Court Holds: Late Filing Defense Must be Raised within a Reasonable Time
The Tyler Court of Appeals has affirmed a decision that granted partial summary judgment in favor of the injured worker—holding that the carrier will have waived their affirmative defense concerning the injured worker’s failure to timely report a claim for compensation with DWC within one year of the injury if the carrier does not raise this defense within a reasonable period of time after it becomes available, even where it was not an available defense at the time of filing the original PLN-1. The decision in City of Dallas v. Thompson No.12-19-00036-CV was published on March 25, 2020.
The appellant, City of Dallas, brought a permissive interlocutory appeal from the trial court’s partial summary judgment rendered and sued for judicial review of a final decision and order of the Texas Department of Insurance, division of Worker’s Compensation (DWC). The trial court determined that Dallas was not relieved from liability for past employee Gregory G. Thompson’s workers’ compensation claim.
Mr. Thompson’s workers’ compensation claim, reported on August 18, 2010, was based on the diagnosis of his testicular cancer that he attributed to his exposure to carcinogens during his career as a firefighter for the city of Dallas. By the following day, August 19, 2010, the city of Dallas had already denied Mr. Thompson’s claim.
After Mr. Thompson disputed the denial of the compensability of the claim and disability, an Administrative Law Judge (ALJ) ruled in December 2016 that the city of Dallas’ PLN-1, dated August 19, 2010, was sufficient to contest compensability of the claimant’s injury. The ALJ also determined that Mr. Thompson sustained a compensable injury in the form of an occupational disease, and although Mr. Thompson had not filed a claim for compensation within one year of the injury and did not have good cause for failing to do so, the city of Dallas had still waived the one-year defense because they did not raise it within a reasonable time after it had become available.
Seeking judicial review of the DWC ruling, Dallas alleged that the ALJ committed a reversible error by erroneously raising the issue of whether Dallas had waived the defense of Thompson’s failure to timely file his claim. Alternatively, Dallas asserted that it did raise the one-year defense within a reasonable period of time after it became available.
Thompson filed a counterclaim complaining of two things: (1) the ALJ’s determination that the PLN-1 was sufficient to contest compensability and (2) that Thompson had not filed a claim with the DWC within one year of the injury, but that if he had not filed within one year, there was good cause for failing to do so. Additionally, Thompson requested the city of Dallas pay his attorney’s fees.
Mr. Thompson also filed a cross-motion for summary judgment that asserted that the evidence demonstrated, as a matter of law, that the city of Dallas had waived its affirmative defense and had waived its right to contest compensability and disability, which entitled Mr. Thompson to final summary judgment.
The city of Dallas filed a motion for summary judgment based on two things: (1) the fact that Thompson had failed, without good cause, to file a claim for compensation with DWC within one year of the injury—meaning Dallas did not waive their defense; and (2) that the ALJ had erroneously added the waiver issue.
The trial court denied the city of Dallas’s motion for summary judgment and granted Mr. Thompson’s cross-motion for summary judgment. The court ordered that Dallas was not relieved from liability because Mr. Thompson had failed to file a claim within one year of the injury, and the city of Dallas was also not released from liability because they had waived the one-year defense by not raising the defense within a reasonable period of time after it became available. The trial court affirmed DWC’s determinations concerning the one-year defense and the carrier’s waiver of this defense in favor of Thompson. Finding that these determinations were controlling questions of law to which there could be a substantial ground for difference of opinion, the court granted permission to appeal the partial judgment.
On appeal, Dallas contended that the trial court erred on two issues: (1) they improperly granted Thompson’s cross-motion for summary judgment and (2) improperly denied Dallas’ motion for summary judgment.
Dallas asserted was that the trial court had erred in denying their motion for summary judgment and in granting Mr. Thompson’s cross-motion for summary judgment because they had not waived their one-year defense. Dallas also argued that the waiver issue was erroneously added by the ALJ at the CCH because the statutory requisites require an issue to be raised but not resolved at a BRC to be tried at CCH. They contended that an unidentified issue can only be added at the CCH if the parties consented or the ALJ determined that good cause existed for not raising the issue previously at the BRC. Alleging they did not consent to trying the waiver issue and that no statute or rule required Dallas to raise the defense “within a reasonable period of time after it became available” as found by the ALJ, they argued the statutory requisites were not met.
In examining this issue, the Court looked to the ALJ’s assertion that the issue was actually litigated. Dallas asserted that it objected to trying the waiver issue. Therefore, it had not consented to its addition at the CCH.
The Court assumed Dallas’ motion for summary judgment had provided a complete CCH record for the trial court, and in the absence of being able to review any additional evidence or exhibits from the CCH, the trial court still could not say that the waiver issue was not tried by consent. Relying on this, the Court held that the city of Dallas could not have met their burden to prove as a matter of law that the ALJ had erroneously found the waiver issue was tried by consent.
Furthermore, the city of Dallas’ objection was not held to be evidence and did not meet or extinguish Dallas’s burden to prove the issue was not tried by consent.
Next, Dallas argued that the ALJ’s determination that Dallas had waived its defense because it was not raised within a reasonable period of time after it became available had no basis in law, and the ALJ’s creation and application of this reasonable period of time standard was arbitrary and capricious. The appellate court disagreed.
Deferring to the Worker’s Compensation commission’s interpretation of its own rules in accordance with the Code Construction Act, which allows the Court to accept an interpretation if it is reasonable, the Court doesn’t believe under the facts of the case that it would be reasonable to apply section 409.021 and 409.022. Here, the Court reasoned that by requiring the city of Dallas to name the one-year defense as a ground for refusing to pay benefits in the PLN-1 it filed with DWC on August 20, 2010, they would have been requiring the city of Dallas to assert a defense that was not even available for at least one year. Relying on Segal, the Court agreed that to waive a right impliedly, the right must be able to be asserted at the time the right is waived.
The Court held that, contrary to the city of Dallas’ assertion that the ALJ’s determination was an arbitrary ad-hoc ruling, Workers’ Compensation appeals panels have frequently determined what a reasonable period of time is in the context of the one-year defense.
Mr. Thompson reported his injury on August 18, 2010. Dallas’ first report of the injury was filed with DWC on August 20, 2010. Therefore, the one-year defense only became available to the city of Dallas on August 20, 2011. There was no written document asserting this defense in the record, and the ALJ found that Mr. Thompson had requested a BRC in April 2016. Dallas stated on the record at the CCH that they had raised that defense at the BRC, which was held August 17, 2016.
With no explanation for the five-year delay between the time the defense became available and when it was asserted in the record, the Court held that their inaction for such a long period of time proved waiver. Additionally, Appeals Panel decisions have held that matters that were first disputed at a BRC on grounds they would have been apparent within a short time after the one-year anniversary of the date of injury have not been raised within a reasonable amount of time.
Ultimately, the Court held that the trial court did not err by denying Dallas’s motion for summary judgment and by granting Mr. Thompson’s cross-motion for summary judgment. The court overruled Dallas’ second issue and stated they did not need to address Dallas’s first issue.
Accordingly, the Court of Appeals affirmed the trial court’s partial summary judgment.
FOLIO
