Texas Mutual Insurance Co. v. Texas Department of Insurance

214 S.W.3d 613, 2006 Tex. App. LEXIS 10698, 2006 WL 3679997
CourtCourt of Appeals of Texas
DecidedDecember 15, 2006
Docket03-05-00776-CV
StatusPublished
Cited by27 cases

This text of 214 S.W.3d 613 (Texas Mutual Insurance Co. v. Texas Department of Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Mutual Insurance Co. v. Texas Department of Insurance, 214 S.W.3d 613, 2006 Tex. App. LEXIS 10698, 2006 WL 3679997 (Tex. Ct. App. 2006).

Opinion

OPINION

BOB PEMBERTON, Justice.

This is an interlocutory appeal from an order granting a plea to the jurisdiction in an employers liability insurance coverage case. Our principal issue concerns whether, as the district court concluded, the Texas Department of Insurance, Division of Workers’ Compensation (“the Division”) 1 has exclusive jurisdiction over a dispute concerning the coverage period under an employers liability insurance policy. We also consider whether the district court erred in holding that a challenge to a Division rule by appellant Texas Mutual Insurance Company (“Texas Mutual”) was not ripe. We will reverse and remand.

*615 BACKGROUND

In 2003, Texas Mutual issued a Workers’ Compensation and Employers Liability Insurance Policy to AJ Commercial Services, Inc. (“AJ Commercial”). The policy is a standard form promulgated by the Texas Department of Insurance (“TDI”). See Tex. Ins.Code Ann. art. 5.57 (West 1981). The standard form provides two types of coverage contained in different parts of the policy. The first part is entitled ‘Workers’ Compensation Insurance” and describes the carrier’s obligation to pay, on behalf of the insured employer, “all benefits required of [the employer] by the workers compensation law.” Part two of the policy is entitled “Employers Liability Insurance” and covers “all sums [the employer] legally must pay as damages because of bodily injury to your employees” to the extent described in the policy. Part two of the policy expressly does not cover “any obligation imposed by a workers compensation ... law.” The policy stated a single coverage period from February 19, 2003 to February 19, 2004, and a single annual premium amount.

It is undisputed that AJ Commercial did not pay to renew the policy before the policy period expired, although the parties dispute the circumstances and their significance. On July 28, 2004, an AJ Commercial employee, Jorge Andres Garcia, was killed while working for AJ Commercial. AJ Commercial notified Texas Mutual of Garcia’s death. Texas Mutual gave notice to Garcia’s family and the Division denying workers’ compensation benefits on the basis that AJ Commercial was not covered by a Texas Mutual policy on the date of injury.

The Garcia family has not pursued a claim for workers’ compensation death benefits. Instead, the family brought a wrongful death action against AJ Commercial in Karnes County district court alleging negligence, premises liability, and gross negligence. 2 AJ Commercial demanded a defense from Texas Mutual under the policy’s employers liability coverage. While maintaining that AJ Commercial’s policy had expired, Texas Mutual agreed to defend AJ Commercial under a reservation of rights.

AJ Commercial maintained that section 406.008 of the labor code and Division rule 110.1 operated to extend the policy beyond its stated period through the date of injury because it never received a notice of cancellation or non-renewal from Texas Mutual. Section 406.008 provides, in relevant part, that an insurance company’s failure to give notice of cancellation or non-renewal of “a policy of workers’ compensation insurance” to the policyholder and the Division extends the policy until the date such notice is given. Tex. Lab.Code Ann. § 406.008 (West 2006). Division rule 110.1 provides that the extended coverage date continues until ten days after the employer receives the notice of cancellation or non-renewal. 28 Tex. Admin. Code § 110.1(i) (2003).

Texas Mutual filed suit in Travis County district court seeking a declaration under the Uniform Declaratory Judgments Act that it had no obligation to defend or indemnify AJ Commercial in the wrongful death lawsuit because the employers liability policy it had issued AJ Commercial was no longer in effect. See Tex. Civ. Prac. & Rem.Code Ann. § 37.004 (West 1997). Asserting that it had twice faxed offers to renew the policy to AJ Commercial’s agent and received no response, Texas Mutual contended that section 406.008 applies only when a carrier declines to renew coverage, *616 not when an employer declines an offer to renew. Texas Mutual also sought a declaration under section 2001.038 of the government code that Division rule 110.1, by extending coverage until ten days after the insured receives notice of nonrenewal, conflicts with section 406.008, which extends coverage only until the carrier delivers the notice. See Tex. Gov’t Code Ann. § 2001.038 (West 2000). 3

The Division responded with a plea to the jurisdiction. It asserted exclusive jurisdiction to determine the dates of coverage under the policy and that Texas Mutual’s declaratory judgment claim regarding coverage should thus be dismissed for failure to exhaust administrative remedies. The Division also asserted that Texas Mutual’s section 2001.038 rule challenge was not ripe unless and until the Division has occasion to determine how rule 110.1 applies to the present facts. Following a hearing, the district court granted the Division’s plea to the jurisdiction and abated the case pending exhaustion of administrative remedies. It also found that Texas Mutual’s rule challenge was not ripe and should be abated pending the exhaustion of administrative remedies. 4 From this order, Texas Mutual timely perfected this interlocutory appeal. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(8) (West Supp.2006).

DISCUSSION

Texas Mutual brings two issues challenging the district court’s holdings that (1) the Division had exclusive jurisdiction to determine whether Texas Mutual’s employers liability coverage remained in effect through the time of injury and (2) Texas Mutual’s rule challenge was not ripe.

The Division’s jurisdiction

“Under the exclusive jurisdiction doctrine, the Legislature grants an administrative agency the sole authority to make the initial determination in a dispute.” Subaru of Am,., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex.2002). Thus, where an agency has exclusive jurisdiction, the courts have no subject matter jurisdiction, and a party can turn to the courts only after first exhausting all administrative remedies. In re Entergy Corp., 142 S.W.3d 316, 321-22 (Tex.2004); Subaru of Am., 84 S.W.3d at 221. Whether an agency has exclusive jurisdiction depends upon statutory interpretation, In re Entergy Corp., 142 S.W.3d at 322, and is a question of law we review de novo. Subaru, of Am., 84 S.W.3d at 222.

The Texas Workers’ Compensation Act provides that the “exclusive remedy of an employee covered by workers’ compensation insurance coverage” for a work-related injury is “recovery of workers’ compensation benefits” as provided under the Act. Tex. Lab.Code Ann.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In Re Fort Bend County v. the State of Texas
Court of Appeals of Texas, 2025
Vista Medical Center Hospital v. Texas Mutual Insurance Company
416 S.W.3d 11 (Court of Appeals of Texas, 2013)
AMS Construction Co. v. K.H.K. Scaffolding Houston, Inc.
357 S.W.3d 30 (Court of Appeals of Texas, 2011)
APOLLO ENTERPRISES, INC. v. ScripNet, Inc.
301 S.W.3d 848 (Court of Appeals of Texas, 2009)
Texas Logos, L.P. v. Brinkmeyer
254 S.W.3d 644 (Court of Appeals of Texas, 2008)
In Re American Casualty Co. of Reading, Pennsylvania
233 S.W.3d 925 (Court of Appeals of Texas, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
214 S.W.3d 613, 2006 Tex. App. LEXIS 10698, 2006 WL 3679997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-mutual-insurance-co-v-texas-department-of-insurance-texapp-2006.