Appeals Panel Holds that ALJ Failed to Address the Issues Raised by the Parties in Compensability Dispute; Remands Case
The appeals panel has reversed an ALJ’s decision and order and remanded the case for further proceedings in a claim involving an earlier CCH and the argument that the disputed issue had been previously resolved in that earlier CCH. The decision, Texas Division of Workers’ Compensation Appeals Panel Decision No. 190929, was filed July 24, 2019.
The appeals panel determined that the ALJ’s decision failed to address whether the prior CCH had actually resolved the issue, an issue known as res judicata. Res judicata is the legal principal that holds that a party may not relitigate a matter that has been previously decided. It is also known as “issue preclusion.” Because the parties actually litigated whether res judicata precluded the employer from litigating the standing issue again, the appeals panel held that the ALJ should have added it as an issue and decided it for the parties. The case was reversed and remanded because the ALJ had failed to do so.
The case arose when the claimant was crossing a public road on foot and was hit by a truck driven by a coworker. The claimant was the potential employee of two different employers at the time of the accident. Each employer was insured by a different workers’ compensation carrier. Both carriers disputed the compensability of the claim. The claimant declined to pursue a workers’ compensation claim and instead filed suit against one of the employers alleging that its employee who was driving the car was negligent in causing the accident. The employer has been trying to establish that the claim is compensable in order to defend the lawsuit based on the exclusive remedy defense.
The employer sought to obtain a DWC decision on the matter in the previous CCH. The carriers in that hearing argued that the employer lacked standing to pursue the claim independently. The ALJ in that hearing resolved the standing issue by determining that the employer did not have standing as a party to bring forward the issue of compensability. That decision was not appealed and became final pursuant to Section 410.169. The ALJ’s discussion in that case states the following:
The [Act] provides two ways for an employer to bring a claim with the Division: either as a subclaimant or by disputing the compensability of a claim if the carrier has accepted liability for the payment of benefits pursuant to [Section] 409.009 and [Section] [409.011(b)(4)]. . . . [The] [e]mployer failed to prove that it has standing as a party to bring forward the issue of compensability as a matter of law.
The carriers in the latest CCH argued that the earlier decision constituted res judicata on the issue of whether the employer had standing as a party under the Act to bring forward the issue of compensability. They contended that this unappealed decision precluded the ALJ from again deciding the issue of standing as a subclaimant under Section 409.009. The appeals panel concluded that the ALJ did not discuss or make any findings of fact, conclusions of law, or a decision on the res judicata issue. The appeals panel held:
The ALJ erred in failing to add the issue of whether the employer is barred from pursuing compensability under res judicata based on the decision and order issued on (date), and in failing to make findings of fact, conclusions of law, and a decision on that issue. Therefore, we reverse the ALJ’s decision as being incomplete, and we remand this case to the ALJ for further action consistent with this decision.
The appeals panel made two additional important observations.
First, it noted that Rule 140.6 establishes that a subclaimant pursuing a claim for reimbursement of a benefit provided to an injured employee and participating in the dispute resolution process must comply with the requirements listed in Rule 140.6(c)(2) and (c)(3). The appeals panel wrote that the ALJ had not specifically addressed any of the listed requirements. Presumably, if the ALJ finds that the prior CCH decision did not preclude the employer from pursuing the issue of subclaimant standing, she will address the requirements in the rule.
Second, although the ALJ determined that the claimant sustained a compensable injury, the appeals panel wrote that she had failed to identify in her discussion or in a finding of fact a particular theory to base her finding that the claimant was in the course and scope of his employment on the date of injury. Instead, the appeals panel wrote that the ALJ had relied on four alternate theories presented by the employer at the CCH. The appeals panel then made a very important observation that the ALJ will have to consider carefully when deciding the compensability issue on remand:
It was undisputed the claimant was crossing a public street on foot when he was struck by a truck. We note the Texas Supreme Court stated in Texas Comp. Ins. Co. v. Matthews, 519 S.W.2d 630 (Tex. 1974) “no case has extended the ‘access exception’ out into the public streets where other members of the public are subject to the same hazard.” See also Kelty v. Travelers Ins. Co., 391 S.W.2d 558 (Tex. Civ. App.-Dallas 1965, writ ref’d n.r.e.); Appeals Panel Decision (APD) 190602, decided June 3, 2019.
As indicated, this is the second time in two months that the appeals panel has written a decision referencing the rule in Matthews and Kelty. Given that the appeals panel had reversed a decision of compensability under this theory last month in Texas Division of Workers’ Compensation Appeals Panel Decision No. 190602, the panel appears to be sending a strong signal to the ALJ that her determination of compensability was legally incorrect.
In summary, the appeals panel reversed the ALJ’s decision as being incomplete because it failed to address the carriers’ res judicata issue. It reversed the decision based on the failure of the ALJ to add the issue of whether the employer has standing to bring forward this claim as a subclaimant pursuant to Section 409.009 and Rule 140.6, Finally, the appeals panel reversed the ALJ’s determination that the claimant sustained a compensable injury. The case has been remanded to the ALJ for further action consistent with the decision.
FOLIO
