Southwestern Bell Telephone Co., LP v. Mitchell

276 S.W.3d 443, 52 Tex. Sup. Ct. J. 202, 2008 Tex. LEXIS 1141, 2008 WL 5266380
CourtTexas Supreme Court
DecidedDecember 19, 2008
Docket05-0171
StatusPublished
Cited by54 cases

This text of 276 S.W.3d 443 (Southwestern Bell Telephone Co., LP v. Mitchell) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southwestern Bell Telephone Co., LP v. Mitchell, 276 S.W.3d 443, 52 Tex. Sup. Ct. J. 202, 2008 Tex. LEXIS 1141, 2008 WL 5266380 (Tex. 2008).

Opinions

Justice HECHT

delivered the opinion of the Court,

in which Justice WAINWRIGHT, Justice BRISTER, Justice JOHNSON, and Justice WILLETT joined.

In Continental Casualty Co. v. Downs, we construed section 409.021(a) of the Workers’ Compensation Act1 to preclude a carrier from contesting the compensability of an employee’s injury unless, within seven days of receiving notice of injury, it either began to pay benefits or gave written notice of its refusal to do so.2 For more than a decade, the Texas Workers’ Compensation Commission, the entity then charged with carrying out the Act,3 had consistently taken the position that a carrier had sixty days to contest compensability.4 Less than nine months after Downs was final, the Legislature amended section 409.021 to make clearer that a carrier who “fails to comply with Subsection (a) does not waive the ... right to contest the compensability of the injury”.5

Because the rale announced in Downs was in effect for only about a year, petitioner contends we should overrule that case as having been wrongly decided. We agree. We reverse the judgment of the court of appeals6 and remand the case to the trial court for further proceedings.

I

On August 14, 2000, Louise Mitchell, a clerk-typist for petitioner Southwestern Bell Telephone Company, was diagnosed with Legionnaire’s disease. Claiming to [445]*445have contracted the disease at work, Mitchell sent Bell a notice of injury, which Bell received on August 23. Mitchell died four days later, and her husband, respondent William Mitchell, claimed workers’ compensation death benefits. On October 5, 43 days after receiving notice of injury, Bell, a self-insured nonsubscriber, contested compensability in a filing with the Commission.

At the time, section 409.021(a) of the Texas Labor Code stated:

An insurance carrier shall initiate compensation ... promptly. Not later than the seventh day after the date on which an insurance carrier receives written notice of an injury, the insurance earner shall:
(1) begin the payment of benefits as required by this subtitle; or
(2) notify the commission and the employee in writing of its refusal to pay and advise the employee of:
(A) the right to request a benefit review conference; and
(B) the means to obtain additional information from the commission.7

Earlier in the year, on January 26, the court of appeals had issued its opinion in Downs holding that a carrier who failed to meet this seven-day deadline could not contest compensability. The Commission had always taken the position that failing to meet the deadline resulted only in a possible administrative penalty,8 not in a loss of the right to contest compensability.9 The Commission believed a carrier had sixty days to contest compensability, based on section 409.021(c), which stated:

(c) If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability. The initiation of payments by an insurance carrier does not affect the right of the insurance earner to continue to investigate or deny the compensability of an injury during the 60-day period.10

After the court of appeals’ Downs decision, the Commission adhered to its position, adopting rules in March that reflected its construction of the statute.11 On August 16, the court granted rehearing and issued [446]*446a substitute opinion reaching the same result,12 and twelve days later the Commission’s executive director issued the following advisory:

After consultation with the Office of the Attorney General ..., the Commission understands that the August 16th decision in the Dovms case should not be considered as precedent at least until it becomes final upon completion of the judicial process. In addition, the related Commission’s rules, such as those found at 28 Tex. Admin. Code §§ 124.2, 124.8, and 182.17, remain in effect.13

For the Mitchell claim, Downs’s new seven-day deadline fell two weeks after the court of appeals’ final opinion and two days after the Commission’s advisory against compliance. Bell did not meet that deadline but did file its contest of compensability within sixty days, as the Commission required. For more than two years, the administrative proceeding languished while Downs was appealed to this Court. We affirmed the court of appeals on June 6, 2002, but pending rehearing, the Commission remained adamant in its position. On June 17, it issued an advisory stating that “the 7 day ‘pay or dispute’ provision in the Dovms case is not final pending the motion for rehearing.”14 On July 31, a Commission appeals panel followed the Commission’s construction of the statute, holding that a carrier did not waive the right to contest compensability as long as it did so within sixty days of receiving notice of injury.15 We overruled the motion for rehearing in Downs on August 30 and issued the mandate September 9. On September 12, the Commission issued an advisory acknowledging that Downs was final and stating that “[a]ll previous Advisories issued by the Commission regarding this issue are superseded by this Advisory and the Supreme Court decision.”16

The Mitchell proceeding then resumed. A contested case hearing was held in March 2003, the focus of which was, according to the hearing officer, “where the bacteria [legionella pneumophilia] was contracted, that is, at work, or somewhere else.” Based on medical evidence that “the bacteria is everywhere in the environment and because no other co-workers, including those at high risk, contracted the disease”, the hearing officer concluded that Mitchell’s husband had failed to prove that Mitchell contracted her illness in the course and scope of employment, finding instead that “[t]he legionnaire’s disease that caused her death was an ordinary disease of life.” However, the hearing officer also rejected Bell’s argument that Dovms should not be applied retroactively and concluded that by failing to pay benefits or give notice of its refusal to do so within seven days of notice of Mitchell’s injury, Bell was precluded from contesting compensability. Consequently, the hearing officer awarded death benefits to Mitchell’s husband. Bell filed an administrative appeal.

[447]*447On May 28, 2008, about nine months after Downs was final, the Legislature amended section 409.021 to make clearer that the rule the Commission had long applied was the rule that the Legislature believed should be followed. The amendment added the following paragraph (a-1):

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Cite This Page — Counsel Stack

Bluebook (online)
276 S.W.3d 443, 52 Tex. Sup. Ct. J. 202, 2008 Tex. LEXIS 1141, 2008 WL 5266380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southwestern-bell-telephone-co-lp-v-mitchell-tex-2008.