Courts Dismiss Two WC-Based Declaratory Judgment Claims
In the last two weeks of December 2015, two different courts of appeals dismissed declaratory judgment actions filed in relation to suits for judicial review of workers’ compensation decisions. In each case the aggrieved party who was unhappy with a Division decision had sought judicial review of the agency’s unfavorable decision. In both cases, the appealing party included as a part of their lawsuit, a request that the trial court issue a declaration under the Uniform Declaratory Judgments Act that the Division had misinterpreted Texas workers’ compensation law. Both plaintiffs – an injured worker in one case and a treating doctor in the other case – sought the recovery of attorneys’ fees under the UDJA, and each was represented by the same attorney.
The Dallas Court of Appeals affirmed the dismissal of the health care provider’s DJ action in Vanderwerff v. Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Ryan Brannan, in his official capacity and the Travelers Indemnity Company of Connecticut (No. 05-14-00195-CV, December 30, 2015). The Houston Court of Appeals (1st District) reversed the trial court’s refusal to dismiss the DJ action in Texas Department of Insurance, Division of Workers’ Compensation v. Green (No. 01-15-00321-CV, December 22, 2015).
In Vanderwerff, the court of appeals concluded that the request for declaratory judgment sought no decision that could not otherwise be decided in the traditional suit for judicial review. Accordingly, the court agreed with the trial court that the “redundant remedies doctrine” barred the declaratory judgment action.
Appellant’s first requested declaration is subject to the redundant-remedies doctrine because the propriety of the requested declaration is identical to the issue pending before the trial court in appellant’s suit for judicial review of the administrative decision. See Harvel v. Tex. Dep’t of Ins.–Div. of Workers’ Compensation, No. 13-14-00095-CV, 2015 WL 3637823, at *4 (Tex. App.—Corpus Christi June 11, 2015, pet. filed) (pleadings affirmatively negated jurisdiction because declarations sought were duplicative of suit for judicial review). Accordingly, we conclude the trial court did not err by dismissing this claim.
The court then addressed three declarations that Dr. Vanderwerff sought concerning “his right to payment by the carrier for his treatment of the claimant.” The court wrote that the trial court had no jurisdiction over those claims because the doctor had failed to adjudicate those claims at the Division level.
The Division asserts that appellant’s claim under chapter 413 remains pending in the administrative process and that appellant has not exhausted his administrative remedies concerning the subjects of the second, third, and fourth requested declarations. Appellant asserts he has exhausted his administrative remedy regarding these claims, but the record does not support this assertion.3 Because appellant has not exhausted his administrative remedy, the trial court lacked jurisdiction over these requests for declaratory judgment.
The First District Houston Court of Appeals reached a similar result from a different procedural context. In Green, the injured worker’s lawsuit sought (1) a judicial review of the Division’s Administrative decision denying her relief under the “injurious practices” defense and (2) a declaratory judgment that the “injurious practices” defense is not available under current Texas law. The Division argued that the trial court lacked jurisdiction over the declaratory judgment action against it.
The court of appeals agreed with the Division and accordingly reversed the trial court’s denial of the Division’s plea to the jurisdiction and dismissed the declaratory judgment action against the agency. In this regard, the court wrote that the claimant’s suit against the Division was barred by the doctrine of sovereign immunity and that the Division did not waive its sovereign immunity from suit by filing an intervention in the underlying lawsuit.
Both courts of appeals relied heavily upon a case recently decided by the Corpus Christi Court of Appeals, Harvel v. Texas Department of Insurance— Division of Worker’s Compensation, No. 13– 14–00095–CV (June 11, 2015, pet. filed). Harvel is currently pending on petition for review at the Texas Supreme Court. The Supreme Court’s upcoming decision whether to accept the petition or deny the petition in Harvel will likely guide the result in Vanderwerff and Green. A decision to allow redundant declaratory judgment claims in workers’ compensation cases would create an entirely new incentive for filing suit for judicial review and would expose workers’ compensation carriers to fee-shifted attorneys’ fees even in cases where the claimant filed suit.
FOLIO
