In Re Zurich American Insurance Company v. the State of Texas

Opinions

Fourth Court of Appeals San Antonio, Texas

MEMORANDUM OPINION No. 04-26-00339-CV

IN RE ZURICH AMERICAN INSURANCE COMPANY

Original Mandamus Proceeding 1

Opinion by: H. Todd McCray, Justice Concurring and Dissenting Opinion by: Velia J. Meza, Justice

Sitting: Lori I. Valenzuela, Justice H. Todd McCray, Justice Velia J. Meza, Justice

Delivered and Filed: July 31, 2026

PETITION FOR WRIT OF MANDAMUS CONDITIONALLY GRANTED IN PART AND DENIED IN PART

Relator Zurich American Insurance Company (“Zurich”) files this petition for writ of

mandamus arguing the trial court erred by denying its plea to the jurisdiction and requesting that

we dismiss the remaining claim asserted by the real parties in interest (“RPIs”) against Zurich in

the underlying case. 2 Zurich argues the trial court lacks subject-matter jurisdiction to hear RPIs’

claim because RPIs must first exhaust their administrative remedies with the Texas Department of

1 This proceeding arises out of Cause No. 25-02-0148-CVA, styled Rachel Barrera, individually and as representative of the estate of Eliseo A. Barrera, deceased, and Jacob A. Barrera, Jason A. Barrera, and Celina Elise Barrera v. Mesa Southern CWS Acquisition L.P. d/b/a Mesa Southern Well Servicing L.P. and Zurich American Insurance Company, pending in the 218th Judicial District Court, Atascosa County, Texas, the Honorable Russell Wilson presiding. 2 RPIs are Rachel Barrera, individually and as a representative of the estate of Eliseo Barrera, decedent, Jacob Barrera, Jason Barrera, and Celina Elise Barrera. 04-26-00339-CV

Insurance, Division of Worker’s Compensation. We conditionally grant Zurich’s petition in part

and direct the trial court to grant Zurich’s plea to the jurisdiction. However, we deny the petition

in part because Zurich is not entitled to dismissal of the claim; instead, RPIs must be allowed an

opportunity to replead their claim.

BACKGROUND

RPIs are surviving family members of Eliseo Barrera (“Barrera”) and the representative of

his estate. In their initial petition, RPIs allege that Barrera was employed by Mesa Southern when

he was injured while working. According to the petition, Barrera promptly reported his injuries

and was told by his supervisor that he needed to seek a medical evaluation from a “worker’s

compensation and occupational health services clinic.” However, according to RPIs, this clinic

lacked adequate resources to address Barrera’s injuries, and the clinic directed him to a rural

hospital. From there, Barrera was eventually transferred to a “higher-level-care facility” in San

Antonio. According to the petition, the delays in Barrera’s care resulted in a deterioration of his

condition, ultimately leading to his death.

RPIs allege that Zurich denied Barrera’s claim for worker’s compensation benefits and

failed to conduct an independent and thorough investigation, causing significant financial and

emotional distress. RPIs assert that Zurich violated Chapter 541 of the Texas Insurance Code by:

a. Misrepresenting the terms and coverage of Mr. Barrera’s workers’ compensation policy;

b. Failing to conduct a thorough and unbiased investigation;

c. Engaging in bad faith practices by unjustly denying the claim;

d. Ignoring clear evidence of the work-related nature of Mr. Barrera’s injury and death; and

e. Employing deceptive practices and unreasonable delays in processing the claim.

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Zurich filed a plea to the jurisdiction, arguing the trial court lacked subject matter

jurisdiction over RPIs’ claims against Zurich. Specifically, Zurich alleged that the claims RPIs

asserted were subject to the exclusive jurisdiction of the Texas Department of Insurance, Division

of Workers’ Compensation (“DWC”), pursuant to the Workers’ Compensation Act (“WCA”).

RPIs then filed a response in which they asserted that their claims concern Zurich’s pre-denial

conduct, including misrepresentations about coverage, and that the misrepresentations occurred

outside the claims-handling process. However, RPIs do not specify any alleged misrepresentations

made by Zurich.

RPIs then amended their petition. As amended, the alleged factual background relevant to

Zurich states:

To add insult to injury, Mesa Southern [(Barrera’s employer)] failed to file an incident report following Mr. Barrera’s injury, which, along with Zurich’s own failures, led to the denial of workers’ compensation benefits by Zurich. Instead of conducting an independent and thorough investigation, Zurich relied entirely on representations from Mesa Southern that the injury did not occur on the job and denied the claim without verifying the facts or consulting available evidence to the contrary. Zurich’s denial caused significant financial and emotional hardship for Mr. Barrera’s surviving family members.

RPIs’ assertion that Zurich violated Chapter 541 of the Texas Insurance Code by “Misrepresenting

the terms and coverage of Mr. Barrera’s workers’ compensation policy,” is unchanged from their

original petition, and RPIs did not include any other allegations concerning Zurich’s alleged

misrepresentations.

Zurich then filed a plea to the jurisdiction directed at RPIs’ amended petition. On March

25, 2026, the trial court held a non-evidentiary hearing on Zurich’s plea to the jurisdiction. At the

hearing, RPIs asserted for the first time, through counsel, that Zurich told Mesa Southern to inform

Barrera that he could not go directly to a hospital, but instead had to go first to Nova Medical

Center, which is “one of those workman comp places.” According to counsel the clinic was

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inadequate to treat Barrera’s injury of a ruptured hernia. Counsel asserted: “So that goes to our

first label of misrepresentation of the policy in which he’s required to go to this lesser [in]adequate

care center in order to get the care he needed before he can actually seek medical attention at a

hospital.” Zurich’s counsel noted that none of these arguments were in RPIs’ pleadings, to which

RPIs’ counsel replied that the court could order RPIs to amend its pleading if necessary, rather

than dismiss the claim.

After the hearing, the trial court issued an order granting Zurich’s plea to the jurisdiction

as to all of RPIs’ claims, save for the claim that Zurich misrepresented the terms and coverage of

its workers’ compensation policy. Zurich then filed this mandamus petition, requesting that we

dismiss RPIs’ remaining claim against Zurich.

ANALYSIS

“To be entitled to mandamus relief, a relator must demonstrate (1) the trial court clearly

abused its discretion, and (2) the relator has no adequate remedy by appeal.” In re Reece, 341

S.W.3d 360, 364 (Tex. 2011) (orig. proceeding) (citing In re McAllen Med. Ctr., Inc., 275 S.W.3d

458, 462 (Tex. 2008) (orig. proceeding)). A trial court abuses its discretion when its “ruling is

arbitrary and unreasonable, made without regard for guiding legal principles or supporting

evidence.” In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding).

“Mandamus relief is appropriate when the trial court lacks jurisdiction to hear a case.” In re

Lubbock, 624 S.W.3d 506, 512 (Tex. 2021) (orig. proceeding). “[T]he erroneous denial of a plea

to the jurisdiction based on exclusive agency jurisdiction can justify mandamus relief where it

interferes with the legislatively mandated function and purpose of the agency and is a clear

disruption of the orderly processes of government.” In re Tex. Mut. Ins. Co., 329 S.W.3d 1, 4 (Tex.

App.—San Antonio 2009, orig. proceeding) (internal quotation marks omitted) (quoting In re

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Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004) (orig. proceeding)); see In re Crawford & Co.,

458 S.W.3d 920, 929 (Tex. 2015) (orig. proceeding) (per curiam) (granting mandamus to require

trial court to dismiss claims within DWC’s exclusive jurisdiction); In re Southwestern Bell Tel.

Co., 235 S.W.3d 619, 627 (Tex. 2007) (orig. proceeding) (granting mandamus to require dismissal

of claims over which Public Utility Commission had exclusive jurisdiction).

I. Abuse of Discretion

1. Standard of Review and Applicable Law

A plea to the jurisdiction challenges the trial court’s subject matter jurisdiction. Tex. Dep’t

of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 232 (Tex. 2004). “Whether a pleader has alleged

facts that affirmatively demonstrate a trial court’s subject matter jurisdiction is a question of law

reviewed de novo.” Id. at 226. Where, as here, a plea challenges the pleadings, we determine if the

pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to hear the cause.

Id. If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court’s

jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one

of pleading sufficiency and the plaintiff should be afforded the opportunity to amend. Id. at 226–

27. “[B]ecause we construe pleadings liberally in favor of the pleader, we will grant a plea to the

jurisdiction without an opportunity to replead only if the pleadings affirmatively negate

jurisdiction.” Jones v. Turner, 646 S.W.3d 319, 325 (Tex. 2022); see Miranda, 133 S.W.3d at 227.

“If an agency has exclusive jurisdiction to resolve a dispute, a party must first exhaust

administrative remedies before a trial court has subject matter jurisdiction.” O’Neal v. Ector Cnty.

Indep. Sch. Dist., 251 S.W.3d 50, 51 (Tex. 2008). If the party has not, “the trial court lacks subject-

matter jurisdiction and must dismiss any claim within the agency’s exclusive jurisdiction.” In re

Accident Fund Gen. Ins. Co., 543 S.W.3d 750, 752 (Tex. 2017) (orig. proceeding) (per curiam).

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“Whether an agency has exclusive jurisdiction is a question of law that we review de novo.” Tex.

Mut. Ins. Co. v. Vasquez, No. 04-14-00295-CV, 2015 WL 2339777, at *2 (Tex. App.—San

Antonio May 13, 2015, orig. proceeding) (citing Subaru of America, Inc. v. David McDavid

Nissan, Inc., 84 S.W.3d 212, 222 (Tex. 2002)).

The WCA “provides the exclusive procedures and remedies for claims alleging that a

workers’ compensation carrier has improperly investigated, handled, or settled a workers’ claim

for benefits.” In re Crawford & Co., 458 S.W.3d 920, 923–24 (Tex. 2015). “[F]or claims arising

out of the claims-settlement process, ‘the current Act with its definitions, detailed procedures, and

dispute resolution process demonstrate[s] legislative intent for there to be no alternative

remedies.’” Id. at 925 (quoting Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 340, 456 (Tex. 2012));

see Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 803 (Tex. 2001) (explaining DWC has

jurisdiction over income benefits, preauthorization of medical care, and reimbursement for medical

expenses.). “Until the party has exhausted all administrative remedies, the trial court lacks subject

matter jurisdiction and must deny any claim within the agency’s exclusive jurisdiction.” In re

Entergy Corp., 142 S.W.3d 316, 321–22 (Tex.2004) (orig. proceeding). However, while “claims

against workers’ compensation insurers for unfair settlement practices may not be made under the

Insurance Code,” “claims under the Insurance Code may be made against those insurers for

misrepresenting provisions of their policies.” Ruttiger, 381 S.W.3d at 433.

2. Discussion

Zurich’s plea to the jurisdiction challenges the trial court’s jurisdiction based on RPIs’

pleadings. RPIs’ live, first amended petition contains no specific allegations regarding any

misrepresentation Zurich may have made. Instead, the petition contains minimal allegations

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regarding Zurich, all of which concern the claims-settlement process, which lies within the DWC’s

exclusive jurisdiction until RPIs have exhausted all of their administrative remedies. See Id. at 437.

Under the WCA, “[t]he claims process begins when an employee reports a lost-time injury

or occupational disease to the employer. The employer, as required by the Act, then reports the

injury claim to the carrier.” Ruttiger, 381 S.W.3d at 441 (citing TEX. LAB. CODE ANN. §

409.005(a)). Thus, under the WCA, once Barrera reported his injury to his supervisor, the claims

settlement process had begun.

Here, as pled, all allegations against Zurich concern the claims handling process. The only

specific allegations referring to Zurich are quoted in the background section above. Those

allegations concern matters after Barrera reported his injury to his employer. According to RPIs,

Barrera’s employer, “failed to file an incident report following Mr. Barrera’s injury, which, along

with Zurich’s own failures, led to the denial of workers’ compensation benefits by Zurich.” The

petition next alleges that Zurich failed to conduct a proper investigation. Beyond allegations

directed at Zurich, even liberally construed, nothing in RPIs’ live petition, suggest that Barrera’s

allegedly inadequate medical care was due to a misrepresentation of the worker’s compensation

policy, whether by Zurich or anyone else. The petition alleges: “Despite Mr. Barrera’s prompt

reporting, [his supervisor] failed to ensure that Mr. Barrera received appropriate and timely

medical care.” It also alleges that Barrera “was directed” to certain medical providers before

receiving care in San Antonio. However, nothing in the petition suggests that that the supervisor’s

asserted failure or Barrera’s direction to other medical providers resulted from a misrepresentation.

The only reference to misrepresentation in the allegations is the assertion in RPIs’ claim

against Zurich that it violated the Texas Insurance Code by “[m]isrepresenting the terms and

coverage of Mr. Barrera’s workers’ compensation”; however, in light of previous allegations, this

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assertion can only be understood as referring to Zurich’s conduct after Barrera’s injury. Cf. Tex.

Mut. Ins. Co. v. Morris, 383 S.W.3d 146, 150 (Tex. 2012) (denying plaintiff’s claim under Texas

Insurance Code section 541.061 because plaintiff did not “point to any statements or actions by

[insurer] that he contends constituted untrue statements about or failure to disclose something

about the insurance policy.”); Tex. Dep’t of Transp. v. Olivares, 316 S.W.3d 89, 99 (Tex. App.—

Houston [14th Dist.] 2010, no pet.) (holding plaintiffs did not allege non-discretionary

governmental acts necessary to establish jurisdiction where petition described acts as “non-

discretionary,” without further elaboration).

In short, even construing the petition in RPIs’ favor, we cannot discern any alleged

misrepresentation outside of the claims-settlement context. Because RPIs’ allegations against

Zurich relate exclusively to the claims-settlement context, DWC has exclusive jurisdiction over

the claims until RPIs exhaust their administrative remedies. See Crawford, 458 S.W.3d at 926;

O’Neal, 251 S.W.3d at 51. Neither party represents that RPIs have exhausted their remedies

through the DWC. Therefore, on these pleadings, the trial court abused its discretion by failing to

grant Zurich’s plea to the jurisdiction as to RPI’s misrepresentation claim. See In re Tex. Mut. Ins.

Co., 510 S.W.3d 552, 559 (Tex. App.—El Paso 2016, orig. proceeding).

However, the trial court did not abuse its discretion by refusing to dismiss RPIs’ claim.

RPIs argued in their response in the trial court and at the plea hearing that their allegations concern

pre-claims-settlement statements. They assert that Zurich misrepresented the policy by telling

Mesa Southern they would not cover an injury unless the injured person sought care at a lower-

level facility first, and they allege this misrepresentation caused delays in Barrera’s care which

ultimately caused his death. Additionally, at the plea to the jurisdiction hearing, the RPIs expressed

to the trial court that they could have the option to amend their pleadings and bring the allegations

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properly before the court. Because our review is confined to a liberal construction of the pleadings,

and because RPIs’ live petition does not contain the assertions RPIs made elsewhere, the trial court

was required to grant the plea to the jurisdiction for the reasons just discussed. See Jones v. Turner,

646 S.W.3d 319, 325 (Tex. 2022). Nevertheless, RPIs suggest allegations which could survive a

jurisdictional challenge. See Crawford, 458 S.W.3d at 927. This view is consistent with the

Supreme Court’s holding in Texas Tech University System v. Martinez:

Martinez failed to allege facts that affirmatively demonstrate the court’s jurisdiction over her claims against the TTU System or the Board because, as currently pleaded, her petition does not contain sufficient facts to demonstrate that either the TTU System or the Board could be liable to her under Section 21.051. The trial court therefore should have granted the TTU System and the Board’s plea to the jurisdiction. But because Martinez’s petition does not affirmatively demonstrate that she cannot cure the jurisdictional defect, she should be afforded an opportunity to replead. We therefore reverse the court of appeals’ judgment in part and remand to the trial court for further proceedings.

Tex. Tech Univ. Sys. v. Martinez, 691 S.W.3d 415, 425 (Tex. 2024). Because RPIs’ pleading does

not demonstrate an incurable defect, RPIs should be afforded an opportunity to amend their claim

asserting Zurich violated Chapter 541 of the Texas Insurance Code by misrepresenting its policy.

See Cnty. of Cameron v. Brown, 80 S.W.3d 549, 559 (Tex. 2002) (holding plaintiffs should be

afforded an opportunity to amend where plaintiffs failed to plead an element of their claim).

II. Inadequate Remedy by Appeal

Mandamus review is generally unavailable when a private party challenges a trial court’s

denial of a plea to the jurisdiction. See In re Tafel, No. 24-1062, 2026 WL 1801256 (Tex. June 19,

2026) (orig. proceeding). However, where an agency has exclusive jurisdiction over a dispute,

mandamus review is necessary to prevent a disruption of the orderly processes of government. See

id. (specifying exclusive agency jurisdiction over a dispute as a unique circumstance warranting

mandamus relief); In re Crawford, 458 S.W.3d at 929; In re Entergy, 142 S.W.3d at 321; In re

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Mid–Century Ins. Co. of Tex., 426 S.W.3d 169, 178 (Tex. App.—Houston [1st Dist.] 2012, orig.

proceeding).

Because RPIs’ live petition includes only a claim against Zurich that is within the DWC’s

exclusive jurisdiction pursuant to the WCA, mandamus relief is appropriate to prevent a disruption

to the sole, administrative process for resolving this claim. See Crawford, 458 S.W.3d at 929; see

also In re Illinois Employers Ins. of Wausau, 497 S.W.3d 93 (Tex. App.—Houston [14th Dist.]

2016, orig. proceeding) (“Forcing [insurer] to try Jones’s common law bad faith and statutory

violation claims would disrupt the orderly process of government by interfering with the

administration of workers’ compensation claims.”). Unless and until RPIs plead a claim against

Zurich that falls outside of DWC’s exclusive jurisdiction, their claims against Zurich must proceed

before the DWC. See Crawford, 458 S.W.3d at 927.

CONCLUSION

We hold the trial court abused its discretion by failing to grant Zurich’s plea to the

jurisdiction as to RPIs’ claim that Zurich violated Chapter 541 of the Texas Insurance Code by

misrepresenting the terms and coverage of Barrera’s workers’ compensation policy because this

claim falls within the DWC’s exclusive jurisdiction. See Crawford 458 S.W.3d 920. However, the

trial court did not abuse its discretion by failing to dismiss this claim because RPIs’ pleadings do

not demonstrate incurable defect in jurisdiction and RPIs should be allowed an opportunity to

replead. See Brown, 80 S.W.3d at 559. We are confident that the trial court will reconsider its

ruling, grant Zurich’s plea to the jurisdiction, and allow RPIs an opportunity to amend. The writ

of mandamus shall issue only if the trial court fails to comply within a reasonable time.

H. Todd McCray, Justice

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