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OPINION
No. 04-08-00006-CV
Marco FUNES, Appellant
v.
ELDRIDGE ELECTRIC COMPANY, Appellee
From the 45th Judicial District Court, Bexar County, Texas Trial Court No. 2006-CI-12116 Honorable John D. Gabriel, Jr., Judge Presiding
Opinion by: Phylis J. Speedlin, Justice
Sitting: Karen Angelini, Justice Phylis J. Speedlin, Justice Steven C. Hilbig, Justice
Delivered and Filed: October 1, 2008
AFFIRMED
In this workers’ compensation case, we decide whether a subcontractor established as a
matter of law that the exclusive remedy defense under the Texas Workers’ Compensation Act (the
“Act”) protects it from suit brought by an employee of another subcontractor on the same work site.
Because we conclude that it does, we affirm the trial court’s judgment.
GENERAL AND PROCEDURAL BACKGROUND 04-08-00006-CV
According to plaintiff’s original petition, Marco Funes, an employee of Baker Drywall Co.,
Inc., sued Eldridge Electric Company for injuries he sustained when he stepped on a pipe negligently
left on the floor of a construction site by an Eldridge Electric employee. At the time of the accident,
both Baker Drywall and Eldridge Electric were subcontractors for Clayco Construction, Inc., the
general contractor on a renovation project involving the HEB Meat Packing Plant in San Antonio,
Texas. Eldridge Electric filed a traditional motion for summary judgment on the affirmative defense
that the Texas Workers’ Compensation Act bars Funes’s tort claims. The trial court granted
Eldridge Electric’s summary judgment and this appeal followed.
STANDARD OF REVIEW
Appellate courts review summary judgments de novo. Valence Operating Co. v. Dorsett,
164 S.W.3d 656, 661 (Tex. 2005); Loeffler v. Lytle Indep. Sch. Dist., 211 S.W.3d 331, 339
(Tex. App.—San Antonio 2006, pet. denied). When reviewing a motion for summary judgment, we
take the nonmovant’s evidence as true, indulge every reasonable inference in favor of the
nonmovant, and resolve all doubts in favor of the nonmovant. M.D. Anderson Hosp. & Tumor Inst.
v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).
Under our Rules of Civil Procedure, the trial court must render the judgment sought by the
moving party if the summary judgment evidence shows that “there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law . . . .” TEX. R. CIV. P.
166a(c). Therefore, the issue on appeal is whether the movant met the summary judgment burden
by establishing that no genuine issue of material fact exists and that the movant is entitled to
summary judgment as a matter of law. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215
(Tex. 2002). When a defendant moves for summary judgment based on an affirmative defense, like
the exclusive remedies provision of the Texas Workers’ Compensation Act, the defendant must
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conclusively prove each element of the defense as a matter of law. City of Lancaster v. Chambers,
883 S.W.2d 650, 653 (Tex. 1994). We view the summary judgment proof in the light most
favorable to the non-movant, and all doubts as to the existence of a genuine issue of material fact
are resolved in the non-movant’s favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49
(Tex. 1985).
DISCUSSION
Eldridge Electric sought summary judgment on the basis that Funes’s claims are barred under
the exclusive remedies provision of the Texas Workers’ Compensation Act. TEX. LAB. CODE ANN.
§ 408.001(a) (Vernon 2006). The purpose of the Act is to provide prompt remuneration to
employees who sustain injuries in the course and scope of their employment. Wingfoot Enter. v.
Alvarado, 111 S.W.3d 134, 142 (Tex. 2003); Hughes Wood Prod., Inc. v. Wagner, 18 S.W.3d 202,
206 (Tex. 2000). The Act relieves employees of the burden of proving their employer’s negligence,
and instead provides timely compensation for injuries sustained on the job. Wingfoot, 111 S.W.3d
at 142; Hughes, 18 S.W.3d at 206-07. In exchange for this prompt recovery, the exclusive remedies
provision prohibits an employee from seeking common law remedies from his employer, as well as
his employer’s agents, servants, and employees, for personal injuries sustained in the course and
scope of his employment. Wingfoot, 111 S.W.3d at 142; Hughes, 18 S.W.3d at 207.
Specifically, the Act provides that, “[r]ecovery of workers’ compensation benefits is the
exclusive remedy of an employee covered by workers’ compensation insurance coverage . . . against
the employer or an agent or employee of the employer for . . . a work-related injury sustained by the
employee.” TEX. LAB. CODE ANN. § 408.001(a). Therefore, to invoke the Act’s bar, Eldridge
Electric was required to establish that (1) Funes sustained a work-related injury, (2) he was covered
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by workers’ compensation insurance coverage, and (3) and he is now seeking to sue his “employer.”
Id. The parties do not dispute that Funes sustained a work-related injury or that he was paid
workers’ compensation benefits. The parties do dispute, however, whether Eldridge Electric, as a
subcontractor on the same project as Funes’s employer, can benefit from the Act’s exclusive remedy
bar. See TEX. LAB. CODE ANN. § 48.001(a), § 406.123 (Vernon 2006).
Basis of Eldridge Electric’s Summary Judgment Motion
Eldridge Electric moved for summary judgment on the basis that Clayco, the general
contractor, was the statutory employer of all employees on the construction site, including Eldridge
Electric and Baker Drywall, by virtue of an Owner Controlled Insurance Program (“OCIP”)
implemented by the property owner, HEB. In support of its position, Eldridge Electric relied on
language found within the Act providing that where a general contractor enters into a written
agreement to provide workers’ compensation insurance to a subcontractor and its employees, the
general contractor is made the “employer” of the subcontractor and its employees for purposes of
the Act. See TEX. LAB. CODE ANN. § 406.123.1 Eldridge Electric further argued that Clayco’s
immunity under the Act extends to all participating subcontractors and their employees, thereby
precluding Funes’s suit against Eldridge Electric, a subcontractor. See Etie v. Walsh & Albert Co.,
1 … Section 406.123 of the Texas Labor Code states in relevant part as follows:
(a) A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the subcontractor. ... (d) If a general contractor . . . elects to provide coverage under Subsection (a) . . . , then, notwithstanding Section 415.006, the actual premiums, based on payroll, that are paid or incurred by the general contractor . . . for the coverage may be deducted from the contract price or other amount owed to the subcontractor . . . by the general contractor . . . . (e) An agreement under this section makes the general contractor the employer of the subcontractor and the subcontractor’s employees only for purposes of the workers’ compensation laws of this state.
TEX. LAB. CODE ANN. § 406.123 (a), (d), (e) (Vernon 2006).
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Ltd., 135 S.W.3d 764, 768 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (holding that the
Act’s “deemed employer/employee relationship extends throughout all tiers of subcontractors when
the general contractor has purchased workers’ compensation insurance that covers all of the workers
on the site. All such participating employers/subcontractors are thus immune from suit.”).
Summary Judgment Evidence
The summary judgment evidence establishes that both Eldridge Electric and Funes’s
employer, Baker Drywall, were subcontractors employed by Clayco, the general contractor, on a
renovation project for HEB. As the property owner, HEB implemented and paid for an OCIP to
furnish certain insurance coverage for on-site activities for the project, including workers’
compensation and employer’s liability insurance. Pursuant to the contract between HEB and
Clayco, HEB mandated that Clayco “shall comply and shall require its Subcontractors to comply
with the terms [of its OCIP].” The summary judgment record confirms that Clayco did require both
Baker Drywall and Eldridge Electric to enroll in the OCIP, which provided workers’ compensation
insurance coverage for Baker Drywall, Eldridge Electric, and all of their employees. The summary
judgment record contains the contract between Clayco and Baker Drywall, which explicitly states
under the heading “Scope of Work” and subheading “Inclusions” that “Subcontractor is to be
enrolled in the HEB OCIP insurance program prior to start of any work.” The record also contains
the contract between Clayco and Eldridge Electric which includes a substantially similar provision.
Clayco, Eldridge Electric, and Baker Drywall each submitted an enrollment form directly to HEB,
and HEB’s insurance broker then issued each company its own insurance policy. According to
Bobby Hines, Vice President for Eldridge Electric, Clayco deducted the actual cost of the insurance
premiums from the agreed contract price due each subcontractor. When Funes was injured at the
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work site, he sought and received workers’ compensation benefits under the policy issued to his
direct employer Baker Drywall.
Analysis
Funes argues that Eldridge Electric’s summary judgment evidence fails to show application
of, and compliance with, section 406.123 of the Act under which Eldridge Electric claims it is
entitled to summary judgment. See TEX. LAB. CODE ANN. § 406.123. Funes first contends that the
statute requires Clayco, the general contractor, to provide coverage directly to the subcontractor.
Id. § 406.123(a). In support of his interpretation, Funes points to the wording of section 406.123(a)
which reads, “[a] general contractor and a subcontractor may enter into a written agreement under
which the general contractor provides workers’ compensation insurance coverage to the
subcontractor and the employees of the subcontractor.” Id. (emphasis added). Here, Funes claims
the summary judgment evidence fails to establish as a matter of law that Clayco, as the general
contractor, directly provided the workers’ compensation insurance to the subcontractors. Funes
points to the Eldridge Electric Vice President’s affidavit as establishing the contrary because it
states, “HEB furnished certain insurance coverage, including Workers’ Compensation and
Employer’s Liability Insurance, to various contractors, including Eldridge Electric, for on-site
activities for the Renovation Project under HEB’s Owner Controlled Insurance Program (“OCIP”).”
(emphasis added).
In response, Eldridge Electric asserts that Clayco, as the general contractor, contracted with
its subcontractors to ensure compliance with the OCIP; therefore, Eldridge Electric argues Clayco
was “instrumental” in providing the coverage because it required Baker Drywall and Eldridge
Electric to enroll in the OCIP and deducted the cost of the actual premiums from the contract price
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paid to each subcontractor.2 Eldridge Electric argues, “[i]n other words, there was an agreement
between Clayco and the subcontractors for the provision of workers’ compensation insurance. It
does not matter which entity actually set up or paid for the program, the subcontract agreements
incorporated and implemented a workers’ compensation insurance program for the subcontractors,
including Eldridge Electric and Baker Drywall.”3
Did Clayco “provide” Eldridge Electric insurance within the meaning of the Act?
Whether Clayco “provided” Eldridge Electric with workers’ compensation insurance within
the meaning of section 406.123(a) of the Act is a question of statutory construction. When
construing statutes, courts must ascertain and give effect to the Legislature’s intent as expressed by
the language of the statute. City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008); State
v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). Words and phrases must be read in context and
construed according to the rules of grammar and common usage. TEX. GOV’T CODE ANN.
§ 311.011(a) (Vernon 2005). Courts must use definitions prescribed by the Legislature and any
technical or particular meaning the words have acquired. Id. § 311.011(b) (Vernon 2005). Where
such does not exist, courts must construe the statute’s words according to their plain and common
meaning, Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004), unless
2 … Eldridge Electric argues the statutory provisions at issue do not require the general contractor to have paid for the coverage, so long as there is a compensation policy in force. See Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 842 (Tex. App.—Houston [14th Dist.] 1996, writ denied). 3 … On appeal, Eldridge Electric makes an alternative argument that under the authority of Wingfoot, because HEB as the premises owner procured coverage for the general contractor and the subcontractors, any negligence suit by the subcontractor’s employee is barred as against both the general contractor and any subcontractors. See Wingfoot, 111 S.W.3d at 142; see also Entergy Gulf States, Inc. v. Summers, No. 05-0272, 2007 WL 2458027, at *3 (Tex. Aug. 31, 2007, reh’g granted), 50 Tex. Sup. Ct. J. 1140 (holding a premises owner may qualify as a general contractor entitled to the exclusive remedy defense under the Texas Workers’ Compensation Act). Eldridge’s argument fails, however, because a summary judgment cannot be affirmed on any ground not specifically presented in the motion for summary judgment. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002). Eldridge’s motion for summary judgment was based on the theory that the general contractor Clayco, not the premises owner, had “provided” the insurance.
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a contrary intention is apparent from the context, Taylor v. Firemen’s & Policemen’s Civil Service
Comm’n of City of Lubbock, 616 S.W.2d 187, 189 (Tex. 1981), or unless such a construction leads
to absurd results. Univ. of Tex. Sw. Med. Ctr. at Dallas v. Loutzenhiser, 140 S.W.3d 351, 356
(Tex. 2004). When the statutory text is unambiguous, courts must adopt the interpretation supported
by the statute’s plain language unless that interpretation would lead to absurd results. Tex. Dep’t
of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 177 (Tex. 2004).
Courts may also consider, among other factors, the legislative history, common law or former
statutory provisions, and the consequences of a particular construction. TEX. GOV’T CODE ANN.
§ 311.023(3)-(5) (Vernon 2005). Courts will presume that the Legislature intended a just and
reasonable result by enacting the statute. TEX. GOV’T CODE ANN. § 311.021(3) (Vernon 2005).
Here, the Legislature has not prescribed a particular definition of “provides.” Further, we
detect no apparent intent by the Legislature to stray from the plain and common meaning of the word
within the language and context of the statute. Thus, we apply the plain and common meaning of
the word “provide” within its reasonable context, which we determine to be “to supply or to make
available.” See WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 948 (1990) (provide: “to
supply or make available (something wanted or needed)”). With this definition in mind, we construe
subsection 406.123(a) to mean the following: where a general contractor and a subcontractor enter
into a written agreement under which the general contractor supplies or makes available workers’
compensation insurance coverage to the subcontractor and its employees, the general contractor is
the employer of the subcontractor and its employees for purposes of the Workers’ Compensation
Act, as provided under subsection 406.123(e). See TEX. LAB. CODE ANN. § 406.123 (a), (e).
To hold to the contrary, that Clayco did not provide the insurance, would produce an unjust
and unreasonable result. Where, as here, the premises owner has implemented an owner controlled
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insurance program and contractually binds its general contractor to require all subcontractors to
enroll in the OCIP, to hold that the general contractor did not “provide” the insurance would
preclude protection of the general contractor, whom the Legislature clearly intended to protect under
subsections 406.123(a) and (e). In that hypothetical, the general contractor would be required to
procure a second compensation insurance program in order to qualify under the statute as an
“employer” who “provides” insurance, and thereby obtain the Act’s protection. See id. § 406.123(e).
This, however, makes little sense because of its redundancy—the premises owner has already
established a program in which all, including the general contractor, are required to enroll, and under
which all, including the general contractor, are intended to be protected. The resulting “double
coverage” for, in effect, single protection is superfluous, and outside any reasonable intent of the
Legislature.
The summary judgment evidence conclusively establishes that Clayco, the general
contractor, did supply or make available workers’ compensation insurance by mandating through
its written agreement with each of its subcontractors that they enroll in the available OCIP. Because
Clayco made this insurance available, we hold that Clayco “provided” the insurance to Baker
Drywall and Eldridge Electric within the meaning of the statute. TEX. LAB. CODE ANN. §
406.123(a). Because Clayco provided the insurance, Clayco qualifies as the statutory “employer”
for purposes of the Act. Id. § 406.123(e). Finally, because Clayco qualifies as the statutory
employer for its subcontractors, including Baker Drywall and Eldridge Electric and all their
employees, the exclusive remedies provision of the Act bars Funes’s tort suit against Eldridge
Electric. See Etie, 135 S.W.3d at 768.
Although its opinion is not binding on us, we note that the Fort Worth Court of Appeals held
in a factually similar case, Rice v. HCBeck, Ltd., No. 2-05-239-CV, 2006 WL 908761 (Tex.
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App.—Fort Worth Apr. 6, 2006, pet. granted), that “[r]equiring is not providing.” Id. at *4
(emphasis added). In that case, a premises owner contracted with a general contractor to perform
construction work on his property. Id. at *1. The general contractor hired a subcontractor, whose
employee was injured on the job. Id. at *1-2. After the injured employee collected under the policy,
he sued the general contractor, arguing that the general contractor did not “provide” his insurance.
Id. at *2. The trial court granted summary judgment to the defendant general contractor, but the
appellate court reversed, holding that section 406.123(a) did not apply because the general
contractor did not “provide” the insurance. Id. at *2, 4. We find Rice to be distinguishable from this
case. First, in Rice the contract between the premises owner and the general contractor required only
that all subcontractors apply for enrollment in the OCIP, whereas in this case, the HEB contract
mandates that Clayco “shall require” its subcontractors to comply with the OCIP. See id. at *4. The
Clayco contract with its subcontractors, in turn, required them “to be enrolled” in the OCIP prior
to the start of any work. Secondly, in Rice, the premises owner was free to deny the subcontractor’s
application for enrollment. Id. That is not the case here. Furthermore, assuming the premises
owner accepted the application in Rice, it was still free to terminate the OCIP at any time, in which
case the contract required the subcontractor to provide its own “alternate insurance.” Id. Here, the
Clayco contracts require the subcontractors to enroll in HEB’s OCIP, and contain no “alternate
insurance” provision.
Did Eldridge Electric Fail to Comply with Subsection 406.123(f)?
Funes also argues that Eldridge Electric’s summary judgment evidence fails to show
compliance with subsection 406.123(f) of the Act because there is no evidence that Clayco filed a
copy of the written agreement with the workers’ compensation insurance carrier within ten days of
the date the contract was executed. See TEX. LAB. CODE ANN. § 406.123(f) (Vernon 2006)
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(requiring a general contractor to file a copy of “an agreement entered into under this section with
the general contractor’s workers’ compensation insurance carrier not later than the 10th day after
the date on which the contract is executed”) (emphasis added). Therefore, Funes concludes that
Eldridge Electric failed to satisfy an essential element of his affirmative defense. We disagree. We
do not read subsection 406.123(f) to be an element of the Act’s exclusive remedies bar. See TEX.
LAB. CODE ANN. § 408.001(a). Rather, failure to submit a copy of the agreement merely constitutes
an administrative violation. TEX. LAB. CODE ANN. § 406.123(g) (Vernon 2006). On the other hand,
subsections 406.123(a) and (e) elaborate on who may qualify as an “employer,” and thus pertain to
the essential third element of the affirmative defense. Id. § 406.123(a), (e).
CONCLUSION
We conclude the summary judgment evidence establishes as a matter of law that Clayco, as
the general contractor, qualifies as a statutory employer of Baker Drywall, Eldridge Electric and
their employees, including Funes, for purposes of the Texas Workers’ Compensation Act. See TEX.
LAB. CODE ANN. § 406.123(a), (e). Because the statutory employer/employee relationship extends
to all tiers of subcontractors, Eldridge Electric, as a participating subcontractor is entitled to
immunity from suit under the Act; therefore, the exclusive remedies provision of the Act bars
Funes’s claims against Eldridge Electric. See id. § 408.001(a); see also Etie, 135 S.W.3d at 768.
Accordingly, we affirm the judgment of the trial court.
Phylis J. Speedlin, Justice
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