Court Reverses Ruling Against Carrier in Death Case

A Texas Court of Appeals has concluded that an employer is not required to file a second FROI (first report of injury) after the death of an employee at work if a properly reported injury later resulted in that death. In Zurich American Ins. Co. v. Diaz, No. 14-17-00295-CV, decided August 30, 2018, the employee died several weeks after suffering an on-the-job injury. The injury claim was initially disputed following the insurance carrier’s receipt of the FROI. Later, the employee’s surviving spouse pursued a death claim through the administrative process. However, her claim was denied by the carrier because she filed it more than a year after the date of the death. The trial court held on summary judgment that the carrier’s late-filing defense was untimely or, in the alternative, that the claimant beneficiary had established good cause for filing her claim for death benefits more than one year past the date of the death.

The court of appeals disagreed, and reversed the trial court’s judgment.

Marta’s argument finds no support in the text of either statute. Section 409.005 requires the employer to report to the carrier “an injury that results in the absence of an employee of that employer from work for more than one day.” Id. § 409.005(a). The carrier must then file the report with the Division. Id. § 409.005(d), (e). Section 409.005 contains no requirement to file a second report if a properly reported injury later results in death. If the legislature intended to require an employer or carrier to file a report of injury after the first day of lost time, and then a second report if the injured employee subsequently died, the statute would say so. See Cornyn v. Univ. Life Ins. Co., 988 S.W.2d 376, 379 (Tex. App.—Austin 1999, pet. denied) (explaining that courts must presume words used have a purpose and “every word excluded was excluded for a purpose”).

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In sum, nothing in the statutory provisions or rules on which Marta relies supports her position that the time to file her death benefits claim was tolled. Zurich complied with the clear and unambiguous language of section 409.005 by timely filing Encarnacion’s report of injury with the Division. Further, section 409.008 does not trigger tolling when a timely reported injury results in death and a separate report of death is not filed. Thus, we conclude the one-year time period for filing a death benefits claim was not tolled.

The trial court correctly denied Marta’s motion for summary judgment on this issue.

Having held that the claimant beneficiary’s claim for death benefits was untimely, and that the time for filing the claim was not tolled, the court next considered whether the beneficiary established good cause for her failure to timely file the claim. The court of appeals disagreed with the trial court that good cause had been established as a matter of law. The majority of the court held that a fact question existed on whether good cause had been established. The dissenting justice would have held that the claimant beneficiary failed to establish good cause as a matter of law.

In reaching its conclusion that the claimant beneficiary had failed to establish good cause as a matter of law, the court of appeals addressed some interesting arguments.

First, the court rejected the claimant beneficiary’s argument that the late filing defense was required to be asserted within the first sixty days after receiving notice of the death.

Neither of these statutes expressly requires a carrier to assert the limitations defense within sixty days of the notice of death. If they did, then in most cases, a carrier would have to assert the defense preemptively because the carrier typically receives the notice of death more than sixty days before the one-year limitations period has even expired. Nothing in the Act or in our case law requires such a premature assertion of a defense.

Second, the court rejected the beneficiary’s argument that Zurich’s failure to send a plain language notice (PLN-12) establishes good cause for her late filing as a matter of law. The court noted that the plain language notice requirement was imposed by Rule 132.17 and that this rule “says nothing about either tolling or good cause.” The court wrote that “A carrier’s failure to comply with the rule may be a relevant factor in determining whether a beneficiary has good cause for filing a claim late, but there is no basis for concluding that the carrier’s failure establishes good cause as a matter of law.”

The court found that the claimant beneficiary raised a fact question on good cause, however when she testified by her affidavit that her husband did not appear to her to have died from anything to do with his initial burn injuries. This, the court believed, raised a fact question on good cause because, “case law has recognized that a claimant may have good cause for late filing when the claimant did not know that the death was work-related.”

The court reversed the trial court’s ruling on the merits of the case and remanded the case for trial. Separately, the court also unanimously affirmed a portion of the trial court’s judgment that dismissed, on jurisdictional grounds, the claimant beneficiary’s claims for declaratory judgment.