In Re American Casualty Co. of Reading, Pennsylvania

233 S.W.3d 925, 2007 Tex. App. LEXIS 7606, 2007 WL 2729593
CourtCourt of Appeals of Texas
DecidedSeptember 19, 2007
Docket10-07-00252-CV
StatusPublished
Cited by4 cases

This text of 233 S.W.3d 925 (In Re American Casualty Co. of Reading, Pennsylvania) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re American Casualty Co. of Reading, Pennsylvania, 233 S.W.3d 925, 2007 Tex. App. LEXIS 7606, 2007 WL 2729593 (Tex. Ct. App. 2007).

Opinions

OPINION

FELIPE REYNA, Justice.

American Casualty Company of Reading, Pennsylvania seeks a "writ of mandamus compelling Respondent, the Honorable Gene Knize, Judge of the 40th District Court of Ellis County, to set aside an order granting a motion by the real parties in interest to lift an abatement order and permit discovery in the underlying suit. We will conditionally grant the relief requested.

Background

Belinda Parker-Jett and her husband Tim filed suit in 2003 against American Casualty, a workers compensation insurance carrier, alleging that American Casualty had improperly delayed or denied payment of medical benefits and other expenses incurred for a work-related injury suffered by Parker-Jett. They alleged claims for breach of contract, deceptive trade practices, unfair insurance practices, and breach of the duty of good faith and fair dealing. They later requested an abatement of the suit pending resolution of administrative proceedings before the Texas Workers’ Compensation Commission1 regarding American Casualty’s denial of reimbursement for mileage and prescription medications and its denial of coverage for psychological treatment. Respondent granted this request in August 2004, ordering that the suit be abated “until such time as Plaintiff has fully and completely exhausted her administrative remedies.”

The plaintiffs filed a motion to lift the abatement order in April 2007, stating that “all remedies have been exhausted.” American Casualty filed a response opposing any lifting of the abatement order. American Casualty advised Respondent that the plaintiffs were still pursuing an appeal in a Dallas County district court of an adverse administrative decision by the Division on their claim regarding coverage for psychological treatment, that the claim regarding reimbursement for prescription medications remained pending before the Division, and that plaintiffs’ counsel had agreed that they were not entitled to reimbursement for mileage.

At a hearing on the motion to lift the abatement order, American Casualty reiterated these contentions, and the plaintiffs did not refute them. Instead, plaintiffs’ counsel argued, ‘We’ve had this abated since 2004. We believe we need to move forward on this case. It’s been three years now, and there’s a good chance discoverable materials are not going to be available anymore.” Over American Casualty’s objection, Respondent advised that he would lift the abatement order “as to any discovery.” Respondent’s written order provides in pertinent part, “ORDERED that the abatement of this lawsuit is lifted with respect to the parties’ ability to conduct discovery only. For all purposes other than discovery, the suit remains abated.”

Abuse of Discretion

Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal. In re Tex. Dep’t of Family & Protective [928]*928Servs., 210 S.W.3d 609, 612 (Tex.2006) (orig.proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex.2004) (orig.proceeding).

The parties do not disagree that the principles enunciated in American Motorists Insurance Co. v. Fodge and similar cases govern the abatement procedures in this case. 63 S.W.3d 801 (Tex.2001). In that case, the Supreme Court held that a compensation claimant cannot prosecute a suit for benefits and damages resulting from a denial of benefits without a prior determination by the Division that she is entitled to those benefits. See id. at 804-OS. This is because the Division has exclusive jurisdiction to determine a claimant’s entitlement to benefits. Id. at 804; see also Tex. Mut. Ins. Co. v. Tex. Dep’t of Ins., 214 S.W.3d 613, 619 (Tex.App.-Austin 2006, no pet.); Tex. Mut. Ins. Co. v. Sonic Sys. Int’l, Inc., 214 S.W.3d 469, 480 (Tex.App.-Houston [14th Dist.] 2006, pet. denied); Roskey v. Continental Cas. Co., 190 S.W.3d 875, 880 (Tex.App.-Dallas 2006, pet. denied).

When a plaintiff files suit related to claims lying within the exclusive jurisdiction of the Division which the Division has not yet finally resolved, “the court may abate proceedings to allow a reasonable opportunity for the jurisdictional problem to be cured.” Am. Motorists Ins., 63 S.W.3d at 805; accord In re Tex. Mut. Ins. Co., 157 S.W.3d 75, 82-83 (Tex.App.-Austin 2004, orig. proceeding). The Supreme Court later explained in more detail how this abatement procedure relates to the trial court’s jurisdiction in a case involving the Texas Motor Vehicle Board and claims arising under the exclusive jurisdiction of the Texas Motor Vehicle Commission Code.

McDavid must exhaust its administrative remedies before the trial court determines the damages arising from McDavid’s Code-based claims. Until McDavid exhausts its administrative remedies to obtain final Board findings on the Code issues, the trial court lacks subject matter jurisdiction to try the alleged damages arising from McDavid’s Code-based claims.

Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 227 (Tex.2002).

Applying the Subaru analysis to the present case, “the trial court lacks subject matter jurisdiction” to try the plaintiffs’ claims until the plaintiffs have exhausted their administrative remedies with the Division. Id. It is undisputed that the plaintiffs have not yet exhausted their administrative remedies. Therefore, because “the trial court lacks subject matter jurisdiction,” Respondent abused his discretion by lifting the abatement order to permit discovery.

Adequate Remedy

American Casualty argues that it has no adequate remedy by appeal because Respondent has refused to fully abate claims for which the Division still has exclusive jurisdiction. As we have explained, the trial court lacks subject matter jurisdiction over the claims of the real parties in interest. Thus, we must decide whether American Casualty has an adequate remedy by appeal to challenge Respondent’s order permitting discovery in a case in which Respondent has not yet acquired (and may not ever acquire) subject matter jurisdiction.

In Prudential Insurance, the Supreme Court explained that the determination of whether a litigant has an adequate remedy “resists categorization.” 148 S.W.3d at 136.

Mandamus review of significant rulings in exceptional cases may be essential to [929]

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Related

Bestor v. Service Lloyds Insurance Co.
276 S.W.3d 549 (Court of Appeals of Texas, 2008)
In Re American Casualty Co. of Reading, Pennsylvania
233 S.W.3d 925 (Court of Appeals of Texas, 2007)
Fortis Benefits v. Vanessa Cantu
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Bluebook (online)
233 S.W.3d 925, 2007 Tex. App. LEXIS 7606, 2007 WL 2729593, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-american-casualty-co-of-reading-pennsylvania-texapp-2007.