmerman. As such, though Zimmerman may voluntarily assume litigating in multiple forums, he likely can obtain full relief without doing so. The third Hensgens factor, therefore, is neutral.

D. Any Other Factor Bearing on the Equities

Finally, the fourth Hensgens factor requires the Court to consider any other factors bearing on the equities. Hensgens, 833 F.2d at 1182. There are no other factors relevant in this case.

Examining all of the factors, the Court finds that the primary purpose of Zimmerman’s proposed amendment is to defeat jurisdiction. The first and fourth factors weigh heavily in favor of denying leave. The second factor weighs only slightly in Zimmerman’s favor. The third factor is neutral. The balance is clearly in favor of denial. Therefore, the Court denies Zimmerman’s motion for leave to amend his original petition, thus retaining jurisdiction over this case.

V. Conclusion

For the above reasons, the Court DENIES Plaintiff’s motion for remand (docket no. 2) and motion for leave to amend (docket no. 4). The Court has jurisdiction over this removed case and denies remand. Defendant Kronk is dismissed as improperly joined.

It is so ORDERED.

FootNotes

1. Zimmerman’s May 22, 2015 submission to the court contained a section entitled “Motion for Leave to Amend,” but did not attach an actual amendment. (Docket no. 2 at 8-9). According to Rule CV-7(b) of the Local Court Rules for the United States District Court for the Western District of Texas, “When a motion for leave to file a pleading, motion, or other submission is required, an executed copy of the proposed pleading, motion, or other submission shall be filed as an exhibit to the motion for leave.” Because Zimmerman did not attach an executed copy of the amended petition as an exhibit to his motion, his motion for leave to amend was improper. Zimmerman did not make a proper motion for leave to amend, with a proposed amendment included as an exhibit to the motion, until June 9, 2015. (Docket no. 4 & 4-1).

2. Or even the proposed amended complaint.

3. Zimmerman argues his amendment “merely clarifies or corrects allegations against Kronk” and thus is not “attempting to add new Defendants.” (Docket no. 4 at 6, 8). However, Kronk was improperly joined in the state court petition. Therefore, Zimmerman is adding a new defendant with his proposed amendment, which definitively asserts additional claims against Kronk.

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Insurance Coverage in Texas Long-Term Disability Plan Lawsuit– Fort Worth, Texas Insurance Defense Attorneys

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-10052
JUDY B. KILLEN,
Plaintiff-Appellant,
v.
RELIANCE STANDARD LIFE INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court for the Northern District of Texas
Before STEWART, Chief Judge, OWEN, Circuit Judge, and MORGAN, District Judge.∗
CARL E. STEWART, Chief Judge:
Plaintiff-Appellant Judy Killen (“Killen”) worked as an ultrasound technician for Covenant Health Systems (“Covenant”) beginning in 2002. She ceased working in March 2009 due to neck, shoulder, and upper back pain. She was awarded 24 months of benefits from Covenant’s long-term disability insurance plan, which Defendant-Appellee Reliance Standard Life Insurance Company (“Reliance Standard”) administered. After three internal decisions by Reliance Standard rejecting Killen’s request for extended long-term disability benefits, she brought suit in federal court. The district court held
∗ District Judge of the Eastern District of Louisiana, sitting by designation.
United States Court of Appeals
Fifth Circuit
FILED
January 8, 2015
Lyle W. Cayce
Clerk
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that Reliance Standard did not abuse its discretion in finding that Killen could perform sedentary work, and granted summary judgment to Reliance Standard. For the reasons discussed herein, we AFFIRM.
I. Factual and Procedural Background
Killen worked for Covenant from 2002 until March 2009, when she claimed that neck, shoulder and upper back pain made it too difficult for her to continue. Reliance Standard administered Covenant’s long-term disability plan (the “Plan”)—which is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.—and also paid benefits under the Plan if it found an employee disabled.
Killen collected benefits from June 2009 to June 2011. During this time, Killen separately qualified for Social Security disability benefits. To continue receiving benefits under the Plan after two years, a claimant must be “totally disabled” such that she is incapable of performing the material duties of any occupation for which she is qualified by way of education, training, or experience. Under the contract, an insured is totally disabled if “due to an Injury or Sickness he or she is capable of only performing the material duties on a part-time basis or part of the material duties on a Full-time basis.”
At the outset, Killen’s primary care physician—Dr. Steven Crow (“Dr. Crow”)—treated her. Dr. Crow treated Killen on over twenty separate occasions over the next four years and addressed a variety of maladies she experienced beginning in late 2008. In August 2010, Killen seriously injured her right shoulder by exacerbating an apparently pre-existing tear in the rotator cuff. Dr. Crow found in September 2010 that Killen “had severe pain in the shoulder since that time,” and that she was experiencing “[s]hooting pain towards her neck.” Shortly thereafter, Dr. Crow referred her to Dr. Kevin Crawford (“Dr. Crawford”), an orthopedic surgeon who determined in October 2010 that Killen had a “high-grade full-thickness rotator cuff tear” in her right 2
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shoulder. The tear was further corroborated by a radiologist’s report. In a follow-up appointment in January 2011, however, Dr. Crawford found that Killen’s “function is good, even though she has some discomfort.”
In May 2011, Reliance Standard’s internal vocational staff—evaluating the reports outlined above after Killen requested continued benefits—performed a residual employability analysis and listed five sedentary occupations appropriate for Killen. Consequently, Reliance Standard determined that, while Killen could no longer work as an ultrasound technician, she “appear[ed] capable of sedentary work activity.” Reliance Standard thereafter decided to discontinue Killen’s benefits.
This first denial apparently crossed in the mail with additional documents Killen sent to Reliance Standard, among them a treatment report from Dr. Crow and a letter from Dr. Crawford. Dr. Crow’s letter noted Killen’s “severe anxiety.” Dr. Crawford’s June 2011 letter, however, is the subject of dispute by the parties and is ambiguous about Killen’s condition. He wrote that Killen was “reasonably functional despite the findings on MRI,” but elaborated that “[w]hen I say functional, I mean that she still can get by with activities of daily living and can get her hand to her mouth and fix the back of her hair to some extent.” Reliance Standard evaluated these additional documents apparently as a courtesy; it would otherwise have had to open up a more probing internal appeal. The company again denied continued coverage.
Subsequently, through her attorney, Killen filed an internal appeal with Reliance Standard, relying on an August 2011 letter from Dr. Crow that repeatedly emphasized how she was “incapable of holding down a job” due to her medical issues. At Reliance Standard’s urging, she submitted to an in-person evaluation and independent review conducted in February 2012 by Dr. Mary Burgesser (“Dr. Burgesser”), a physical medicine and rehabilitation specialist. Dr. Burgesser, while crediting Killen’s chronic, irreparable right 3
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shoulder pain and acknowledging Dr. Crawford’s diagnosis, concluded in a detailed report that the injury did not prevent her from performing sedentary work. A subsequent (second) residual employability analysis conducted in March 2012 by Reliance Standard, this time taking into account Dr. Burgesser’s report, came to a similar conclusion as the first: Killen was capable of performing sedentary work in at least three alternative occupations. Relying on these reports, Reliance Standard denied Killen’s appeal in March 2012. In its letter, Reliance Standard noted that Killen had been receiving disability benefits from the Social Security Administration (“SSA”)—benefits which offset Reliance Standard’s own obligations to Killen—but explained that the SSA may have used a different standard in evaluating benefits decisions and also did not have Dr. Burgesser’s report when it awarded Killen benefits.
Nearly four months later, Killen sought to supplement the record with a letter from Dr. Crow adhering to the contents of his August 2011 letter: he still believed, he wrote, that Killen was “unable to work due to her medical issues.” Reliance Standard responded, notifying Killen that it had closed her file and would not supplement it with the letter.
After Killen exhausted her administrative appeals, she filed suit in August 2012 in federal court under 29 U.S.C. § 1132(a)(1)(B). In December 2013, the district court granted summary judgment to Reliance Standard.
Killen timely appealed, arguing that Reliance Standard: (1) lacked substantial evidence supporting its denial; (2) failed to give Killen a full and fair review of her claim; (3); issued a decision tainted by a conflict of interest because it both administers and pays benefits; and (4) inappropriately refused to allow Killen to introduce the letter from Dr. Crow after it made a final decision to terminate her benefits.
4
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II. Standard of Review
Review of summary judgment decisions in the ERISA context is de novo, and we apply the same standard as the district court. Schexnayder v. Hartford Life & Accident Ins. Co., 600 F.3d 465, 468 (5th Cir. 2010). Because the Plan gave Reliance Standard discretion to determine benefit eligibility as well as to construe the Plan’s terms, the court reviews Reliance Standard’s denial under the Plan for abuse of discretion. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir. 2009). “A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial.” Holland, 576 F.3d at 246 (internal quotation marks and citations omitted). “If the plan fiduciary’s decision is supported by substantial evidence and is not arbitrary and capricious, it must prevail.” Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004).
Killen argues in her briefs repeatedly that the summary judgment standard requires that the evidence and inferences drawn from that evidence be viewed in the light most favorable to her since she is the nonmovant. She points to cases reciting the boilerplate language of the summary judgment standard. However, she misapprehends the nature of appellate review of summary judgment decisions on ERISA benefits cases where the plan at issue vests discretion, as this one does, in a plan administrator.1 In that case, “[t]he fact that the evidence is disputable will not invalidate the decision; the evidence need only assure that the administrator’s decision fall [sic] somewhere on the continuum of reasonableness—even if on the low end.”
1 The parties do not dispute that the Plan vests discretionary authority with Reliance Standard. The Plan states that Reliance Standard “has the discretionary authority to interpret the Plan and the insurance policy and to determine eligibility for benefits.” 5
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Porter v. Lowe’s Cos., Inc.’s Bus. Travel Acc. Ins. Plan, 731 F.3d 360, 363–64 (5th Cir. 2013) (internal quotation marks and citation omitted).
The case on which Killen primarily relies, Baker v. Metropolitan Life Ins. Co., 364 F.3d 624 (5th Cir. 2004), is inapposite. While Baker does explain that appellate courts review district court decisions in the ERISA context de novo and draw all inferences in favor of the nonmovant, id. at 627–28, Killen’s selective citation to the case leaves out Baker’s later clarification: “when an administrator has discretionary authority with respect to the decision at issue, the standard of review should be one of abuse of discretion.” Id. at 627. A court must “give deference to the decision of the plan administrator and may not substitute its judgment for the decision of the fiduciary.” 1A Couch on Ins. § 7:59 (3d ed. 2014).
III. Discussion
A.
Killen first challenges the district court’s finding that substantial evidence supported the plan’s denial of benefits. Substantial evidence is “more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (internal quotation marks and citation omitted). Killen claims that the Plan language requires Reliance Standard to show that she can perform all of the job duties of a sedentary vocation on a full-time basis before discontinuing benefits. While it might have shown she could perform sedentary work, she argues, Reliance Standard never showed she could do so full time. Additionally, she claims the district court misconstrued the medical evidence and ignored objective documentation of her pain.
“[M]ost disputed claims for disability insurance benefits are awash in a sea of medical evidence, often of contradictory nature,” 10A Couch on Ins. § 147:33, and this case is no different. Indeed, counsel for Killen admitted as
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much at oral argument. Courts frequently hear cases, like this one, where the plaintiff’s own treating physicians generally support a finding of disability and the defendant’s vocational specialists and independent medical examiners disagree.
In Holland, for example, a former paper machine specialist who had experienced a heart attack sought long-term disability benefits. See 576 F.3d at 243. The Plan’s language closely tracked the applicable language in this case. See id. at 244. The employee’s primary care physician equivocated, but supported a finding of total disability, and a specialist’s statements about his health were ambiguous: the specialist noted that the plaintiff had serious airway damage, but was improving. Id. The administrator had a third and fourth doctor conduct a paper review of the medical records, and a fifth doctor conducted a physical examination: all three agreed that the employee was not totally disabled. See id. at 244–45. The administrator never consulted a vocational expert. Id. at 249. The internal claim for benefits was denied twice. This court held that there had been no abuse of discretion; the existence of contradictory evidence, the court noted, “does not . . . make the administrator’s decision arbitrary. Indeed, the job of weighing valid, conflicting professional medical opinions is not the job of the courts; that job has been given to the administrators of ERISA plans.” Id. at 250 (internal quotation marks and citation omitted); accord Wade v. Hewlett-Packard Dev. Co., 493 F.3d 533, 540–41 (5th Cir. 2007), abrogated on other grounds by Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (upholding a denial of benefits where plaintiff’s two treating physicians supported a disability finding but an examining neurophysiologist in a separate assessment found otherwise).2
2 There is no obligation to weigh treating physicians’ opinions any differently than those of other doctors or specialists. The Supreme Court recently clarified that “courts have 7
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When we find an abuse of discretion, the discrepancies between the facts and the administrator’s findings are often stark. In Lain v. UNUM Life Ins. Co. of Am., a claimant had experienced serious chest pains and esophageal problems documented by multiple treating physicians. See 279 F.3d 337, 340–42 (5th Cir. 2002), overruled on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115–19 (2008). Based on two internal reviews of the claimant’s medical files—one of which seemed to actually substantiate the individual’s complaints—and without an independent physical examination,3 the administrator denied benefits. See id. at 341–42. This court found an abuse of discretion, noting that there was a “complete absence in the record of any ‘concrete evidence’ supporting [the administrator’s] determination.” Id. at 347.
In this case, substantial evidence supported Reliance Standard’s decision to deny long-term disability benefits to Killen. While there is evidence in the record to support Killen’s claim for disability—which the district court recognized—there is also more than enough evidence supporting a denial to insulate the decision from reversal, particularly under our narrow review for abuse of discretion.
First, Reliance Standard’s vocational expert and examining physician provided sufficient evidence—including evidence of Killen’s ability to perform full-time sedentary work—to justify the denial. A vocational expert employed by Reliance Standard identified between three and five sedentary jobs Killen could perform. Additionally, Dr. Burgesser wrote in her report that Killen was
no warrant to require administrators automatically to accord special weight to the opinions of a claimant’s physician; nor may courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician’s evaluation.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
3 ERISA does not mandate an independent medical examination prior to a denial. See, e.g., Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 91 & n.3 (2d Cir. 2009) (collecting cases). 8
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“capable of performing at a sedentary work capacity . . . . The sedentary work would involve sitting most of the time and walking or standing for brief periods.” On a separate form, Dr. Burgesser listed a series of activities that Killen could perform “on a regular basis in an 8-hour workday.” The form noted that Killen could sit “frequent[ly],” and that she could “occasional[ly]” stand, walk, climb stairs, and drive. Contrary to Killen’s position that Reliance Standard never showed she could perform full-time work, these findings—taken together—demonstrate that Killen could perform full-time work.
Second, Killen’s own treating physicians equivocated at different times about the extent of her disability, even after the rotator cuff tear. Though her primary care physician ultimately concluded that she was totally disabled, her orthopedic surgeon’s reports are ambiguous at best on the issue. Indeed, in a follow-up appointment to address her right shoulder rotator cuff tear, he stated that her “function is good, even though she has some discomfort.”
The evidence in this case is comparable to that presented in Holland and Wade. In both of those cases—as in this one—there were conflicting medical opinions, with the plaintiffs’ treating physicians generally supportive of a finding of disability and the defendants’ internal reviews or independent examining physicians determining otherwise. See Holland, 576 F.3d at 244–45; Wade, 493 F.3d at 535–37. As the district court here acknowledged, it is the role of the ERISA administrator, not the reviewing court, to weigh valid medical opinions. See Holland, 576 F.3d at 250; Wade, 493 F.3d at 541. And unlike in Lain, it cannot be said in this case that there is a “complete absence in the record of any ‘concrete evidence’” supporting a denial. Lain, 279 F.3d at 347. Reliance Standard’s decision was supported by substantial evidence.4
4 Killen argues also that some of the district court’s discussion of statements she made to her physicians—for example, telling Dr. Crow that she wanted to get on disability—
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B.
Killen next argues that Reliance Standard failed to provide a full and fair review of her claim because (1) the company did not provide sufficient evidence in support of its initial May 2011 denial of benefits and (2) the company brought forward its strongest evidence of Killen’s continued ability to perform full-time sedentary work during the final appeal without giving her a meaningful opportunity to respond.5
When denying claims, ERISA-covered employee benefit plans must: (1) provide adequate notice; (2) in writing; (3) setting forth the specific reasons for such denial; (4) written in a manner calculated to be understood by the participant; and (5) afford a reasonable opportunity for a full and fair review by the administrator. Wade, 493 F.3d at 540 (citing 29 U.S.C. § 1133).
Killen’s first argument is foreclosed by our decision in Wade. In Wade, the administrator failed to comply even with the basic requirements of § 1133 during its initial internal review. While we found that the administrator’s errors at least arguably reflected a failure to substantially comply with ERISA and its accompanying regulations, we stated that “[t]he statute and regulations do not require compliance with Section 1133 at each and every level
improperly contributed to its substantial evidence finding. Killen is correct that some of these statements are not especially germane to the substantial evidence inquiry, but the district court’s mere mention of those details, particularly in light of its recognition of the importance of the opinions of Dr. Burgesser and the vocational analyst to Reliance Standard’s denial, does not disturb our holding that substantial evidence supported the denial. Killen’s argument that neither Reliance Standard nor the district court considered the objective reports of her pain are also belied by the record. Both the district court and Reliance Standard’s independent medical examiner acknowledged Killen’s pain.
5 Killen, in her briefing, alternatively characterizes these alleged ERISA violations as “procedurally unreasonable.” But the doctrine of procedural unreasonableness is a “separate concept that is a subset of our conflict of interest analysis.” Truitt v. Unum Life Ins. Co. of Am., 729 F.3d 497, 509 n.4 (5th Cir. 2013). 10
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of review of a Plan’s internal claims processing,” and found that the claimant had been provided a full and fair review. See id.
Here, by contrast, Reliance Standard substantially complied with ERISA at every step, including its initial denial. In its May 2011 initial written denial, Reliance Standard addressed: (1) medical records about Killen’s right shoulder injury, crediting her right rotator cuff tear but highlighting Dr. Crawford’s observation that her function was “good even though you have discomfort”; (2) the myriad medical issues—unrelated to the right shoulder problem—that Killen experienced, including those related to her neck and shoulder pain, heart problems, and depression; and (3) the internal vocational rehabilitation specialist’s finding based on submitted records that “while unable to work in your normal occupation, you appear capable of sedentary work activity.” Killen’s view that these findings do not permit the inference that she could perform full-time sedentary work takes too narrow a view of the evidence.
Killen also argues that Reliance Standard unfairly brought forward its strongest evidence—the independent medical examiner’s report—only in the final stage of her appeal, thereby preventing her from engaging in the “meaningful dialogue” contemplated by § 1133. See Lafleur v. La. Health Serv. & Indem. Co., 563 F.3d 148, 154 (5th Cir. 2009).
Circuits that have addressed the issue have generally determined that ERISA does not guarantee claimants an opportunity to rebut an independent medical examination report generated during an appeal prior to a denial of benefits. See Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161, 1167 (10th Cir. 2007) (holding that ERISA and its implementing regulations do “not require a plan administrator to provide a claimant with access to the medical opinion reports of appeal-level reviewers prior to a final decision on appeal”); see also Pettaway v. Teachers Ins. & Annuity Ass’n of Am., 644 F.3d 427, 436 (D.C. Cir. 2011) (same); Midgett v. Washington Grp. Int’l Long Term Disability 11
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Plan, 561 F.3d 887, 895–96 (8th Cir. 2009) (same); Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241, 1245–46 (11th Cir. 2008) (same).
Citing Metzger, this court in an unpublished opinion adopted a similar stance. Shedrick v. Marriott Int’l, Inc., 500 F. App’x 331, 339 (5th Cir. 2012) (“Further, there does not appear to be relevant case law or regulations for the proposition that Aetna violated ERISA’s full and fair review requirement by failing to consider evidence submitted after [the claimant’s] appeal was closed or by not allowing [the claimant] to rebut the report by Dr. Wallquist.”).
Killen does not dispute the force of this precedent. Rather, she contends that it is inapplicable where the first-stage denial did not provide evidence that she could call into question. But here, even assuming arguendo that Reliance Standard did not provide Killen with sufficient evidence justifying the initial denial for her to rebut, the underlying justification for each denial remained constant. Each letter rejected Killen’s claim for benefits on the same ground: her ability to perform sedentary work. This takes the facts out of our line of cases where the insurer impermissibly uses a “bait-and-switch” tactic, providing one justification at the first stage and then, during the review, changing the grounds for the denial. See, e.g., Rossi v. Precision Drilling Oilfield Servs. Corp. Emp. Benefits Plan, 704 F.3d 362, 366 (5th Cir. 2013); Robinson v. Aetna Life Ins. Co., 443 F.3d 389, 394 (5th Cir. 2006) (“Aetna’s shifting justification for its decision and failure to identify its vocational expert meant that Robinson was unable to challenge Aetna’s information or to obtain meaningful review of the reason his benefits were terminated.”).
While the information provided in Dr. Burgesser’s report might have further bolstered Reliance Standard’s position, there was nothing in the report that altered the company’s original position. Therefore, Killen was not “sandbagged” by a report containing unanticipated factual findings. She was on notice beginning with the initial May 2011 denial that she needed to bring 12
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forward evidence of her inability to perform sedentary work. Reliance Standard provided her an adequate opportunity to do so.
C.
We turn to Killen’s argument that Reliance Standard’s decision was “procedurally unreasonable”—that is, that the company’s conflict of interest as both the administrator of the Plan and the payor of benefits tainted its denial—because of its failure to adequately distinguish the SSA’s disability finding.
The Supreme Court has held that a “plan administrator [who] both evaluates claims for benefits and pays benefits claims,” as Reliance Standard does here, has a conflict of interest. See Glenn, 554 U.S. at 112. But the Court purposefully avoided enunciating a precise standard for evaluation of the impact of the conflict. See id at 119. In Glenn, and in a post-Glenn case in this court with similar facts, Schexnayder, the defendant-administrators denied disability benefits, but not before the claimants successfully applied for disability benefits before the SSA. See Glenn, 554 U.S. at 118; Schexnayder 600 F.3d at 471. The administrators financially benefitted from those decisions (payments from the SSA offset their own obligations) and then ignored the agency’s findings of total disability entirely; the result was a reversal of those benefits decisions. See Glenn, 554 U.S. at 118; Schexnayder 600 F.3d at 471.
Here, by contrast, Reliance Standard twice addressed the SSA benefits awarded to Killen, once distinguishing its denial in detail. Compare Schexnayder, 600 F.3d at 471 n.3 (“It is the lack of any acknowledgement which leads us to conclude that Hartford’s decision was procedurally unreasonable.”). We find no procedural unreasonableness on these facts suggesting that we should accord the conflict of interest factor any special weight.
13
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D.
Killen’s final argument is that Reliance Standard improperly failed to allow her to supplement the administrative record with a letter from Dr. Crow submitted four months after the third denial.
When assessing factual questions in benefits cases, “a long line of Fifth Circuit cases stands for the proposition that . . . the district court is constrained to the evidence before the plan administrator.” Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 299 (5th Cir. 1999) (collecting cases), overruled on other grounds by Glenn, 554 U.S. at 112. Before filing suit, “the claimant’s lawyer can add additional evidence to the administrative record simply by submitting it to the administrator in a manner that gives the administrator a fair opportunity to consider it.” Id. at 300. Such a “fair opportunity” must come in time for the administrator to “reconsider his decision.” Id.
Here, the file was already closed and Killen had exhausted two internal appeals. We cannot say that such a late submission of evidence, only four weeks before Killen filed suit, gave Reliance Standard the “fair opportunity” contemplated by Vega. Although Dr. Crow rebuts Dr. Burgesser’s opinion directly in the letter, he does so by repeating a position he had already taken. Indeed, he explained in the supplemental letter that “nothing has really changed in her condition.” The letter, therefore, would not have changed the outcome here. Cf. Keele v. JP Morgan Chase Long Term Disability Plan, 221 F. App’x 316, 320 (5th Cir. 2007) (“We need not decide this question of Vega’s precise requirements today, because we conclude that the documents in dispute do not change the disposition of the case.”). We decline to find an abuse of discretion in Reliance Standard’s decision not to supplement the record, and we find no fault in the district court’s choice not to consider the letter.
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IV. Conclusion
For the foregoing reasons, we AFFIRM the district court’s decision granting summary judgment to Reliance Standard on the ground that it did not abuse its discretion in denying Killen long-term disability benefits. 15
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Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

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Biennial Report of the Texas Department of Insurance Non Subscriber Statistics–Fort Worth, Texas Non Subscriber Lawyers

The Biennial Report of the Texas Department of Insurance to the 83rd Legislature , released December 2012 by the Texas Department of Insurance, reports fewer Texas employers are currently opting to leave the state’s workers’ compensation system. According to the report prepared for the Texas legislature, lower workers compensation insurance premiums and an increased availability of workers compensation health care networks have led to fewer employers opting out of the system. “The percentage of Texas employers that are nonsubscribers to the workers compensation system decreased to 33 percent in 2012 — the second-lowest percentage since 1993 (an estimated 113,000 employers in 2012).” In 1993, 44 percent of Texas employers were non-subscribers. The report also noted a reversal of the trend of larger employers choosing to opt out of the Texas workers’ compensation system after 2008. The non-subscription rates among large employers fell from 26 percent in 2008 to 15 percent in 2010 and 17 percent in 2012.

 

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

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The Enforcement Program of EEOC–Fort Worth, Texas Employment Law Attorneys

Private Sector Enforcement Program: Providing quality services that are fair and prompt for both employees and employers in our administrative processing system is vital to our mission. In FY 2009, we received 93,277 private sector charges of discrimination. We also received 2,728 charges through net transfers from state and local Fair Employment Practices Agencies (FEPAs). We achieved 85,980 resolutions, with a merit factor resolution rate of 20.3%. (Merit factor resolutions include mediation and other settlements and cause findings, which, if not successfully conciliated, are considered for litigation.) Through our administrative enforcement activities, we also secured more than $294.2 million in monetary benefits. Overall, we secured both monetary and non-monetary benefits for more than 17,491people through our charge processing. We had a pending inventory of 85,768 charges at the end of the fiscal year. [See Enforcement and Litigation Statistics]

Federal Sector Enforcement Program: In our federal sector enforcement role, the EEOC is responsible for providing hearings and appeals after the initial processing of the complaints by each individual federal agency. Unlike our responsibilities in the private sector, we do not process complaints of discrimination for federal employees. In the federal sector, individuals file complaints with their own federal agencies and those agencies conduct a full and appropriate investigation of the claims raised in the complaints. Complainants can then request a hearing before an EEOC administrative judge. In FY 2009, we received a total of 7,277 requests for hearings. Additionally, we resolved a total of 6,779 complaints and secured more than $44.5 million in relief for parties in these complaints.

The EEOC also adjudicates appeals of federal agency actions on discrimination complaints and ensures agency compliance with decisions issued on those appeals. During FY 2009, the EEOC received 4,745 requests for appeals of final agency actions in the federal sector.  [See Annual Report on the Federal Work Force]

Mediation

Private Sector Mediation Program: The EEOC’s mediation program has been very successful and has contributed to the ability, over the past few years, to better manage our growing inventory and resolve charges in 180 days or fewer. In FY 2009, the EEOC’s National Mediation Program secured 8,498 resolutions, and we obtained more than $121.6 million in monetary benefits for complainants from mediation resolutions.

Participant confidence in our program is high, with our FY 2009 figures reflecting that 96% of all participants would return to EEOC’s Mediation Program in the future. We believe this high confidence level helps with our continuing efforts to convince parties to charges, particularly employer representatives, of the value of the mediation approach.

Although participants almost uniformly view the mediation program favorably, the percentage of employers agreeing to mediate is considerably lower than the percentage of charging parties agreeing to mediate. As part of our effort to increase the participation of employers in the mediation program, we have encouraged employers to enter into Universal Agreements to Mediate (UAMs). These agreements reflect the employer’s commitment to utilize the mediation process to resolve charges.

Many employers entered into these agreements in FY 2009, resulting in a cumulative multi-year total of 1,603 UAMs (192 National/Regional UAMS and 1,411 Local UAMs).

Federal Sector Mediation Program: Using Alternative Dispute Resolution (ADR) techniques to resolve workplace disputes throughout the federal government can have a powerful impact on agencies’ EEO complaint inventories and, in turn, the Commission’s hearings and appeals inventories. Resolving disputes as early as possible in the federal sector EEO process improves the work environment and reduces the number of formal complaints, allowing all agencies, including the EEOC, to redeploy resources that otherwise would be devoted to these activities. In addition, a growing number of agencies have incorporated dispute prevention techniques into their ADR programs, further increasing productivity and reducing the overall number of employment disputes.

Data submitted by federal agencies at the close of FY 2008, the most recent data available, indicate that there were 38,898 instances of pre-complaint EEO counseling across the federal government. Of that number, the parties participated in ADR in 19,267 cases, or 49.5% of the time.

The Commission’s efforts in promoting and expanding mediation/ADR at all stages of the federal EEO complaint process also appear to be having a positive effect on federal agencies’ EEO complaint inventories.  As more agencies expand their efforts to offer ADR during the informal process, we expect to see continued decreases in the number of formal complaints filed, which will reduce costs for complainants and all federal agencies, and enable agencies to focus resources on their primary missions.

EEOC continues to actively pursue a variety of ways to assist federal agencies in improving alternative dispute resolution by identifying and sharing best practices, providing assistance in program development and improvements, providing training to federal employees and managers on the benefits of ADR, and maintaining a web page that serves as a clearinghouse for information related to federal sector ADR. We will continue to expand technical assistance efforts with agencies to encourage the development of effective ADR programs and promote ADR training among government managers and staff.

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Theft Coverage Under Texas Renter’s Insurance Policy– Fort Worth, Texas Insurance Defense Litigation Lawyers

NUMBER 13-13-00381-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
REVEREND RESHUNN D. CHAMBERS, TH.M, Appellant,
v.
AMERICAN HALLMARK INSURANCE
CO. OF TEXAS, Appellee.
On appeal from the 192nd District Court
of Dallas County, Texas.
OPINION
Before Chief Justice Valdez and Justices Rodriguez and Longoria
Opinion by Justice Rodriguez
Appellant Reverend Reshunn D. Chambers, Th.M (Chambers) appeals the trial court’s grant of summary judgment in favor of appellee, American Hallmark Insurance Co.
2
of Texas (Hallmark).1 Chambers raises three issues on appeal challenging the trial court’s grant of Hallmark’s “no cause of action” traditional motion for summary judgment and Hallmark’s special exceptions. We reverse and remand in part and affirm in part.
I. BACKGROUND
Chambers purchased a renter’s insurance policy (the Policy) from Hallmark that went into effect on February 1, 2010. The insurance policy covered the premises at 502 S.W. 16th Street in Grand Prairie, Texas. Chambers paid $252.00 in premiums on the Policy. On or about March 13, 2010, Chambers reported a loss of personal property from the residence identified on the Policy. Chambers submitted his claim for coverage with Hallmark. Hallmark claimed that the alleged theft was not a covered loss under the Policy and denied the claim.
On February 9, 2012, Chambers filed suit in the 192nd District Court of Dallas County as a pro se litigant. Chambers’s original petition purported to allege claims for negligence, violations of Chapters 541 and 542 of the Texas Insurance Code, and violations of Chapter 17 of the Texas Business and Commerce Code (DTPA).2 On March 12, 2012, Hallmark filed its original answer and special exceptions to Chambers’s petition. The trial court granted Hallmark’s special exceptions and required Chambers to replead to: 1) “provide fair notice of the specific acts and violations alleged against [Hallmark] under the Texas Insurance Code and Texas DTPA,” and 2) dismiss “any and
1 This case is before the Court on transfer from the Fifth Court of Appeals in Dallas pursuant to a docket equalization order issued by the Supreme Court of Texas. See TEX. GOV’T CODE ANN. § 73.001 (West, Westlaw through 2013 3d C.S.).
2 Chambers titled his pleadings as “complaints.” To prevent confusion we shall refer to his pleadings as “petitions” in conformity with the Texas Rules of Civil Procedure. TEX. R. CIV. P. 78.
3
all claims against [Hallmark] that constitute negligent claim handling.” Chambers was given thirty days to replead.
Chambers did not file an amended petition within the thirty days provided by the court. On June 12, 2012, Hallmark filed a motion to dismiss for want of prosecution. At the hearing on Hallmark’s motion to dismiss, the trial court gave Chambers an additional two weeks to file an amended petition in compliance with its order. Chambers then filed, on June 27, 2012, a motion to vacate the court’s order granting Hallmark’s special exceptions. The court never ruled on Chambers’s motion to vacate, and Chambers filed an amended petition on July 11, 2012. Hallmark filed an amended answer and counter-claim against Chambers alleging civil fraud, among other causes of action, and asserting the affirmative defense of fraud.
Hallmark again specially excepted to Chambers’s amended pleading. Chambers then filed a second amended petition alleging claims pursuant to the Texas Insurance Code and DTPA, and adding claims under the Texas Administrative Code pursuant to section 21.203. Hallmark filed a traditional motion for summary judgment on Chambers’s claims and on its counter-claims.
In its motion, Hallmark sought summary judgment on the basis that Chambers had failed to plead a cause of action. Hallmark also moved for summary judgment on its affirmative defense of fraud and its counter-claims for fraud. Hallmark filed summary judgment evidence consisting of Chambers’s deemed admissions, the deposition excerpts of Chambers’s family members, Chambers’s “sworn proof of loss” and “affidavit of property theft,” the general warranty deed for the premises, and an affidavit by
4
Hallmark’s attorney on attorneys’ fees. The evidence supported Hallmark’s fraud counter-claim and its affirmative defense of fraud.
After hearing the arguments of the parties, the trial court issued an order granting Hallmark’s motion for summary judgment on all grounds but fraud.3 Hallmark then non-suited its counter-claim for fraud against Chambers. The court vacated its previous order and re-issued a final judgment that disposed of all claims before the court.
This appeal followed.
II. PRESERVATION OF ERROR
Chambers complains of three issues on appeal: 1) summary judgment was not appropriate on the affirmative defense of fraud; 2) summary judgment was not appropriate on Chambers’s pleadings, and 3) the court erred when it granted Hallmark’s special exceptions on Chambers’s original petition. As a threshold matter, Hallmark contends that Chambers failed to preserve error on his appellate issues.4
In Chambers’s second issue, he is challenging the legal sufficiency of the trial court’s order granting Hallmark’s motion for summary judgment on his pleadings. The Texas Supreme Court has noted that a non-movant is not required to object to the legal sufficiency of a traditional motion for summary judgment to raise a complaint on appeal. Cimarron Hydrocarbons Corp. v. Carpenter, 143 S.W.3d 560, 562 (Tex. App.—Dallas
3 In its brief, Hallmark states that the trial court “clearly denied” summary judgment on the basis of their affirmative defense of fraud. Hallmark made the following representation in its brief: “if the [c]ourt had found in favor of Hallmark on its affirmative defense of fraud, then it would likewise have found in favor of Hallmark on the counter-claim involving fraud . . . which it clearly did not.”
4 Because Hallmark’s affirmative defense of fraud was not a ground on which the trial court based its order granting the summary judgment, there can be no error on that basis on appeal. We will not reach Chambers’s first issue.
5
2004, pet. denied) (citing McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993)). Hallmark’s contention that Chambers was required to bring forth competent summary judgment evidence misstates the burden of proof in a traditional motion for summary judgment. See TEX. R. CIV. P. 166a(b); Tello v. Bank One, 218 S.W.3d 109, 118–19 (Tex. App.—Houston [14th Dist.] 2007, no pet.); see also Medlock v. Comm’n for Lawyer Discipline, 24 S.W.3d 865, 870 (Tex. App.—Texarkana 2000, no pet.). Chambers’s issue on appeal challenging the legal sufficiency of the trial court’s grant of summary judgment is properly before this Court.5
In Chambers’s third issue, he challenges the trial court’s grant of Hallmark’s special exceptions. To preserve error, Chambers was required to object to the ruling on the special exceptions before the trial court and properly raise the issue before this Court on appeal. See Mowbray v. Avery, 76 S.W.3d 663, 678 (Tex. App.—Corpus Christi 2002, pet denied); Gomez v. Tex. Windstorm Ins. Ass’n, No. 13-04-598-CV, 2006 WL 733957, at *12 (Tex. App.—Corpus Christi March 23, 2006, pet. denied) (mem. op.); see also TEX. R. APP. P. 33.1. Chambers filed a “Motion to Vacate Order on Defendant’s Special Exception” after the court issued its order granting Hallmark’s special exceptions. Because Chambers objected to the trial court about its ruling on Hallmark’s special exceptions, we find that Chambers’s motion to vacate was sufficient to preserve error in the trial court. See TEX. R. APP. P. 33.1(c). Chambers’s third issue is properly before this Court.
5 Chambers only addresses his causes of action under the DTPA and Texas Insurance Code on appeal, therefore only those causes of action are preserved for appellate review. See Young v. City of Dimmitt, 787 S.W.2d 50, 50 (Tex. 1990).
6
III. SUMMARY JUDGMENT ON CHAMBERS’S PLEADINGS
A. Standard of Review for Summary Judgment on the Pleadings
A movant may file a motion for summary judgment that, instead of proving or disproving facts, shows the non-movant has no viable cause of action or defense based on the non-movant’s pleadings. See generally Helena Lab. Corp. v. Snyder, 886 S.W.2d 767, 768–69 (Tex. 1994) (per curiam); Hansler v. Nueces County, No. 13-99-00583-CV, 2001 WL 997350, at *2 (Tex. App.—Corpus Christi May 3, 2001, no pet.) (mem. op.) (stating that summary judgment can be used to establish that the nonmovant has not pled a viable cause of action). Summary judgment based on a pleading deficiency may be proper if a party has had an opportunity, by special exception, to amend and fails to do so, or files an additional defective pleading. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Gallien v. Washington Mut. Home Loans, Inc., 209 S.W.3d 856, 866 (Tex. App.—Texarkana 2006, no pet.). A review of the pleadings in such case is de novo, with the reviewing court taking all allegations, facts, and inferences in the pleadings as true and viewing them in a light most favorable to the pleader. Natividad, 875 S.W.2d at 699 (noting that the focus of the review is on the non-movant’s pleadings at the time of the summary judgment).
If the plaintiff, after amending its petition in response to an order sustaining special exceptions, still fails to plead a valid claim, the trial court may grant summary judgment on the pleadings. Gross v. Davies, 882 S.W.2d 452, 454 (Tex. App.—Houston [1st Dist] 1994, writ denied) (citing Greater S.W. Office Park, Ltd. v. Tex. Commerce Bank Nat’l Ass’n, 786 S.W.2d 386, 388 (Tex. App.—Houston [1st Dist.] 1990, writ denied)). When
7
a motion for summary judgment is directed solely to a petition, the reviewing court must take every factual allegation in the petition as true. Anders v. Mallard & Mallard, Inc., 817 S.W.2d 90, 93 (Tex. App.—Houston [1st Dist.] 1991, no writ). If a liberal construction of the petition to which the motion for summary judgment is directed reveals a valid claim, the judgment on the petition should be reversed. Id. We will affirm the summary judgment only if the pleadings are legally insufficient. Natividad, 875 S.W.2d at 699.
B. Applicable Law
Texas follows a “fair notice” standard for pleading, in which courts assess the sufficiency of pleadings by determining whether an opposing party can ascertain from the pleading the nature, basic issues, and the type of evidence that might be relevant to the controversy.” Low v. Henry, 221 S.W.3d 609, 612 (Tex. 2007); see also TEX. R. CIV. P. 47(a) (original pleading shall contain short statement of cause of action sufficient to give fair notice of the claim involved), 45(b) (pleading shall consist of a statement in plain and concise language of the plaintiff’s cause of action; the allegation is not objectionable “when fair notice to the opponent is given by the allegations as a whole”). “Rule 45 does not require that the plaintiff set out in his pleadings the evidence upon which he relies to establish his asserted cause of action.” Dallas Area Rapid Transit v. Morris, 434 S.W.3d 752, 760–61 (Tex. App.—Dallas 2014, pet denied) (quoting Paramount Pipe & Supply Co. v. Muhr, 749 S.W.2d 491, 494–95 (Tex. 1988)).
The purpose of the fair notice requirement is to give the opposing party information sufficient to enable it to prepare a defense. Horizon/ CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex. 2000). A court will look to the pleader’s intent “and the pleading
8
will be upheld even if some element of a cause of action has not been specifically alleged.” Morris, 434 S.W.3d at 761 (quoting Roark v. Allen, 633 S.W.2d 804, 809 (Tex.1982)).
C. Analysis
Chambers’s second issue challenges the trial court’s grant of Hallmark’s summary judgment on his pleadings. Hallmark had previously filed special exceptions complaining that Chambers failed to state a claim on which relief could be granted. Chambers amended his petition, attaching his original petition as an exhibit. At that time the court noted that Chambers’s pro se pleading was still defective and was “offensive to this [c]ourt.” The court went on to tell Chambers that his pleadings were not amended properly. Chambers was instructed to “[r]efine [his] pleadings, refile [sic] your lawsuit in a way that can sustain or overcome [Hallmark’s] challenge.”
On August 13, 2012, Chambers filed his second amended petition. This petition specifically pled the portions of the DTPA and the Texas Insurance Code that Chambers contended Hallmark violated with sufficient facts to put Hallmark on notice of the allegations against it. Additionally, Chambers complied with the trial court order and did not replead his claim for negligence. We determine that Chambers made a “good faith” effort to replead his claims to state a valid cause of action in compliance with the trial court’s order. See Humphreys v. Meadows, 938 S.W.2d 750, 753 (Tex. App.—Fort Worth 1996, writ denied) (explaining that if the plaintiff makes a good faith effort to amend after special exceptions, the defendant is required to specially except to the amended pleadings); but see Ford v. Performance Aircraft Servs., 178 S.W.3d 330, 336 (Tex. App.—Fort Worth 2005, pet. denied) (recognizing that a plaintiff’s right to cure is not
9
unlimited).
Because the trial court had previously granted Hallmark’s special exceptions, Hallmark’s motion for summary judgment was an appropriate procedural tool to address continuing deficiencies. See Friesenhahn v. Ryan, 960 S.W.2d 656, 658 (Tex. 1998). Because Hallmark did not specially except to the second amended petition we will construe the petition liberally in favor of Chambers. See Dallas Area Rapid Transit v. Morris, 434 S.W.3d 752, 761 (Tex. App.—Dallas 2014, pet. denied) (stating that “in the absence of special exceptions, a petition will be construed liberally in favor of the pleader”). We will determine whether Chambers’s live pleading states a claim upon which relief could be granted.
Chambers’s second amended petition included a section titled “Statement of Factual Allegations,” in which he pled the following relevant facts:
 Hallmark is an insurance company that writes homeowner’s and renter’s insurance policies in the State of Texas through a network of insurance company agents that are appointed as its agents. Virtually all policies sold by Defendant to homeowners or renters are single premium policies where the entire period of insurance coverage, . . . is paid for in one or more payments and policy is underwritten and placed into full force and effect.
 In selling single premium homeowner’s insurance policies, Defendant represents that if an insured’s underlying debt is paid off early or their insurance terminates, Defendant will refund the unearned portion of the homeowner’s insurance premium.
 Defendant has refused or failed to promptly refund unearned portions of the homeowner’s insurance premiums to insured and has unlawfully retained these premiums, unjustly enriching itself.
 Defendant maintains business policies and practices that require insureds to fulfill conditions not required by their insurance policies or by
10
law as a precondition to obtaining refunds of unearned homeowner’s insurance premiums paid to Defendant by insured.
 Defendant has totally failed to establish procedures that are sufficient to ensure that it will receive timely notification from claims filed by insured to the extent that the claims department had terminated homeowner’s policy when insured has initiated a claim of loss and property is no longer insured as a direct result of the loss.
 Defendant delegates premium intake and refund functions to its agents and/or claims adjusters, but Defendant grossly fail[s] to implement any meaningful audit procedures to ensure that it[s] agents and/or claims adjusters are making timely refunds owed to insureds.
Chambers also titled sections of his second amended petition “Texas Deceptive Trade Practices—Consumer Protection Act Violations” and “Texas Insurance Code Violations” where he set forth the portions of the statutes of which he was complaining.6
1. Chambers’s DTPA Claims
The facts pled by Chambers, which we take as true for the purpose of this review, alleged that Hallmark represented that unearned premiums would be returned in the event of early policy termination. For instance, Chambers alleged that Hallmark violated the DTPA by “representing that a contract agreement confers or involves rights, remedies, or obligations which it does not have, nor intend to have, or which are prohibited by law.”7 TEX. BUS. & COMM. CODE § 17.46(b)(12). Chambers alleged that he paid the premium in full and that his insurance terminated before the expiration of the policy period.
6 Chambers’s code citations contained errors; however, we do not find that the citation errors precluded Hallmark from understanding the substantive allegations against it. See, e.g., CKB & Assocs., Inc. v. Moore McCormack Petro., Inc., 809 S.W.2d 577, 586 (Tex. App.—Dallas 1991, writ denied).
7 Chambers also alleged violations of Texas Business and Commerce Code section 17.46 (b)(5). See TEX. BUS. & COMM. CODE ANN. § 17.46(b)(5) (West, Westlaw through 2013 3d C.S.) (representing that goods or services have characteristics, uses, or benefits which they do not have).
11
Chambers further alleged that Hallmark refused to refund the unearned portion of his premium in violation of the policy, and that such action was unlawful. The specific facts in the second amended petition, taken in conjunction with the alleged statutory violations, provide fair notice of Chambers’s DTPA claims. See Low v. Henry, 221 S.W.3d at 612; see also TEX. R. CIV. P. 47(a). The trial court erred in entering summary judgment on Chambers’s pleadings against Hallmark under the DTPA.
2. Claims under the Texas Insurance Code
We likewise find that Chambers’s pleadings, liberally construed, state claims for violations of the Texas Insurance Code. Chambers pled that Hallmark made misrepresentations regarding the rental policy he purchased.8 Specifically, Chambers complained Hallmark misrepresented that he would receive a refund of any unearned premiums paid on the policy. Chambers alleged Hallmark violated sections 541.051(1)(B), 541.052; and 541.061 of the Texas Insurance Code. Those statutes make misrepresentations by an insurer, directly or through advertising, actionable. See TEX. INS. CODE ANN. §§ 541.051, 052, .061 (West, Westlaw through 2013 3d C.S.). Because Hallmark moved for traditional summary judgment on the pleadings, we take the facts plead by Chambers as true and do not address the merits of his claims.
Employing a liberal reading of the pleadings—as required by the Texas Rules of Civil Procedure and case law—Chambers expressly pled that Hallmark made at least two
8 Chambers cited section 1153 of the Texas Insurance Code in his fact section discussing policy refunds. TEX. INS. CODE. ANN. § 1153.202 (West, Westlaw through 2013 3d C.S.) While we agree with Hallmark that section 1153 is wholly inapplicable to Chambers’s claims, we note that Chambers set forth sufficient facts, without reference to section 1153, to maintain his cause of action.
12
representations. First, Chambers alleged that Hallmark represented that if the insurance terminated prior to the end of the policy period, then Hallmark would refund the unearned portion of the premium paid. Chambers noted that he did not receive his refund and that Hallmark failed to ensure its representatives made timely refunds. Second, Chambers pled that Hallmark maintained business policies and practices that required insureds to fulfill conditions not required by the wording in the policies or the law in order to obtain refunds. These statements were sufficient to plead a claim under the Texas Insurance Code. We find that Chambers’s pleadings comply with the fair notice provisions and were sufficient to allow Hallmark to determine the nature, basic issues, and type of evidence relevant to the controversy. The trial court erred in entering summary judgment on Chambers’s pleadings against Hallmark under the Texas Insurance Code. See Low, 221 S.W.3d at 612.
3. Chambers’s Coverage Claim
Chambers also contends that the trial court erred in granting summary judgment on his coverage claim. Chambers’s original petition contained allegations that could have conceivably constituted a coverage claim; however, those allegations were not included in Chambers’s second amended petition. Amended pleadings supersede and supplant previous pleadings. Smith Detective Agency & Nightwatch Serv., Inc. v. Stanley Smith Sec., Inc., 938 S.W.2d 743, 747 (Tex. App.—Dallas 1996, writ denied). When Chambers amended his pleadings and did not reassert his coverage claim, he effectively non-suited that claim. See FKM P’ship v. Bd. of Regents of the Univ. of Houston Sys., 255 S.W.3d 619, 633 (Tex. 2008) (discussing non-suit by amended
13
petition). Chambers therefore did not have any pleadings before the trial court on his coverage issue, and it was not included in the summary judgment.
We sustain Chambers’s second issue as to his claims brought pursuant Chapter 17 of the Texas Business and Commerce Code and Chapter 541 of the Texas Insurance Code. We overrule Chambers’s issue as it applies to his coverage claim.
IV. SPECIAL EXCEPTIONS
By his third issue, Chambers complains that the trial court abused its discretion when it sustained Hallmark’s special exceptions to his original petition. The court ordered Chambers to 1) provide fair notice of the specific acts and violations alleged against Hallmark under the Texas Insurance Code and the DTPA, and 2) dismiss any and all claims against Hallmark that constitute negligent claim handling. Chambers did amend his pleadings to comply with the court’s order.
A. Standard of Review & Applicable Law
The purpose of special exceptions is to inform the opposing party of defects in its pleadings so it can cure them, if possible, by amendment. Auld, 34 S.W.3d at 897. The trial court has broad discretion to sustain special exceptions and order more definite pleadings as a particular case may require. See Hubler v. City of Corpus Christi, 564 S.W.2d 816, 820 (Tex. Civ. App.—Corpus Christi 1978, writ ref’d n.r.e.). The standard of review of a trial court’s dismissal upon special exceptions is de novo on the legal question of whether the pleading stated a cause of action. Krupicka v. White, 584 S.W.2d 733, 737 (Tex. Civ. App.—Tyler 1979, no writ).
The trial court has wide discretion in ruling on special exceptions and its action in
14
sustaining them, where it grants leave to amend, will not be disturbed on appeal in the absence of an abuse of discretion. Portugal v. Jackson, 647 S.W.2d 393, 394 (Tex. App.—Waco 1983, writ ref’d n.r.e.). A trial court abuses its discretion if it: 1) reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law; 2) fails to correctly analyze or apply the law; or 3) acts without reference to any guiding rules or principles. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding).
The party complaining of the pleadings must identify the particular part of the pleading challenged and point out the particular defect, omission, obscurity, duplicity, generality, or other insufficiency. See TEX. R. CIV. P. 91; Muecke v. Hallstead, 25 S.W.3d 221, 224 (Tex. App.—San Antonio 2000, no pet.). General allegations that the petition is vague, indefinite, or does not state a cause of action are not sufficient to identify the defect. Spillman v. Simkins, 757 S.W.2d 166, 168 (Tex. App.—San Antonio 1988, writ dism’d). If the special exception is not specific, it is a prohibited general demurrer and should be overruled. TEX. R. CIV. P. 90; Spillman, 757 S.W.2d at 168.
B. Analysis
Hallmark’s special exceptions were filed with its original answer. It set out the paragraphs of Chambers’s original pleading that it excepted to and identified the defective portions of the pleading. See Spillman, 757 S.W.2d at 168. Specifically, Hallmark excepted to the “Noncompliance with Texas Insurance Code: Unfair Settlement Practice and the Prompt Payment of Claims” section and the “Negligence” section of Chambers petition. See id. Hallmark requested the court order Chambers to replead to state the
15
alleged acts and omissions Hallmark committed that entitled Chambers to damages. Hallmark’s exceptions were specific and were not a prohibited general demurrer. See id.
The trial court did not abuse its discretion sustaining Hallmark’s special exceptions. We overrule Chambers’s third issue.
IV. CONCLUSION
We reverse and remand on Chambers’s DTPA and Texas Insurance Code claims and affirm as to the remainder of the judgment.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the
11th day of June, 2015.

 

 

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]

Travel and Course of Scope Issue in Texas Workers’ Compensation Lawsuit–Texas Workers’ Compensation Defense Lawyers

IN THE SUPREME COURT OF TEXAS

NO. 14-0272

SEABRIGHT INSURANCE COMPANY, PETITIONER,
v.
MAXIMINA LOPEZ, BENEFICIARY OF CANDELARIO LOPEZ, DECEASED,
RESPONDENT

ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS

Argued March 26, 2015
JUSTICE GREEN delivered the opinion of the Court, in which CHIEF JUSTICE HECHT,
JUSTICE WILLETT, JUSTICE GUZMAN, JUSTICE LEHRMANN, JUSTICE BOYD, JUSTICE DEVINE, and
JUSTICE BROWN joined.
JUSTICE JOHNSON filed a dissenting opinion.
This workers’ compensation case requires us to determine whether summary judgment
evidence conclusively established that an employee was acting in the course and scope of his
employment when he died in an automobile accident while traveling to a job site. A contested case
hearing officer for the Texas Department of Insurance, Workers’ Compensation Division, heard
evidence and determined that the employee suffered a compensable injury, and a three-member
appellate panel affirmed. The insurer sought judicial review, and the trial court granted summary
judgment for the claimant and affirmed the administrative decision. The court of appeals likewise
affirmed. 427 S.W.3d 442, 450–51 (Tex. App.—San Antonio 2014). We agree that conclusive
evidence established that the employee was acting in the course and scope of his employment at the
time of his death and affirm the court of appeals’ judgment.
I. Factual and Procedural Background
The relevant facts of this case are undisputed. Interstate Treating, Inc., a company that
fabricated and installed materials for the oil and gas processing industry, hired Candelario Lopez in
1999. 1 Interstate Treating’s primary office and fabrication department was in Odessa, Texas.
Interstate Treating provided its installation services at other, often remote, locations. Lopez resided
in Rio Grande City, Texas, with his wife, Maximina Lopez, but he never worked in the vicinity of
Rio Grande City during his employment with Interstate Treating. When Interstate Treating assigned
Lopez to work at remote job sites, Lopez made his own living arrangements—usually staying in a
motel—and Interstate Treating paid Lopez an hourly wage plus per diem for his lodging and food
expenses. Interstate Treating also would provide Lopez with a company vehicle to use at the remote
job locations, but Lopez was not paid for any time traveling to or from the job site.
In September 2007, Interstate Treating assigned Lopez to work on the installation of a gas
processing plant near Ridge, Texas—a distance the parties estimate to be 450 miles from Lopez’s
home in Rio Grande City. Although Interstate Treating expected Lopez to stay in a motel, Lopez
had full control of which motel he stayed in while working at the Ridge job site. He chose to stay
approximately forty miles from Ridge at a motel in Marlin, Texas. Interstate Treating allowed Lopez
1 Lopez worked temporary assignments for Interstate Treating. The record indicates that there were times
between temporary assignments that Lopez was not working.
2
to use a company vehicle to drive between his motel in Marlin and the Ridge job site. Interstate
Treating paid the vehicle’s insurance and provided Lopez with a credit card so that he could fuel the
vehicle. Lopez drove from his motel in Marlin to the Ridge job site every day, often allowing other
Interstate Treating employees to ride with him. Although Interstate Treating had no express policy
regarding carpooling, the use of company vehicles to transport employees to and from remote job
sites was a common occurrence. On the morning of September 11, 2007, Lopez was transporting
two other Interstate Treating employees to the Ridge job site when he died in an automobile accident.
Maximina sought death benefits from Interstate Treating’s workers’ compensation insurance
carrier, SeaBright Insurance Co. SeaBright denied coverage, taking the position that Lopez was not
acting in the course and scope of his employment at the time of the accident. Maximina then
initiated an administrative proceeding to challenge SeaBright’s denial of benefit payments. The
parties participated in a contested case hearing under Texas Labor Code section 410.151, and the
hearing officer determined that Lopez was acting in the course and scope of his employment and
ordered SeaBright to pay death benefits. A three-member appeals panel affirmed the hearing
officer’s decision.
SeaBright sought independent judicial review of the administrative decision. SeaBright’s
petition challenged four administrative determinations:
C Lopez’s work involved travel away from Interstate Treating’s premises;
C Lopez was engaged in or furthering the affairs or business of Interstate Treating at the time
of his fatal vehicle accident on September 11, 2007;
C Lopez sustained damage or harm to the physical structure of his body in the course and scope
of his employment at the time of his fatal vehicle accident on September 11, 2007; and
3
C Lopez sustained a compensable injury on September 11, 2007.
Both parties filed motions for summary judgment on the issue of whether Lopez was acting in the
course and scope of his employment at the time of the accident. The trial court granted Maximina’s
motion and denied SeaBright’s motion, affirming the administrative decision.
SeaBright appealed, and the court of appeals affirmed. 427 S.W.3d at 450–51. The court
of appeals began its opinion by noting that “[f]or an employee’s injury to be considered in the course
and scope of employment, it must (1) relate to or originate in the employer’s business, and (2) occur
in the furtherance of the employer’s business.” Id. at 447. In analyzing the first element, the court
of appeals concluded that the accident occurred during Lopez’s commute from his employerprovided
housing to the job site, in an employer-provided vehicle, and in an area of the state he
would not have been in but for his employment with Interstate Treating. Id. at 450. This evidence
of the relationship between Lopez’s travel and his employment with Interstate Treating was “so close
it can fairly be said the injury had to do with and originated in the work, business, trade, or
profession of Interstate [Treating].” Id. (citation omitted). Citing this Court’s opinion in Leordeanu
v. American Protection Insurance Co., 330 S.W.3d 239, 242 (Tex. 2010), the court of appeals held
that Lopez’s travel to the job site met the second element because such travel always furthers the
employer’s business. 427 S.W.3d at 447–48. Ultimately, the court of appeals affirmed the trial
court’s judgment, finding the summary judgment evidence established that Lopez was acting in the
course and scope of his employment at the time of the accident as a matter of law. Id. at 450–51.
4
SeaBright petitioned this Court for review. We granted the petition. 58 TEX. SUP. CT. J. 369
(Feb. 23, 2015).
II. Discussion
We review a grant of summary judgment de novo. State v. Ninety Thousand Two Hundred
Thirty-Five Dollars & No Cents in U.S. Currency ($90,235), 390 S.W.3d 289, 292 (Tex. 2013). A
party moving for traditional summary judgment has the burden to prove that there is no genuine issue
of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We review
summary judgment evidence “in the light most favorable to the party against whom the summary
judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and
disregarding contrary evidence unless reasonable jurors could not.” Mann Frankfort Stein & Lipp
Advisors, Inc., 289 S.W.3d at 848 (citing City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.
2005)). When both sides move for summary judgment and the trial court grants one motion and
denies the other, we review the summary judgment evidence presented by both sides, determine all
questions presented, and render the judgment the trial court should have rendered. Comm’rs Court
of Titus Cnty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).
“The Texas Legislature enacted the [Texas Workers’ Compensation] Act in 1913 in response
to the needs of workers, who, despite escalating industrial accidents, were increasingly being denied
recovery.” Kroger Co. v. Keng, 23 S.W.3d 347, 349 (Tex. 2000) (citation omitted). In order to
balance the competing interests of providing “compensation for injured employees while protecting
employers from the costs of litigation, the Legislature provided a mechanism by which workers
5
could recover from subscribing employers without regard to the workers’ own negligence while
limiting the employers’ exposure to uncertain, possibly high damage awards permitted under the
common law.” In re Poly-Am., L.P., 262 S.W.3d 337, 350 (Tex. 2008) (citations omitted). The Act
ultimately struck a bargain that allows employees to receive “a lower, but more certain, recovery than
would have been possible under the common law.” Kroger Co., 23 S.W.3d at 350 (citation omitted).
We liberally construe the Act in favor of injured workers to effectuate these purposes. In re Poly-
Am., L.P., 262 S.W.3d at 350.
The Act provides for employee compensation when injuries “arise[] out of and in the course
and scope of employment for which compensation is payable.” TEX. LAB. CODE § 401.011(10)
(defining “compensable injury”). While determining whether an injury is compensable may involve
other inquiries, the only issue the parties present in this case is whether Lopez was acting in the
course and scope of his employment at the time of his death. See id. §§ 401.011(10), (12);
410.302(b) (“A trial [reviewing a final decision of the appeals panel regarding compensability] is
limited to issues decided by the appeals panel and on which judicial review is sought.”). The
Legislature defined “course and scope of employment” to mean:
[A]n activity of any kind or character that has to do with and originates in the work,
business, trade, or profession of the employer and that is performed by an employee
while engaged in or about the furtherance of the affairs or business of the employer.
The term includes an activity conducted on the premises of the employer or at other
locations.
Id. § 401.011(12). We have previously stated that a similar statutory definition of “course and scope
of employment” required the injury to “(1) relate to or originate in, and (2) occur in the furtherance
of, the employer’s business.” Leordeanu, 330 S.W.3d at 241.
6
Regarding the origination element, “[a]n employee’s travel to and from work . . . cannot
ordinarily be said to originate in the [employer’s] business . . . because ‘[t]he risks to which
employees are exposed while traveling to and from work are shared by society as a whole and do not
arise as a result of the work of employers.’” Id. at 242 (quoting Evans v. Ill. Emp’rs Ins. of Wausau,
790 S.W.2d 302, 305 (Tex. 1990)). However, a distinction can be made if “the relationship between
the travel and the employment is so close that it can fairly be said that the injury had to do with and
originated in the work, business, trade or profession of the employer.” Shelton v. Standard Ins. Co.,
389 S.W.2d 290, 292 (Tex. 1965). This inquiry is satisfied if the employee’s travel was “pursuant
to express or implied conditions of his employment contract.” Meyer v. W. Fire Ins. Co., 425
S.W.2d 628, 629 (Tex. 1968) (citations omitted). Courts have generally employed a fact-intensive
analysis to determine whether an employee’s travel originated in the employer’s business, focusing
on the nature of the employee’s job, the circumstances of the travel, and any other relevant facts.
See, e.g., Tex. Mut. Ins. Co. v. Jerrols, 385 S.W.3d 619, 630 (Tex. App.—Houston [14th Dist.] 2012,
pet. dism’d); Zurich Am. Ins. Co. v. McVey, 339 S.W.3d 724, 730 (Tex. App.—Austin 2011, pet.
denied); see also Am. Home Assur. Co. v. De Los Santos, No. 04-10-00852-CV, 2012 WL 4096258,
at *4 (Tex. App.—San Antonio Sept. 19, 2012, pet. denied) (mem. op.).
The facts of this case are most similar to those of Texas Employers’ Insurance Ass’n v. Inge,
208 S.W.2d 867 (Tex. 1948). In that case, the employee, Inge, worked at a drilling site in an isolated
part of Pecos County, Texas, that was 31.5 miles from the nearest city. Id. at 867–68. Inge was paid
hourly wages while working at the drilling site, but was not paid for travel time to and from the
drilling site. Id. at 868. However, the employer expected one of its employees to transport the other
7
workers to and from the drilling site and paid that employee seven cents per mile for doing so. Id.
The employer allowed the workers to determine which employee was to drive, and the group chose
Inge. Id. The employer paid Inge the seven cents per mile, but did not pay for gasoline or vehicle
repairs or exercise control over Inge’s route, speed, manner of driving, or schedule. Id. Inge later
died in a car accident on a return trip from work. Id. The parties stipulated to the above facts, and
the trial court concluded that Inge was acting in the course and scope of his employment. Id. at 867.
We affirmed, noting that the “location of the drilling site in an uninhabited area made it essential that
[the employer] furnish transportation to his employees,” and that “this [free transportation] was an
important part of their contract of employment.” Id. at 869.
While Inge was not decided on a motion for summary judgment, we reviewed the trial court’s
application of the law to the stipulated facts de novo. See id. at 867 (“[T]he only matters in dispute
were the legal questions whether Inge, at the time of his death, was acting in the course of his
employment . . . .”); see also Amaro v. Wilson Cnty., 398 S.W.3d 780, 784 (Tex. App.—San Antonio
2011, no pet.) (reviewing a trial court’s application of the law to stipulated facts de novo); Markel
Ins. Co. v. Muzyka, 293 S.W.3d 380, 384 (Tex. App.—Fort Worth 2009, no pet.) (same); Panther
Creek Ventures, Ltd. v. Collin Cent. Appraisal Dist., 234 S.W.3d 809, 811 (Tex. App.—Dallas 2007,
pet. denied) (same); Alma Group, L.L.C. v. Palmer, 143 S.W.3d 840, 843 (Tex. App.—Corpus
Christi 2004, pet. denied) (same). “A trial court has no discretion in deciding the law or its proper
application.” Alma Group, L.L.C., 143 S.W.3d at 843 (citation omitted); accord In re D. Wilson
Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006) (orig. proceeding).
8
Here, we likewise review the application of law to the summary judgment evidence to
determine whether the relationship between Lopez’s travel and employment is so close that it can
fairly be said that his injury had to do with and originated in Interstate Treating’s work, business,
trade, or profession. See Shelton, 389 S.W.2d at 292. Our starting point is to determine what
Interstate Treating’s business was. Interstate Treating’s president testified in a deposition that, at the
time of the accident, Interstate Treating had roughly 150 employees. About half of those employees
worked at Interstate Treating’s Odessa office fabricating equipment. The other half worked on a
temporary assignment installing a gas processing plant near Ridge. The location of installation
employees was never permanent, and Interstate Treating installed equipment in multiple states.
Although Interstate Treating could have hired local employees at each temporary, remote job site,
its general practice was to hire people who had worked on previous installation jobs. From the
evidence in the record, we conclude that Interstate Treating’s business called for employing
specialized, non-local work crews in constantly changing, remote locations on temporary
assignments.
We next address the nature of Lopez’s employment. Lopez had worked on previous
installation jobs for Interstate Treating, and he was hired as a civil foreman at the temporary job site
near Ridge. His job required him to oversee the installation of all of the plant’s concrete foundations
and the placement of the plant’s equipment. While working at a temporary, remote job site like the
one near Ridge, Lopez and his coworkers were paid per diem to offset lodging and food expenses.
Although Lopez could stay at any motel he wished, Interstate Treating expected him to secure
temporary lodging rather than commute 450 miles from his home in Rio Grande City. Upon Lopez’s
9
request, Interstate Treating provided him with a company vehicle to drive to and from the job site
and paid the vehicle’s fuel and insurance expenses. Lopez was driving himself and two of his
coworkers from the motel to the Ridge job site in the company-provided vehicle when he died.
The ultimate inquiry under the origination element is to determine if the relationship between
Lopez’s travel and his employment with Interstate Treating “is so close that it can fairly be said that
the injury had to do with and originated in the work, business, trade or profession of the employer.”
Id. As discussed above, we conclude that Interstate Treating’s business called for employing
specialized, non-local work crews in constantly changing, remote locations on temporary
assignments. Interstate Treating’s business required its installation workers, like Lopez, to obtain
temporary housing and travel from that temporary housing to that temporary, remote location.
Lopez’s travel from his temporary housing to the Ridge job site and, more importantly, the risks
associated with such travel were dictated by Interstate Treating’s business model and enabled by
Interstate Treating’s provision of the vehicle and payment of per diem and other expenses. See
Meyer, 425 S.W.2d at 629 (stating that an employee’s travel injuries fall in the course and scope of
employment if the travel is “pursuant to express or implied conditions of his employment contract”).
As with the employee in Inge, who was not provided a company car or fuel expenses but who was
paid per mile to transport other employees to a remote work location, the provision of transportation
to the temporary, remote work location was an essential part of Lopez’s employment. Lopez’s travel
is more akin to those “employees such as deliverymen, messengers, collectors, and others, who by
the very nature of the work they have contracted to do are subjected to the perils and hazards of the
streets.” Smith v. Tex. Emp’rs’ Ins. Ass’n, 105 S.W.2d 192, 193 (Tex. 1937). Accordingly, we hold
10
that the relationship between Lopez’s travel and his employment “is so close that it can fairly be said
that the injury had to do with and originated in the work, business, trade or profession” of Interstate
Treating. Shelton, 389 S.W.2d at 292. Maximina conclusively established the origination element.
Regarding the furtherance element, we have recognized that “[a]n employee’s travel to and
from work makes employment possible and thus furthers the employer’s business.” Leordeanu, 330
S.W.3d at 242. Here, it is undisputed that Lopez was traveling to the Ridge job site when he died.
Lopez’s travel makes “employment possible and thus furthers” Interstate Treating’s business. See
id. Maximina conclusively established the furtherance element.
Even if an employee is engaged in actions that originate in and further the employer’s
business at the time of injury, the employee may not be acting in the course and scope of his
employment if his actions fall in one of two statutory exclusions. The phrase “course and scope of
employment” does not include:
(A) transportation to and from the place of employment unless:
(i) the transportation is furnished as a part of the contract of employment or
is paid for by the employer;
(ii) the means of the transportation are under the control of the employer; or
(iii) the employee is directed in the employee’s employment to proceed from
one place to another place; or
(B) travel by the employee in the furtherance of the affairs or business of the
employer if the travel is also in furtherance of personal or private affairs of the
employee unless:
(i) the travel to the place of occurrence of the injury would have been made
even had there been no personal or private affairs of the employee to be
11
furthered by the travel; and
(ii) the travel would not have been made had there been no affairs or business
of the employer to be furthered by the travel.
TEX. LAB. CODE § 401.011(12)(A)–(B). “[S]ubsection (A) applies to travel to and from the place
of employment,” and “subsection (B) applies to other dual-purpose travel.” Leordeanu, 330 S.W.3d
at 248 (footnote omitted). Both the origination and furtherance elements must be satisfied even if
an employee qualifies for one of the exceptions to an exclusion under subsections (A) or (B). See
id. at 244, 249; Freeman v. Tex. Comp. Ins. Co., 603 S.W.2d 186, 192 (Tex. 1980) (stating that the
exceptions to the exclusion do “not enlarge the definition of ‘course of employment’”).
Here, it is undisputed that Lopez was traveling only to his place of employment, rather than
furthering any of his personal or private affairs. Therefore, Lopez’s travel implicates the exclusion
in subsection (A) and not subsection (B). See Leordeanu, 330 S.W.3d at 248. It is also undisputed
that Interstate Treating provided Lopez with a company vehicle to drive to and from the job site and
paid the vehicle’s fuel and insurance expenses. These undisputed facts conclusively establish that
Interstate Treating paid for Lopez’s transportation. Maximina therefore conclusively established the
exception to the exclusion in subsection (A)(i). See TEX. LAB. CODE § 401.011(12)(A)(i). We
therefore hold that Lopez was acting in the course and scope of his employment at the time of the
September 11, 2007 accident.
III. Conclusion
Maximina conclusively established that Lopez’s travel to the Ridge job site originated in and
furthered Interstate Treating’s business, satisfying the statutory definition of “course and scope of
12
employment.” Because Interstate Treating furnished and paid for Lopez’s transportation, the
statutory exclusion in subsection (A) does not apply. Therefore, we hold that Lopez was acting in
the course and scope of his employment when he died, and Maximina is entitled to benefits. We
affirm the court of appeals’ judgment.
______________________________
Paul W. Green
Justice
OPINION DELIVERED: June 12, 2015
13
IN THE SUPREME COURT OF TEXAS
444444444444
NO. 14-0272
444444444444
SEABRIGHT INSURANCE COMPANY, PETITIONER,
v.
MAXIMINA LOPEZ, BENEFICIARY OF CANDELARIO LOPEZ, DECEASED,
RESPONDENT
4444444444444444444444444444444444444444444444444444
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS
4444444444444444444444444444444444444444444444444444
JUSTICE JOHNSON, dissenting.
In my view, Lopez’s death was not in the course and scope of his employment. Because the
Court holds otherwise, I respectfully dissent.
An injured employee is entitled to compensation under the Texas Workers’ Compensation
Act if “the injury arises out of and in the course and scope of employment.” TEX. LAB. CODE
§ 406.031(a)(2). As relevant to this case,
“[c]ourse and scope of employment” means an activity of any kind or character that
has to do with and originates in the work, business, trade, or profession of the
employer and that is performed by an employee while engaged in or about the
furtherance of the affairs or business of the employer. The term includes an activity
conducted on the premises of the employer or at other locations. The term does not
include:
(A) transportation to and from the place of employment unless:
(i) the transportation is furnished as a part of the contract of
employment or is paid for by the employer;
(ii) the means of the transportation are under the control of the
employer; or
(iii) the employee is directed in the employee’s employment to
proceed from one place to another place;
Id. § 401.011(12).
The definition requires two elements to be met for an injury to have occurred in the course
and scope of employment. See Leordeanu v. Am. Prot. Ins. Co., 330 S.W.3d 239, 241 (Tex. 2010).
The first is origination, which requires that the activity “has to do with and originates in the work,
business, trade, or profession of the employer.” TEX. LAB. CODE § 401.011(12). The second is
furtherance, which requires that the activity be “performed by an employee while engaged in or about
the furtherance of the affairs or business of the employer.” Id. The part of the definition that
specifically excludes injuries occurring during transportation to and from the place of employment,
commonly referred to as the “coming and going rule,” is relevant to the disposition of this case. See
id. § 401.011(12)(A)(i)-(iii).
An injury while traveling to or from the place of employment is excluded from coverage
unless one of three exceptions to the exclusion are met. Id. But proving an exception to the coming
and going rule does not mean that the travel was an activity within the course and scope of
employment, so as to render the injury compensable. See Zurich Am. Ins. Co. v. McVey, 339 S.W.3d
724, 729 (Tex. App.—Austin 2011, pet. denied). Rather, proving an exception merely prevents the
employee’s injury during the travel from being automatically excluded from coverage. See Tex. Gen.
Indem. Co. v. Bottom, 365 S.W.2d 350, 353 (Tex. 1963); McVey, 339 S.W.3d at 729. And injuries
to employees during travel to and from work generally do not originate in the employer’s business
2
because “[t]he risks to which employees are exposed while traveling to and from work are shared
by society as a whole and do not arise as a result of the work of employers.” Evans v. Ill. Emp’rs
Ins. of Wausau, 790 S.W.2d 302, 305 (Tex. 1990); see Smith v. Tex. Emp’rs’ Ins. Ass’n, 105 S.W.2d
192, 193 (Tex. 1937).
At the time of the accident, Lopez was traveling to work on State Highway 7 in a company
truck he had been granted permission to use. Thus, an exception to the coming and going exclusion
applies because the transportation was paid for by his employer, Interstate Treating, Inc. TEX. LAB.
CODE § 401.011(12)(A)(i). But unless the evidence shows that his injury met the furtherance and
origination requirements, it was not covered.
The furtherance aspect is satisfied because Lopez was on his way to the job site. See
Leordeanu, 330 S.W.3d at 242. Therefore, whether the accident originated in Interstate Treating’s
business is determinative of the course and scope issue. In making that determination, the focus is
on “whether the relationship between the travel and the employment is so close that it can fairly be
said that the injury had to do with and originated in the work, business, trade or profession of the
employer.” Id. The Court has noted several factors that reflect on whether an employee’s travel
originates in the employer’s business or work, including: (1) whether the employment contract
expressly or impliedly required the travel involved; (2) whether the employer furnished the
transportation; (3) whether the employee was traveling on a special mission for the employer; and
(4) whether the travel was at the direction of the employer, such as requiring the employee to bring
tools or other employees to work or another location. See, e.g., Am. Gen. Ins. Co. v. Coleman, 303
S.W.2d 370, 374 (Tex. 1957) (identifying that undertaking a special mission or performing a service
3
at the direction of the employer is within the course and scope of employment even if also going to
or leaving from the place of employment); Tex. Emp’rs’ Ins. Ass’n v. Inge, 208 S.W.2d 867, 868-69
(Tex. 1948) (“The substance of the arrangement was that the members of the drilling crew were
being transported to the well location free of cost to them; and this was an important part of their
contract of employment.”). No single factor is necessarily determinative, but we have said that
“[r]educed to its simplest terms, the problem is whether [the injured employee] was already working,
or was simply on his way to work, at the time of the accident.” Meyer v. W. Fire Ins. Co., 425
S.W.2d 628, 628 (Tex. 1968).
The Court relies on Meyer for the proposition that “origination” is satisfied “if the
employee’s travel was ‘pursuant to express or implied conditions of his employment contract.’” ___
S.W.3d at ___ (quoting Meyer, 425 S.W.2d at 629-30). Certainly, the Court’s statement is true, but
it does not apply to this case. In Meyer, the injured employee was a service supervisor for a home
builder. Meyer, the injured employee, frequently took calls at his home or wherever he happened
to be, and responded to them directly from there. As we explained the facts,
[Meyer’s] duties did not require him to report to the office daily or at any particular
time. Although he “liked to get by” the office once a day to pick up messages, he did
not always do so. He did not have a desk at his employer’s office, and he usually
received complaints and did his required paper work at his home.
On the day of the automobile accident and resulting injury, Meyer began the working
day at home by taking two business telephone calls from Fairview Addition
homeowners and completing some paper work in preparation for a meeting at the
office that afternoon. He testified in his deposition that he then left his home to make
service calls in a subdivision in Northeast Austin. Although he was not required to
report to his employer’s office that morning and had no duties to perform there, he
decided to drive by the office on his way to the subdivision to determine whether
there were any messages relating to service calls in Northeast Austin, so that he could
4
perform all his work in that area at one time. The automobile collision occurred
before he reached his employer’s office, and on the usual and customary route
between Meyer’s home and the office.
Meyer, 425 S.W.2d at 629. The trial court granted summary judgment to the workers’ compensation
insurer on the basis that Meyer was not in the course of his employment when he was injured in the
accident, and the court of appeals affirmed. This Court reversed and remanded on the basis that
Meyer’s duties as a service supervisor required him to travel from place to place in
order to discharge the duties of his employment. Thus there is evidence that he was
impliedly directed to travel to make his service calls on the morning of the accident,
and injuries thus sustained while furthering his employer’s business by making such
service calls would be compensable . . . .
The [evidence] supports the contention that Meyer was not on his way to [b]egin
work, or to be assigned work; but that he had already begun work and was traveling
on the streets to make service calls pursuant to his usual duties, and merely deviated
to his employer’s office to see if there were other duties to be performed in the
neighborhood of his planned service calls. Assuming that the evidence upon trial on
the merits were to establish that Meyer was not reporting to work or to be assigned
work at his employer’s office, his deviation to his employer’s office while in the
course of his usual service calls would not place him within the category of workers
driving from home to work, . . .
Id. at 630.
The differences between Meyer’s situation and Lopez’s situation are readily apparent. Meyer
did not have a fixed place to work, such as an office or particular job site. Id. at 629. Lopez did.
Meyer was not traveling to get to his work; he was traveling as part of his work. Id. at 630. Lopez
was not traveling as part of his work; he was traveling to get to his work. Meyer had already begun
work when he was injured. Id. Lopez had yet to begin work when he was injured. There is no
evidence that express or implied conditions of Lopez’s employment contract required more than that
he show up at the job site and work.
5
Traveling public roadways entails risks of accidents and injuries. Employees who travel as
part of their duties are at risk of being injured during the travel, whereas they would not have that
risk if they worked at a fixed place of employment. See Smith, 105 S.W.2d at 193. Even though the
risk of traffic injuries is qualitatively the same as to both employees traveling to or from work and
those employees whose job duties require travel, the latter employee’s risk of traffic injury is in
addition to the risk of merely going to and from work that all employees share. Plus, travel by
employees as part of their job duties clearly would be in the course and scope of employment . But
Lopez had not yet begun work at the time of the accident. This risk of injury to which he was
exposed on the morning of the accident was the same as any other person traveling on public roads
to reach a job site. The duties of his job did not create the chances of his being injured. And the fact
that he was going to work from a temporary residence in Marlin does not change that. Whether he
was going to work from his home in Rio Grande City to a job site forty miles away or traveling forty
miles to Interstate Treating’s job site from his temporary residence in Marlin, the risk of injury to
which Lopez was exposed under the facts of this case is the same: the risk of injury in a traffic
accident on a public roadway while on the way to begin work. That is not a risk covered by
SeaBright Insurance’s policy of workers’ compensation insurance.
The Court’s reliance on Texas Employers’ Insurance Association v. Inge, 208 S.W.2d 867
(Tex. 1948), is also misplaced. There the employer paid $0.07 per mile for an employee to transport
himself and other employees to a remote drill site, although the employees determined which of them
would drive. Inge, 208 S.W.2d at 868. The drill site was remote, housing was not available nearby,
and the company offered free transportation to its employees as an employment incentive. See id.
6
at 868-69. Further, the existing wartime conditions necessitated employer-provided transportation
as the only practical manner to secure employees in the remote location. Id. at 869. In Lopez’s case,
however, there were motels near the Ridge job site, and Lopez’s supervisor even asked Lopez why
he was staying so far from the site.
Moreover, it was not Interstate Treating’s policy to provide its employees with off-site
transportation as an employment incentive for field projects. As noted previously, the company
merely acquiesced to Lopez’s request to use a company truck to travel to and from work. Interstate
Treating did not initiate Lopez’s use of the truck by offering it to him. No evidence suggests that
Interstate Treating explicitly or implicitly required Lopez to transport other workers to the job site,
nor is there evidence that Interstate Treating promised other employees free transportation by means
of the truck Lopez was given permission to use. Nothing in the record suggests that Interstate
Treating had to offer transportation incentives to its field employees in order to secure or retain their
employment.
The Court says that Interstate Treating’s business model calls for extended-duration field
work away from employees’ residences, so Lopez’s travel was effectively dictated by Interstate
Treating. __ S.W.3d __. However, where the employee is traveling to a fixed-location job site on
public roads, regardless of whether the employee leaves from a temporary or permanent residence,
the risk is the same—the ordinary risks associated with highways and roads. There is no meaningful
distinction between the two. This situation is not analogous to those instances where the duties of
the job itself require travel, such as travel by delivery and service workers.
7
Additionally, while the Court credits Interstate Treating’s payment of a per diem as evidence
of a close relationship between travel and the employment, merely increasing a worker’s pay through
a per diem does not expand workers’ compensation coverage to include ordinary risks of traveling
to and from a job site. A per diem is simply a form of compensation, and in Lopez’s case it was not
related to commuting. As the record reflects, the per diem was for temporary housing and meal
expenses. The type of lodging he rented, the location of the lodging, and the types of food he ate
were not matters dictated by Interstate Treating. And to the extent the lodging was distant from the
job site, exposing Lopez to increased traffic during his commute to and from work, the choice of
how far he had to drive to get to work was his.
Workers’ compensation insurance is not life insurance. Nor is it all-risk accident insurance.
It is insurance covering work-related injuries. While tragic, Lopez’s death under these circumstances
did not originate in his employment duties for Interstate Treating. Rather, it originated in the
ordinary, usual risks all workers assume when they travel to and from fixed work locations.
I would hold that the record conclusively proves that the requisite nexus between the travel
and Lopez’s employment duties did not exist, and Lopez was not injured in the course and scope of
his employment. I would reverse the judgment of the court of appeals and render judgment for
SeaBright Insurance Company.
________________________________________
Phil Johnson
Justice
OPINION DELIVERED: June 12, 2015

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