San Antonio Court of Appeals Splits Over the Meaning of “Issue” in a Course and Scope Case
The San Antonio court of appeals has reversed a judgment that concluded that an employee who was injured while working in her own kitchen over the weekend was not in the course and scope of her employment. The case is Martinez v. State Office of Administrative Hearings, 04-14-00558-CV (Tex. App.—San Antonio, February 10, 2016). In an opinion authored by Justice Karen Angelini and published on February 10, 2016, the court remanded Edna Martinez’s slip and fall claim to the trial court for further consideration. One judge, Justice Jason Pulliam, filed a concurring and dissenting opinion.
The case turned on a legal question that has split the courts of appeals in past cases. That question is, “what is an issue?” for purposes of exhausting administrative remedies. Stated differently, the question the court wrestled with in Martinez concerns whether an “issue” on judicial review amounts to a general dispute as framed by the Division of Workers’ Compensation or whether it means an argument that a party must raise and preserve at the administrative level in order to make that argument on judicial review or on further appeal.
The majority and dissenting opinions set out the competing rationales.
Majority Opinion
Similarly in this case, SORM seeks to broadly define “issue” “as basically anything that falls under the umbrella of ‘[compensability].’” Id.
Under section 410.302, a ‘trial court lacks jurisdiction to consider new issues because, in that instance, the moving party has failed to exhaust its administrative remedies.” Lopez v. Zenith Ins. Co., 229 S.W.3d 775, 778 (Tex. App.—Eastland 2007, pet. denied). This requirement ensures that “issues on which either party seeks judicial review” “have been ‘decided by’ the TWCC Appeals Panel.” Krueger, 155 S.W.3d at 619. It also ensures “the accuracy and efficiency of [the administrative] proceedings.” Tex. Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 528 (Tex. 1995).
If SORM had raised its statutory violation argument at the administrative level, the hearing officer and the appeals panel could have determined in the first instance whether SORM was estopped from asserting such a violation given the Department’s policy allowing Martinez to work at home. As the appeals panel noted in its decision, “There is evidence to support the hearing officer’s decision that the claimant had the authority to work at home at the time.” If SORM is able to raise the statutory violations in the trial court, whether the statute would preclude Martinez from working at home despite the “authority” she was given to do so by the Department would be decided in the first instance by the trial court rather than by the hearing officer or the appeals panel. Even under the Austin court’s broad definition, whether the statutory provisions precluded Martinez from working at home despite the Department’s policy was not a “disputed determination made by the hearing officer in rendering his decision.” Tex. Workers’ Comp. Ins. Fund, 124 S.W.3d at 821.
Because the statutory violations were never presented for consideration in the administrative review process, the trial court lacked jurisdiction to consider SORM’s argument based on those violations as a ground for summary judgment. Accordingly, the trial court erred in granting SORM’s motion for summary judgment, and Martinez’s second issue is sustained.
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As previously noted, a party may not raise an issue in the trial court that was not raised before the appeals panel. TEX. LAB. CODE ANN. § 410.302(b) (West 2015); Krueger, 155 S.W.3d at 619. Although the intermediate appellate courts are in agreement that judicial review is limited to “issues” decided by the appeals panel, there is a split of authority on whether the term “issues” encompasses each factual finding of a hearing officer at a contested case hearing, thereby requiring a party to appeal each adverse factual finding to avoid forfeiture of judicial review. Compare Zurich American Ins. Co., 2014 WL 3512769, at *8-11 (holding “issues” do not refer to the fact findings by a hearing officer) and Lopez v. Zenith Ins. Co., 229 S.W.3d 775, 778-79 (Tex. App.—Eastland 2007, pet. denied) (holding party failed to exhaust administrative remedies by failing to appeal hearing officer’s findings to the appeals panel). In this appeal, however, we need not decide whether SORM forfeited its right to challenge the hearing officer’s specific findings of fact to resolve Martinez’s first issue.
Dissenting Opinion
The parties agree that upon judicial review, Sections 410.301 and 410.302 dictate that the judiciary may only address “issues” decided by the appeals panel; however, the parties disagree as to the context and meaning of the term “issue” as used in the Act. Martinez contends SORM is jurisdictionally barred from raising the “issue” of statutory violation as basis for a finding that her claim is not compensable because SORM did not raise the statutory-violation “issue” during the administrative proceedings. SORM contends its statutory-violation argument is just that, merely a sub-argument to support its position on the “issue” of compensability of Martinez’s injury. The “issue” of compensability was consistently raised in the administrative process and was determined by the appeals panel in this case. Therefore, SORM contends it satisfied the requirements of the Act and may raise upon judicial review any sub-argument to support its position on the “issue” of compensability.
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I agree with the reasoning and conclusion drawn by the Austin Court of Appeals in Texas Workers’ Comp. Ins. Fund and conclude its holding applies to the similar procedural posture and determination to be made in this case. As in Texas Workers’ Comp. Ins. Fund, Martinez would have this court equate the meaning of “issue” as used in Sections 410.301(b) and 410.302(a) of the Act with the usage of “issue” or “point of error” that Texas appellate courts typically consider on appeal. See TEX. R. APP. P. 38.1(e),(h); see also Tex. Workers’ Comp. Ins. Fund, 124 S.W.3d at 820-21. Within this normal appellate practice, appellate courts may not consider issues raised for the first time on appeal. See Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 764 (Tex. 2014) (“We do not consider issues that were not raised in the courts below, but parties are free to construct new arguments in support of issues properly before the Court.”). However, as outlined by the Austin Court of Appeals in Texas Workers’ Comp. Ins. Fund, Martinez confuses “issues decided by the appeals panel” as it appears in Sections 410.301(b) and 410.302(a) of the Act with the parties’ arguments raised to support their position, and thus, the findings of fact rendered by the Hearing Officer and Appeals Panel. See Tex. Workers’ Comp. Ins. Fund, 124 S.W.3d at 820-21. Apart from common appellate practice and understanding, the Act uses the term “issue” in a different light. For this reason, the term “issue” as used in the Act must be interpreted within the context of its definition and usage within the Act, itself.
Specific to this case, Section 410.301 defines an “issue” to be either compensability or income or death benefits. TEX. LAB. CODE ANN. § 410.301(a). Because the word “issue” as referenced in the Act has a different nuance and usage than in common Texas appellate practice, I would hold that “issue,” as used in Section 410.301 and .302, refers to the disputed matters enumerated therein, that is, compensability, income, or death benefits. To be entitled to trial, or judicial review on one of these enumerated issues, a party must have presented it to the appeals panel for determination. TEX. LAB. CODE ANN. § 410.302; see also Tex. Workers’ Comp. Ins. Fund, 124 S.W.3d at 820-21 (holding “issue” is used to refer to “disputed matters related to the underlying workers’ compensation claim”, or the broad matters presented to the hearing officer or appeals panel for determination.). “Issue” as used within the Act does not refer to all arguments to support a party’s position with regard to one of the disputed matters enumerated within the Act.
As stated by the majority, Martinez raised the following “disputed issues” to be determined at all stages of the administrative process: (1) Did Martinez sustain a compensable injury on June 9, 2001; and (2) Did Martinez have a disability. Thus, following Texas Workers’ Comp. Ins. Fund, any argument raised to support or negate either of these two issues may be raised at any time. In this case, determination whether Martinez violated state law by working at home is an argument in support of SORM’s position that Martinez’s injury is not compensable. As enunciated by the Austin court, to hold that all arguments pertaining to compensability were the “issues” to be decided in administrative review “would totally ignore the repeated meaning of ‘issue’ elsewhere in [the Act] and would, in effect, elevate form over substance.” See Tex. Workers’ Comp. Ins. Fund, 124 S.W.3d at 821.
This question has emerged repeatedly over the last several years. The Austin Court of Appeals is in sharp disagreement with the Houston and Texarkana Courts of Appeals. Perhaps Martinez will be the vehicle by which the Texas Supreme Court undertakes the clarify the answer to the question.
FOLIO
