Myers v. Employers Ins Wausau

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 3, 2001
• Docket: 00-41469
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-41469

Summary Calendar

CAROL MYERS, Plaintiff-Appellant,

versus

EMPLOYERS INSURANCE OF WAUSAU, A MUTUAL COMPANY, Defendant-Appellee.

Appeal from the United States District Court For the Eastern District of Texas (1:00-CV-172)

June 29, 2001 Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.

PER CURIAM:*

Carol Myers appeals the district court’s order granting

summary judgment to Employers Insurance on statute of limitations

grounds. Having reviewed her arguments, we agree with the judgment

of the district court.

Myers suffered a workplace injury and filed a worker’s

compensation claim. Parts of her claim were denied. She initiated

an administrative dispute resolution proceeding through the Texas

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Worker’s Compensation Commission, and as a result her claims were

eventually approved. Myers then sued, claiming that the delay in

treatment exacerbated her injury.

The district court granted summary judgment to Employers

Insurance on the grounds that the statute of limitations had run on

Myers’s claim. The applicable statute of limitations is two

years.1 Myers filed her lawsuit more than two years after her

benefits were initially denied, but less than two years after the

conclusion of her administrative proceeding. If, therefore, the

statute of limitations began to run with the denial of benefits,

her lawsuit was untimely and the judgment of the district court

must be affirmed. If, by contrast, the statute did not begin to

run until her administrative remedies were exhausted, then her

lawsuit was timely and the judgment of the district court must be

reversed.

Under Texas law, for statute of limitations purposes, “a cause

of action generally accrues at the time when facts come into

existence which authorize a claimant to seek a judicial remedy.”2

For a case challenging the denial of insurance benefits, that time

will ordinarily be the moment at which benefits were denied.3 The

Texas worker’s compensation scheme, however, provides for an

1 See Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 827 (Tex. 1991). 2 Id. at 828. 3 Id.

2 administrative review process.4 When a trial court hears worker’s

compensation cases, it does so on appeal from the decision of the

administrative agency, and only has jurisdiction to do so once the

administrative remedies are complete.5 Thus, at least as regards

a claim for denial of benefits, a plaintiff is only authorized to

seek a judicial remedy once her administrative remedies are

exhausted.

The question raised by this case is whether or not the same

rule should apply to claims other than those for benefits denied.

Myers seeks to recover damages for bad faith denial of coverage.

It is clear that the Worker’s Compensation Commission cannot grant

the relief Myers seeks–the Commission can only award worker’s

compensation benefits, and cannot award tort, contract, or punitive

damages.6 On the other hand, the Commission can determine whether

or not Myers was entitled to benefits in the first place. While a

court would review that determination de novo, the Texas statutory

4 See Continental Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 396 (Tex. 2000) (defining benefits available under the Texas Worker’s Compensation Act to include medical benefits, and stating that “disputes concerning a carrier’s liability for benefits are resolved through the dispute resolution procedures . . . involv[ing] a benefit review conference, a contested case hearing, and an appeal to the commission appeals panel”). 5 See Ankrom v. Dallas Cowboys Football Club, Ltd., 900 S.W.2d 75, 77 (Tex. App. - Dallas 1995). 6 See Golden v. Employers Ins. of Wausau, 981 F. Supp. 467 (S.D. Tex. 1997).

3 scheme clearly contemplates that the Commission will decide in the

first instance.

The Texas Supreme Court has not passed on the question of

whether a plaintiff must exhaust her administrative remedies before

pursuing claims for relief not grantable by the Commission. The

Texas appellate courts are divided on the issue.7 The Fifth

Circuit, however, has made an Erie guess. In Northwinds Abatement,

Inc. v. Employers Insurance of Wausau,8 we held that where the

Worker’s Compensation Commission “has no power to provide the

remedy sought, then, exclusive jurisdiction cannot rest in that

body.”9 We therefore held that a district court may take original

jurisdiction over such a claim before the administrative remedies

are exhausted.10 In order to protect the statutory scheme providing

for the Commission to determine some issues in the first instance,

we instructed the district court to hold the case in abeyance until

the administrative proceeding was complete.11 We reaffirmed our

7 See Stonebrand Ins. Co. v. Employers Ins. of Wausau, 974 F. Supp. 1005, 1008-09 (S.D. Tex. 1997) (collecting Texas cases), aff’d, 139 F.3d 1052 (5th Cir. 1998). 8 69 F.3d 1304 (5th Cir. 1995). 9 Id. at 1310. 10 Id. at 1310-11. 11 Id. at 1311.

4 guess in Stonebrand Insurance Company v. Employers Insurance of

Wausau.12

Those decisions control until such time as the Texas Supreme

Court speaks to this issue. Accordingly, we hold that Myers was

authorized to seek a judicial remedy for tort and other damages as

soon as her benefits were wrongfully denied. Her obligation to

exhaust administrative remedies applied only to her claim for the

benefits themselves. The statute of limitations therefore expired

before Myers filed her suit, and the district court was correct to

so hold.

AFFIRMED.

12 139 F.3d 1052, 1055 (5th Cir. 1998).