Carriers win and lose Pair of Subrogation Decisions
A workers’ comp carrier won an appeal in the Dallas Court of Appeals while another carrier lost an appeal at the Texarkana Courts of Appeal in decisions that clarify when a carrier may recover benefit payments through subrogation. The Dallas Court of Appeals reversed a judgment that had dismissed a carrier’s subrogation claims and remanded the case for proceedings that would permit the carrier to pursue recovery. The Texarkana Court of Appeals Court of Appeals dismissed a carrier’s attempted appeal from an order denying its attempted intervention in a third party case that had settled.
Waiver of Subrogation Not Proved
In Texas Mutual Ins. Co. v. Stevenson, No. 05-18-00978-CV (October 2, 2020), the appellate court agreed with Texas Mutual that the trial court erroneously rejected the carrier’s right to pursue subrogation recovery against an injured worker’s health care providers for alleged medical malpractice. The carrier had sought to recover more than $300,000 in medical and indemnity benefits paid on the claim.
The claimant argued the carrier’s policy contained a waiver of all rights to seek subrogation otherwise allowed under the Texas Workers’ Compensation Act. The carrier responded that the waiver provision applied only if a contract between the employer insured and a third party required such a waiver. Texas Mutual contended that the claimant had provided no evidence of such a contract. The court of appeals agreed with the carrier:
Here, Stevenson conceded at oral argument that the record in this case does not contain a written contract requiring a waiver of subrogation. The waiver in this case applied only to any “person or organization for whom the Named Insured has agreed by written contract to furnish this waiver.” Without such a contract, there was no evidence to show Texas Mutual waived its subrogation rights. Accordingly, the trial court erred in granting summary judgment in favor of Stevenson. We sustain Texas Mutual’s sole issue. (Citations omitted.)
Timing Problems Sink Carrier’s Attempted Intervention
The Texarkana decision involves an attempted appeal from the trial court’s refusal to permit the workers’ comp carrier to intervene in a claimant’s third party case. The court of appeals, in XL Insurance America, Inc. v. Covington, No. 06-20-00048-CV (October 1, 2020), concluded that the carrier’s attempted appeal from the trial court’s order of dismissal had come too late to invoke the appellate court’s jurisdiction.
The carrier had paid more than $2 million in medical and income benefits on the underlying claim for compensation. The opinion states the carrier had expressly waived its right to subrogation in reliance upon the representation of counsel for the claimant that the defendant had only a $30,000.00 insurance policy limit. Thereafter, the court wrote, the defendant’s insurance carrier allegedly violated a Stowers deadline and ultimately settled the case for an amount well in excess of the $30,000.00 insurance policy limit. On March 2, 2020, the trial court entered an order granting claimant’s motion for dismissal and for final judgment.
Sixteen days later, the comp carrier intervened post-judgment to enforce its right of subrogation. The carrier also filed a motion for new trial in which it asked the trial court to vacate the signed judgment and a motion for apportionment in which it asked the trial court to conduct a hearing to determine how the settlement proceeds should be apportioned between it and any other parties claiming entitlement to those proceeds.
Following a hearing, the trial court determined that it lacked plenary jurisdiction to grant the intervenor’s petition and motions and therefore entered an order denying the intervention and the post-judgment motion on June 2, 2020. The appellate court wrote that the question whether the trial court retained plenary jurisdiction to grant the petition in intervention turned on whether the comp carrier was a party or a non-party to the case.
A trial court retains plenary power over its judgment for thirty days. “A motion to modify, correct, or reform a judgment . . . extend[s] the trial court’s plenary power to change its judgment beyond the initial thirty-day period” for up to an additional seventy-five days. A non-party, however, “may not move for a new trial or file a post-judgment motion to extend the court’s plenary jurisdiction unless the non-party successfully intervenes.” “A non-party successfully intervenes if he files a plea in intervention prior to the entry of judgment and the court does not strike the plea on the motion of a party.” However, “a plea in intervention comes too late if filed after judgment and may not be considered unless and until the judgment has been set aside.” (Citations omitted.)
The comp carrier filed a notice of appeal to the court of appeals on July 1, 2020. The claimant contended that the carrier’s notice of appeal was filed too late to invoke the jurisdiction of the court of appeals. The court of appeals agreed. The court reasoned that because the carrier attempted to intervene post-judgment and the judgment was not set aside within thirty days from its entry, its petition in intervention was not effective, and its motion for new trial did not extend the trial court’s plenary jurisdiction. Accordingly, the court ruled that the carrier’s notice of appeal was well beyond its April 1 2020 deadline to do so.
The carrier argued on appeal however that it was not appealing from the final judgment but was, rather, taking an appeal from the June 2, 2020, order denying the carrier’s petition in intervention and its post-judgment motions. The court of appeals rejected the argument:
Because the trial court entered its final order in this case on March 2, 2020, it lost plenary power over that judgment on April 1, 2020. The June 2, 2020, order was therefore issued at a time when the trial court no longer had plenary power over its judgment. “Judicial action taken after the court’s jurisdiction over a cause has expired is a nullity.” Consequently, the June 2 order did not trigger the appellate timetable.
The court of appeals dismissed the carrier’s appeal for want of jurisdiction.
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