Supreme Court to hear SORM v. Martinez

This fall, the Texas Supreme Court will hear oral arguments in a workers’ compensation case that touches on several important procedural issues. State Office of Risk Management v. Martinez, (No. 16-0337), will be argued to the court on October 12, 2017. Oral arguments will be simulcast. The case is likely to be decided in early 2018.

The issue in Martinez is: what constitutes an issue?

The Texas workers’ compensation system is an issue-driven system. When a dispute is raised by the parties, the Division’s jurisdiction – the power of the agency to decide the dispute – is limited to the issue that the dispute involves. For example, if the parties disagree over a disability issue, the Division may not, on its own, also decide an issue of MMI or impairment rating. And no other issue may be raised later in the process, such as before the appeals panel or on judicial review in district court. So the power of the hearing officer to decide an issue restricts the power of the appeals panel or a reviewing court to decide any other issue. Issues that are not appealed can become final, while other issues that are appealed can still be challenged.

This is unlike old law (cases before January 1, 1991) where a dispute over a single issue gave the Agency the power to decide any other issue that might crop up somewhere in the dispute resolution process.

It’s important, therefore, for parties, the Division, and courts to clearly understand what actually constitutes an “issue.”

Edna Martinez was employed as a Child Protective Services Specialist II with the Texas Department of Public and Regulatory Services. On Saturday, June 9, 2001, Martinez was injured when she fell in the kitchen and dining area of her own home. Martinez reported the injury to her employer and filed a claim for workers’ compensation benefits.

After Martinez made the claim, her employer filled out an initial accident report stating, in part, “unknown if accident happened in work area.” Martinez reported that she believed her injuries occurred as a result of slipping on moisture on her kitchen floor Martinez’s fall occurred away from her office, on premises not controlled by her employer. Martinez’ claim was disputed by the State Office of Risk Management, which administers claims reported by state employees.

At a CCH, the issues presented were 1.) Did the Claimant sustain a compensable injury on June 9, 2001; and 2.) Did the Claimant sustain disability as the result of the June 9, 2001, claimed injury, and if so, for what period(s)? At the CCH, SORM argued that Martinez violated a rule of the employer because she was working at home on the weekend without prior permission, a violation of her employer’s employment policies.

The Hearing Officer found that Martinez did not sustain a compensable injury, and because she did not sustain a compensable injury she did not have disability. The Appeals Panel reversed the hearing officer and rendered a decision that Martinez was injured while in the course and scope of her employment. SORM sought judicial review on the same two issues. Subsequently, SORM filed a Motion for Summary Judgment based upon the argument that a compensable injury is precluded because Martinez specifically violated Texas Government Code § 658.010 and § 659.018, which regulates State employee work hours, including the location of where work may be performed. The court of appeals decision held that SORM failed to raise this argument at the administrative level and was, therefore, precluded from raising it for the first time on judicial review. Martinez v. State Office of Risk Mgmt., No. 04-14- 00558-CV, 2016 WL 548115 (Tex. App.—San Antonio, February 10, 2016) (mem. op.). One judge filed a concurring and dissenting opinion. Both SORM and Martinez sought review by the Supreme Court.

Texas courts are divided on whether an “issue” under the workers’ compensation act is the issue decided by the Division, such as whether Martinez was injured in the course and scope of her employment, or whether an “issue” is something narrower, like the specific argument why Martinez may not have been in the course and scope of her employment at the time of her injury. If an issue is defined narrowly, a trial court cannot hear new arguments to old issues.

In TIG Premier Ins. Co. v. Pemberton, 127 S.W.3d 270, 276 (Tex. App.—Waco 2003, pet. denied) and Texas Mut. Ins. Co. v. Ochoa, 04-09-00401-CV, 2010 WL 2844464 (Tex. App.—San Antonio July 21, 2010, no pet.), the courts utilized a narrow definition of an “issue” In Pemberton the court held that a workers’ compensation claimant had forfeited his right to challenge the contested case hearing officer’s finding of no causal relationship because he did not raise the issue with the appeals panel, even though the insurance carrier was the party who appealed. In Ochoa the court concluded that because neither party appealed the Division’s decision on the causation issue – which the Division decided in favor of the carrier – that issue became final and binding. Lopez v. Zenith Ins. Co., 229 S.W.3d 775, 778 (Tex. App. – Eastland 2007, pet. denied) used similar reasoning, holding that a party failed to exhaust administrative remedies by failing to appeal a hearing officer’s findings of fact to the appeals panel.

In contrast, in Tex. Workers’ Comp. Ins. Fund v. Tex. Workers’ Comp. Comm’n, 124 S.W. 3d 813 (Tex. App.—Austin, 2003, pet. denied) the court explained that “issues” in the context of the Texas Workers’ Compensation Act should be viewed broadly, holding that an “issue” refers to the disputed determinations made by the hearing officer in rendering his decision, not any “subarguments” that may have been raised in connection with that issue. This view has been followed in Zurich Am. Ins. Co. v. Debose, 01-13-00344-CV, 2014 WL 3512769 (Tex. App.—Houston [1st Dist.] July 15, 2014, pet. denied) and In re Metro. Transit Auth., 334 S.W.3d 806 (Tex. App.—Houston [1st Dist.] 2011, no pet.).

SORM v. Martinez is expected to resolve this split of authority.