El Paso Court of Appeals Tries to Detangle Parties’ Prior “Settlement”
The El Paso Court of Appeals has determined that a carrier’s resolution of a disputed issue involving the proper impairment rating to be assigned will not preclude a carrier from later disputing extent of injury. In addition, the court has reaffirmed the well settled rule that judicial review of extent-of-injury disputes should be conducted under a modified de novo standard of review.
In Croysdill v. Old Republic Insurance Co., (No. 08-15-00179-CV, May 25, 2016), the claimant suffered a compensable lower back injury while unloading a water heater from a trailer. The claimant challenged his impairment rating in a lawsuit filed in an El Paso District Court. Thereafter, the parties “settled” that dispute and entered into a “Release of All Claims and Indemnity Agreement.” In that document, the parties agreed that “the 21% impairment rating as diagnosed by Dr. William Leff as resulting from the injury of October 14, 1997 is the impairment rating attributable to the work-related injury of Robert Croysdill.” Under the terms of the “Release” the claimant received a lump sum payment of $18,877.98 in compensation benefits, but the parties agreed that the “Release” did not limit or terminate Croysdill’s right to medical benefits under Section 408.021 of the Texas Labor Code.
Several years later, the carrier disputed whether the claimant’s ongoing medical treatment and medication was reasonable, necessary, and related to the compensable injury. A Division hearing officer found that the carrier had accepted a lumbar sprain/strain as a result of the compensable injury, and the claimant had failed to prove that the compensable injury extended to and included the diagnoses that were in dispute.
The claimant filed suit for judicial review of the hearing officer’s decision. His pleadings also included a common law claim that the carrier had breached the “Release”. The carrier filed a traditional motion for summary judgment alleging that the hearing officer’s decision was supported by substantial evidence and that the claimant failed to meet his burden of proof because he failed to offer any expert testimony that the disputed conditions were caused by the compensable injury. Claimant filed a response to the carrier’s motion and also moved for summary judgment on both his judicial review and common law claims. The carrier did not move for summary judgment on the claimant’s common law claim, but it argued at the summary judgment hearing that the claim was not viable because the Texas Workers’ Compensation Act provides the exclusive remedy. The trial court granted the carrier’s motion for summary judgment, affirmed the decision of the Division, and denied the claimant’s motion for summary judgment.
The court first addressed the standard of review.
The issue before us is whether an extent of injury dispute is one regarding compensability or eligibility for benefits which is reviewed under the modified de novo standard or whether it is a collateral issue subject to review under the substantial evidence rule. The Act does not define “compensability,” but it defines “compensable injury” as “an injury that arises out of and in the course and scope of employment for which compensation is payable under [the Act].” “Compensation” means payment of a benefit. The Act defines “benefit” as “a medical benefit, an income benefit, a death benefit, or a burial benefit based on a compensable injury.”
Issues which concern or implicate compensability or eligibility for benefits are reviewed under the modified de novo standard. Collateral issues such as disputes over medical benefits, attorney’s fees, and administrative sanctions presumably do not concern compensability and are subject to substantial evidence review under Section 410.255.
Old Republic maintains this case falls under the substantial evidence rule because it involves a collateral issue. We disagree. The dispute is whether the compensable injury suffered by Croysdill in 1997 extends to and includes the claimed diagnoses as set forth in the issue identified by the hearing officer. This dispute implicates both compensability and Croysdill’s eligibility for benefits. If the compensable injury extends to one or more of the claimed diagnoses, Croysdill could be entitled to additional workers’ compensation benefits. On the other hand, if the claimed diagnoses were more likely a result of preexisting degenerative disc disease, and the preexisting conditions were not accelerated, worsened, or enhanced as a result of the compensable injury, then Croysdill may not be entitled to additional benefits.
We conclude that the dispute is not a collateral issue, but rather is one regarding compensability and eligibility for benefits, and that the modified de novo review standard applies. Accordingly, contrary to Old Republic’s contention, Croysdill did not have the burden in the trial court to show that the DWC decision was not supported by substantial evidence. Rather, he had the normal burden of most plaintiffs: to produce more than a scintilla of evidence to support each element of his claims in order to get to the jury. (Citations omitted.)
The court next turned to the question of whether expert testimony was necessary to establish that several of the spinal conditions found in claimant’s lower back were related to the compensable accident. The court concluded that the conditions required expert testimony.
The DWC was required to determine whether several diagnoses—including lumbar disc displacement, chronic lumbar radiculitis, chronic sciatica, spondylolisthesis, bilateral nerve root irritation, anterior disc herniation, foraminal stenosis, facet arthropathy, and a broad-based disc bulge contributing to moderate to severe bilateral neural foraminal stenosis—were causally related to the October 1997 compensable back injury. There is no lay testimony in the record establishing a strong, logically traceable connection between the original back injury and these conditions. Consequently, we conclude that expert testimony was necessary.
The court determined that the summary judgment evidence created a fact issue which precludes the granting of summary judgment in part at least as to the condition of “chronic lumbar radiculitis.”
Next, the court considered – but rejected – the claimant’s contention that the carrier’s extent of injury dispute was barred by the parties’ agreement that the “Release” did not terminate or limit Croysdill’s right to medical benefits as provided by Section 408.021 of the Texas Labor Code.
we understand Croysdill to argue that, because his impairment rating was determined in the prior lawsuit, Old Republic is precluded from disputing the extent of injury in the present action. Impairment rating and extent of injury are distinct issues, however. Consequently, settlement of the impairment rating issue does not preclude a carrier from later disputing extent of injury. (Citations omitted.)
Finally, the court addressed the claimant’s argument that the trial court had erred in granting summary judgment in favor of the carrier on the breach of the Release claim. The carrier argued that the trial court lacked subject matter jurisdiction of this claim because the claimant had not exhausted his administrative remedies. The court of appeals rejected this argument:
We recognize that exhaustion of administrative remedies is an issue of subject-matter jurisdiction and that challenges to subject-matter jurisdiction can be raised for the first time on appeal. Clint Indep. Sch. Dist. v. Marquez, __S.W.3d__, 2016 WL 1268000, at *14 (Tex. Apr. 1, 2016); Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000) (“[B]ecause subject matter jurisdiction is essential to the authority of a court to decide a case, it cannot be waived and may be raised for the first time on appeal.”). But, the record must affirmatively reflect that Croysdill failed to exhaust his administrative remedies. The record before us does not make this showing. In fact, the record reveals that Croysdill argued vigorously to the DWC hearing officer below that Old Republic was barred by the prior settlement agreement from contesting the extent of injury. While the hearing officer did not make specific findings or conclusions on the effect of the settlement agreement, she impliedly rejected Croysdill’s claim by ultimately ruling against him. Consequently, we conclude that the trial court erred by granting summary judgment on the breach of the Release claim.
In our view, the law is clear that extent-of-injury issues must be tried under a modified de novo standard of review. Moreover, it is unconventional to say the least, to try to resolve an impairment rating dispute using a settlement release. Doing so adds nothing to the resolution, but potentially exposes the carrier to a claim that the “release” has been breached by subsequent claims decisions. Parties should enter into “agreements” or “settlements” as those terms are defined in the Act, when attempting to resolve disputed issues on judicial review.
FOLIO
