in Re: Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds & Guerra, L.C., Timothy K. Singley and Dana M. Gannon

Court of Appeals of Texas·Decided June 12, 2019·No. 12-19-00144-CV·Published

Opinion

NO. 12-19-00144-CV IN THE COURT OF APPEALS TWELFTH COURT OF APPEALS DISTRICT TYLER, TEXAS

IN RE: OLD REPUBLIC RISK § MANAGEMENT, OLD REPUBLIC INSURANCE COMPANY, THORNTON, BIECHLIN, REYNOLDS § ORIGINAL PROCEEDING & GUERRA, L.C., TIMOTHY K. SINGLEY AND DANA M. GANNON, RELATORS §

MEMORANDUM OPINION Relators, Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds, and Guerra, L.C., Timothy K. Singley, and Dana M. Gannon, filed this original proceeding to challenge Respondent’s denial of their plea to the jurisdiction and motion to dismiss.1 We conditionally grant the writ.

BACKGROUND On January 22, 2018, Debra Morris, Individually and as representative of the Estate of Kenneth W. Morris, Ashley Bialowas f/k/a Ashley Morris, Amanda Morris Wright, Jimmy Williams, Rebecca Williams, Orlando Ordaz, and Roy McCollough, the Real Parties in Interest (RPIs), sued Relators for fraudulent lien, declaratory judgment, insurance code violations, fraud, independent fraudulent acts by lawyer/law firm, and conspiracy to assert fraudulent lien. According to the petition, a fire and explosion occurred at the Georgia-Pacific plywood mill in Corrigan, Texas on April 26, 2014. The explosion injured several employees and resulted in at least one fatality. Old Republic provided workers’ compensation insurance coverage to Georgia- Pacific and paid benefits to the RPIs. The RPIs also filed a personal injury lawsuit against certain third parties. In their petition against Old Republic, the RPIs alleged that Old Republic sent written

1 Respondent is the Honorable Paul E. White, Judge of the 159th District Court in Angelina County, Texas. notice claiming a lien against the third-party claims based on medical, and wage benefits paid by Old Republic and related to the RPIs’ injuries. The RPIs settled with two of the third parties and proceeded to a jury trial in federal court as to the remaining third parties. The federal court denied Old Republic’s motion to intervene. On September 28, 2018, Relators filed a plea to the jurisdiction and motion to dismiss the RPIs’ lawsuit against them for lack of subject matter jurisdiction. They alleged that the RPIs’ claims arose from Old Republic’s investigation, handling, or settlement of workers’ compensation benefits, and they had not exhausted their administrative remedies under the Texas Workers Compensation Act (the Act). According to Relators, the Division of Workers Compensation (DWC) maintained exclusive jurisdiction to hear claims alleged in the RPIs’ lawsuit. Relators sought dismissal of the RPIs’ claims for fraudulent lien, violations of insurance code Section 541.061, fraud, independent fraudulent acts by lawyer/law firm, and conspiracy to assert fraudulent lien, leaving only the declaratory judgment claim. In a letter to the parties, Respondent denied the plea to the jurisdiction and motion to dismiss. Respondent’s letter states, in pertinent part, as follows:

At the time of the motion hearing on February 25th, I announced an inclination to deny the Plea and Motion in the absence of: 1) case authority dealing solely with a subrogation lien dispute without suspension of [workers’ compensation] benefits; 2) a specific administrative violation as to subrogation liens in Chapter 415; or 3) [an] agency ruling /appeals decision pertaining to subrogation liens pursuant to Chapter 415. Having found none, I make this ruling although I would not be surprised if appellate courts differ with my decision on the basis of an intended “pervasive regulatory scheme” of the Labor Code for disposition by the [DWC] on everything workers’ compensation related.

On March 18, Respondent signed an order denying the plea to the jurisdiction and motion to dismiss. This proceeding followed.

PREREQUISITES TO MANDAMUS Mandamus is an extraordinary remedy. In re Sw. Bell Tel. Co., L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding). A writ of mandamus will issue only when the relator has no adequate remedy by appeal and the trial court committed a clear abuse of discretion. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding). The relator has the burden of establishing both prerequisites. In re Fitzgerald, 429 S.W.3d 886, 891 (Tex. App.—Tyler 2014, orig. proceeding.). To prevent disruption of the orderly processes of

2 government, the denial of a plea to the jurisdiction for failure to exhaust administrative remedies is reviewable by mandamus. See In re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (per curiam, orig. proceeding); see also In re Tex. Mut. Ins. Co., 360 S.W.3d 588, 592 (Tex. App.—Austin 2011, orig. proceeding).

ABUSE OF DISCRETION Relators contend that Respondent abused his discretion by denying their plea to the jurisdiction and motion to dismiss because the RPIs’ claims are within the DWC’s exclusive jurisdiction and the RPIs failed to exhaust their administrative remedies. Standard of Review and Applicable Law A trial court abuses its discretion when it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if it clearly fails to correctly analyze or apply the law. Cerberus Capital, 164 S.W.3d at 382. This standard has different applications in different circumstances. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). When reviewing the trial court’s resolution of factual issues or matters committed to its discretion, we may not substitute our judgment for that of the trial court. Id. The relator must show that the trial court could reasonably have reached only one conclusion. Id. at 840. Our review of the trial court’s determination of the legal principles controlling its ruling is much less deferential. Id. This is because a trial court has no discretion in determining what the law is or applying the law to the facts. Id. Courts of general jurisdiction are presumed to have subject matter jurisdiction absent a contrary showing that the Texas Constitution or other law confers jurisdiction on another court, tribunal, or administrative body. Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002); see also TEX. CONST. art. V, § 8; TEX. GOV’T CODE ANN. §§ 24.007–.008 (West 2004 and West Supp. 2016). Administrative bodies may exercise only those powers the law confers upon them in clear and express language. Subaru of Am., Inc., 84 S.W.3d at 220. Courts will not imply the existence of additional authority for administrative bodies, nor may these bodies create for themselves any excess powers. Id. In deciding whether an administrative body has exclusive jurisdiction, we look to its authorizing legislation for an express grant of exclusive jurisdiction, or for a “pervasive regulatory scheme” indicating an intent to confer exclusive jurisdiction. Emps. Ret. Sys. of Tex. v. Duenez, 288 S.W.3d 905, 908-09 (Tex. 2009). Ordinarily,

3 if an agency has exclusive jurisdiction, a party must exhaust all administrative remedies before seeking judicial review of an agency’s action. Subaru of Am., Inc., 84 S.W.3d at 221.

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in Re: Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds & Guerra, L.C., Timothy K. Singley and Dana M. Gannon, (Tex. Ct. App. 2019).

in Re: Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds & Guerra, L.C., Timothy K. Singley and Dana M. Gannon (in Re: Old Republic Risk Management, Old Republic Insurance Company, Thornton, Biechlin, Reynolds & Guerra, L.C., Timothy K. Singley and Dana M. Gannon) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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