Phillip Michelsen v. Lorel Jones, Jr.

• Court: Court of Appeals of Texas
• Decided: July 14, 2011
• Docket: 14-10-00823-CV
• Status: Published

Opinion

Affirmed and Memorandum Opinion filed July 14, 2011.

In The

Fourteenth Court of Appeals

NO. 14-10-00823-CV

Phillip Michelsen, Appellant

V.

LoUrel Jones, Jr., Appellee

On Appeal from the 133rd District Court

Harris County, Texas

Trial Court Cause No. 2004-11947

MEMORANDUM  OPINION

This appeal arises from a car accident involving appellant Phillip Michelsen and appellee Lourel Jones, Jr.  In conformity with the jury’s verdict, the trial court signed a judgment awarding Jones $32,500 in damages for past medical expenses, lost earning capacity, pain, suffering, and mental anguish.  We affirm.

BACKGROUND

Michelsen hit Jones’s vehicle from behind in 2002, allegedly injuring Jones’s back and neck.  Jones sued Michelsen, alleging that (1) Michelsen was responsible for causing the collision and Jones’s resulting injuries; and (2) Jones suffered damages for medical expenses, lost earning capacity, physical impairment, pain, suffering and mental anguish.  Michelsen admitted liability for the collision, but claimed that the collision did not cause Jones’s injuries.    

Harris County intervened, allegedly seeking reimbursement from Michelsen for worker’s compensation benefits paid to Jones after the collision.[1]  See Tex. Lab. Code Ann. § 417.001(b) (Vernon 2006) (“If a benefit is claimed by an injured employee or a legal beneficiary of the employee, the insurance carrier is subrogated to the rights of the injured employee and may enforce the liability of the third party . . . .  The insurance carrier’s subrogation interest is limited to the amount of the total benefits paid or assumed by the carrier to the employee or the legal beneficiary . . . .”).  Michelsen paid Harris County $1,716.48 to release Michelsen from “any and all claims” related to the alleged “worker[’s] compensation lien” created when Harris County paid these benefits to Jones.  Harris County subsequently non-suited its claims against Michelsen.

The issues of causation and damages were tried to a jury.  The jury awarded Jones $15,000 for past medical expenses, $15,000 for past lost income, and $2,500 for past pain, suffering and mental anguish.  The trial court signed a judgment in conformity with the jury’s findings.  Michelsen filed a timely motion to modify the final judgment, which the trial court denied. 

Michelsen appeals, arguing that the trial court erred in denying his motion to modify the final judgment because (1) the trial court was required to “offset” Jones’s damages award based on his assertion that Harris County compensated Jones for all his past medical expenses and lost income; (2) the one satisfaction rule prevents Jones from recovering damages that allegedly were compensated by Harris County; and (3) the judgment awards pre-judgment interest “without consideration of the tolling for settlement offers.”

ANALYSIS

We review a trial court’s denial of a motion to modify a final judgment for abuse of discretion.  See Wagner v. Edlund, 229 S.W.3d 870, 879 (Tex. App.—Dallas 2007, pet. denied); Ferguson v. Naylor, 860 S.W.2d 123, 127 (Tex. App.—Amarillo 1993, writ denied).  A trial court abuses its discretion when it acts in an arbitrary or unreasonable manner, or if it acts without reference to any guiding rules or principles.  Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985).   

I.         Settlement between Michelsen and Harris County

Michelsen argues in his first two issues that the trial court should have modified the judgment by reducing or eliminating Jones’s damages for past medical expenses and lost earning capacity.  Michelsen’s arguments are based on his assertion that Harris County (1) paid benefits to compensate Jones for his past medical expenses and lost earning capacity; (2) consequently had a subrogated claim against Michelsen for recovery of Jones’s damages and reimbursement for paid benefits; and (3) settled this claim and assigned all subrogation and reimbursement rights to Michelsen. 

A.        Settlement Credit

Michelsen argues in his first issue that the trial court should have applied a “settlement credit” to reduce or eliminate Jones’s damages award.  None of the authorities cited by Michelsen in support of this argument on appeal are applicable.  See Utts v. Short, 81 S.W.3d 822, 829–30 (Tex. 2002); Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 926–29 (Tex. 1998); Oyster Creek Fin. Corp. v. Richwood Inv. II, Inc., 176 S.W.3d 307, 326–28 (Tex. App.—Houston [1st Dist.] 2004, pet. denied); Tex. Capital Sec., Inc. v. Sandefer, 108 S.W.3d 923, 926–27 (Tex. App.—Texarkana 2003, pet. denied).      

Michelsen’s “settlement credit” argument is predicated on his assertion that Harris County paid worker’s compensation benefits to Jones after the collision, and that Michelsen paid Harris County to release its reimbursement claim against him.  The cases cited by Michelsen would support his claim for a “settlement credit” only if he argued that (1) Jones benefitted from settlement proceeds Michelsen paid to Harris County; or (2) Jones received settlement proceeds from another defendant who had been potentially liable for the same injuries caused by Michelsen.  See Utts, 81 S.W.3d at 829–30 (non-settling defendant seeking settlement credit based on assertion that a non-settling plaintiff benefitted from the settlement proceeds of another plaintiff’s settlement must prove such an assertion); Ellender, 968 S.W.2d at 920, 926–27 (analyzing non-settling defendant’s claim for settlement credit based on amount of proceeds paid by joint tortfeasors); Oyster Creek, 176 S.W.3d at 326–29 (trial court did not abuse its discretion in applying settlement credit to non-settling defendant’s damages pursuant to “one satisfaction rule” because plaintiff’s causes of action against settling and non-settling defendants were based on a single injury to plaintiff; distinguishing authorities holding that defendant cannot obtain a “settlement credit” based on compensation by non-defendant third parties because these cases “involve third parties who[m] the plaintiff had never sued”); Sandefer, 108 S.W.3d at 926–27 (analyzing non-settling defendant’s claim for settlement credit based on amount of settlement proceeds paid by joint tortfeasor); see also Tex. Civ. Prac. & Rem. Code Ann. § 33.012(b), (e) (Vernon 2008) (“If the claimant has settled with one or more persons, the court shall . . . reduce the amount of damages to be recovered by the claimant . . . by the sum of the dollar amount of all settlements . . . .  This section shall not apply to benefits paid by or on behalf of an employer to an employee pursuant to workers’ compensation insurance coverage . . . .”).    

Even if Michelsen had based his argument on an alternative theory and properly supported it with relevant authority on appeal, he cannot show entitlement to relief.  To claim an offset based on benefits paid by Harris County, or to seek reimbursement as an assignee of Harris County, Michelsen had the burden to prove the amount Harris County allegedly paid in benefits to Jones.  See, e.g., Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 936 (Tex. 1980) (“The right of offset is an affirmative defense.  The burden of pleading offset and of proving facts necessary to support it are on the party making the assertion.”); Taylor v. Am. Fabritech, Inc., 132 S.W.3d 613, 626–28 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (claim for offset does not violate collateral source rule as against employer when plaintiff receives benefit from insurance purchased primarily to protect employer; claim for offset was supported by evidence showing that certain checks issued by employer’s insurance carrier were spent for plaintiff’s medical needs); Lege v. Jones, 919 S.W.2d 870, 873–74 (Tex. App.—Houston [14th Dist.] 1996, no writ) (subrogee had burden to prove the worker’s compensation benefits it paid to the claimant in order to recover them from tortfeasors).  Michelsen failed to meet this burden.[2] 

Michelsen made only one statement regarding proof of the alleged payment of benefits in his motion to modify the final judgment: “During trial [Jones] testified his surgery and income were ultimately paid by his worker’s compensation carrier.”  For two reasons, there is less to this statement than meets the eye. 

First, Jones’s testimony regarding worker’s compensation benefits was developed as an offer of proof and was not admitted at trial; Michelsen does not argue on appeal that it should have been admitted.  Second, Jones testified only that (1) he “believed” that Harris County paid medical bills from one of several treating physicians, but he did not identify an amount; and (2) his “time off” after his surgery was “filed under worker’s comp,” but he couldn’t remember if Harris County paid for his lost income.  Based on this testimony alone, the trial court did not abuse its discretion in denying Michelsen’s motion.[3]  See Wagner, 229 S.W.3d at 879; Ferguson, 860 S.W.2d at 126–27.  

We overrule Michelsen’s first issue. 

B.        One Satisfaction Rule

Michelsen argues in his second issue that the trial court should have reduced or eliminated Jones’s damages award pursuant to the one satisfaction rule.  A plaintiff is entitled to only one recovery for the same loss.  See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex. 2006); Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000).  The one satisfaction rule “applies when multiple defendants commit the same act” or “technically different acts that result in a single injury.”  Crown Life, 22 S.W.3d at 390.  This rule is not applicable here because Michelsen and Harris County are not joint tortfeasors alleged to have both caused injury to Jones. 

We overrule Michelsen’s second issue.

II.        Pre-Judgment Interest

Michelsen argues in his third issue that the trial court should have granted his motion to modify the final judgment because the judgment “does not contain the dates upon which the pre-judgment interest is to be calculated” and “award[s] prejudgment interest without consideration of the tolling for settlement offers.”

 Michelsen’s complaint on appeal is based on his assertion that he offered Jones a settlement on October 8, 2004, and that this open-ended settlement offer tolled the accrual date for pre-judgment interest on the amount of the offer under section 304.105(b) of the Texas Finance Code.  See Tex. Fin. Code Ann. § 304.105(b) (Vernon 2006).  Michelsen does not cite any evidence in the record that proves the existence of such a settlement offer.  See Quality Beverage, Inc. v. Medina, 858 S.W.2d 8, 11 (Tex. App.—Houston [1st Dist.] 1993, no writ) (defendant failed to provide competent evidence to establish that a settlement agreement tolled accrual of pre-judgment interest because “[t]here are no stipulations or affidavits in the record, and there was no postjudgment hearing to adduce evidence on the proper amount of prejudgment interest”).[4]  The trial court did not abuse its discretion in denying Michelsen’s motion.  See Wagner, 229 S.W.3d at 879; Ferguson, 860 S.W.2d at 126–27.

We overrule Michelsen’s third issue.

CONCLUSION

Having overruled all of Michelsen’s issues on appeal, we affirm the judgment of the trial court.

                                                                        /s/        William J. Boyce

                                                                                    Justice

Panel consists of Chief Justice Hedges and Justices Seymore and Boyce.

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[1] Harris County’s petition in intervention does not appear in the record on appeal.

[2] Michelsen argues that placing the settlement release into the record satisfied his burden of proof to show that he, as a “nonsettling party,” has a right to a settlement credit.  See Ellender, 968 S.W.2d at 927.  He contends that the burden then shifted to Jones to “prove the medical expenses and indemnity payments were not provided” by Harris County.  See Utts, 81 S.W.3d at 829–30.  Because Michelsen bases this argument on the same inapplicable case law, we reject Michelsen’s argument that the burden of proof shifted to Jones to disprove the payment of benefits by Harris County.

[3] Michelsen claims for the first time on appeal that “[t]he workers [sic] compensation records . . . clearly show the surgery and lost income was [sic] resubmitted to the TWCC.”  Michelsen cites to more than 700 pages of worker’s compensation records in the record as support for this contention.  We have no duty to search a voluminous record without more specific guidance from appellant to determine whether an assertion of reversible error is valid.  See Casteel-Diebolt v. Diebolt, 912 S.W.2d 302, 305 (Tex. App.—Houston [14th Dist.] 1995, no writ); see also Tex. R. App. P. 38.1(i) (“The brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record.”).      

[4] Quality Beverage nonetheless sustained the defendant’s issue regarding tolled accrual of pre-judgment interest because the defendant’s statement in its brief regarding the settlement offer “was uncontroverted by plaintiff in her brief and was confirmed in oral argument,” and the trial court acknowledged tolling of pre-judgment interest.  See Quality Beverage, 858 S.W.2d at 11 (“Rule 74(f) of the Texas Rules of Appellate Procedure provides that ‘[a]ny statement made by appellant in his original brief as to the facts or the record may be accepted by the court as correct unless challenged by the opposing party.’”); see also Tex. R. App. P. 38.1(g) (current version of former Rule 74(f); “In a civil case, the court will accept as true the facts stated unless another party contradicts them.”).  In doing so, the court noted: “We do not intend to expand the limits of the evidentiary rules, nor do we imply that such rules be disregarded. . . .  This case, however, presents an unusual fact situation in which no party denies the factual basis on which prejudgment interest should be tolled.  We do not suggest that rule 74(f) be applied in any other than an extremely cautious manner and on exceptionally rare occasions.”  Quality Beverage, 858 S.W.2d at 11–12.  We do not believe such an “exceptionally rare occasion” exists to do the same here.  See id.