Am. Zurich Ins. Co. v. Samudio

Decision Date25 August 2016
Docket NumberNO. 01-15-00478-CV,01-15-00478-CV
CourtTexas Court of Appeals

On Appeal from the 127th District Court Harris County, Texas

Trial Court Case No. 2006-18753


In this worker's compensation suit, appellant, American Zurich Insurance Company, appeals a summary judgment that found in favor of appellee, Daniel Samudio. In five issues on appeal, Zurich argues that (1) the trial court failed to comply with the judgment and mandate of the Texas Supreme Court; (2) the trial court's judgment is inconsistent with and beyond the scope to give full effect to the Texas Supreme Court's judgment and mandate; (3) the trial court erred in implicitly finding that there had been a substantial change of condition or in placing the burden of proof on Zurich to negate the existence of a substantial change of condition; (4) the trial court erred in implicitly finding that the remedy of remand was not available in this case; and (5) the trial court erred in awarding fee-shifted attorneys' fees.

We reverse and remand.


In October 2001, Samudio, an employee of HC Beck, Ltd., suffered a compensable injury when he fell from a ladder. He had four surgeries, including a spinal fusion and a laminectomy. Samudio made a worker's compensation claim for impairment benefits, and the Texas Department of Insurance Division of Workers' Compensation ("Division") appointed Dr. Machado as the designated doctor who would evaluate Samudio and assign an impairment rating that would determine the length and amount of impairment benefits paid. In a letter dated May 11, 2004, Dr. Machado reported to the Division that Samudio had an impairment rating of 20% based on the Guides to the Evaluation of Permanent Impairment, published by the American Medical Association ("Guides"). Dr. Machado's letter included a report, which stated, "According to the TWCCAdvisory 2003-10, a multilevel fusion meets the criteria for [diagnosis-related estimate (DRE)] Category IV of the lumbar spine. I am therefore awarding him a 20% whole person impairment."

After Zurich's expert, Dr. Obermiller, disputed Dr. Machado's impairment rating,1 the Division asked Dr. Machado for clarification on "segmental instability" and whether Samudio needed to be re-examined. In response, Dr. Machado referenced the Division's Advisories 2003-10 and 2003-10b in that they "both state that when examining an injured worker who has had spinal surgery, the rating is to be determined by preoperative x-ray tests for motion segment integrity. If those x-rays are not available, the type of surgery can be used to rate the individual.2 In this case, the preoperative films do not appear to be motion studies; therefore, I believe I was correct in using the type of surgery to determine the impairment rating."

Samudio and Zurich proceeded to a benefit review conference but were unable to resolve the impairment rating, among other issues. The parties then proceeded to a contested case hearing before the Division on October 19, 2005. Inits Decision and Order, the Hearing Officer stated that Dr. Machado, "initially certified that Claimant was at maximum medical improvement (MMI) on October 21, 2003 with 20% impairment pursuant to the [Guides]." The Hearing Officer clarified that "Dr. Machado placed Claimant in DRE Category IV for multilevel fusion pursuant to TWCC Advisory 2003-10 and 2003-10b." The Hearing Officer further stated, "[Dr. Machado] explained in a December 27, 2004 letter that there were no pre-operative x-rays for motion segment integrity and he noted that a March 20, 2002 x-ray showed a 50% compression deformity of the L-1 vertebral body and 30% compression deformity of the L-2. Dr. Machado declined to change the impairment rating in response to letters of clarification." The Hearing Officer concluded that Samudio had a 20% impairment rating.

Zurich appealed the Hearing Officer's decision to the Division's appeals panel and was notified in February 2006 that the Hearing Officer's decision was final. In March 2006, Zurich filed suit for judicial review of the Division's decision to the trial court. Zurich argued that Dr. Machado's 20% impairment rating was invalid because it was derived from the Division's Advisories 2003-10 and 2003-10b and not the Guides. Zurich further argued that the proceedings should be abated until the Austin Court of Appeals issued an opinion in Texas Department of Insurance Workers Compensation Division v. Lumbermens MutualCasualty Company, that the 20% impairment rating should be set aside, and that Samudio's impairment rating should be 10%.

After the Austin Court of Appeals issued the opinion in Lumbermens, which held that the Advisories were inconsistent with the Guides and thus invalid,3 Samudio sought dismissal in the trial court of Zurich's suit based on lack of jurisdiction. Samudio argued that "Zurich's claims raised no justiciable controversy because (i) the Texas Labor Code required a court to adopt one of the impairment ratings that the parties had presented to the Division and (ii) the only rating that any party had ever presented to the Division was Dr. Machado's impairment rating." The trial court granted Samudio's motion to dismiss for want of jurisdiction and granted attorneys' fees to Samudio pursuant to section 408.221 of the Labor Code.4

Zurich appealed the trial court's order granting Samudio's plea to the jurisdiction. This Court affirmed, holding that because Zurich requested relief that the trial court had no jurisdiction to grant, such as allowing "the fact finder to craft a new impairment rating," and that the trial court did not have jurisdiction to remand the case to the Division, the trial court properly granted Samudio's plea tothe jurisdiction. See American Zurich Ins. Co. v. Samudio, 317 S.W.3d 336, 348-49 (Tex. App.—Houston [1st Dist.] 2010, pet. granted), rev'd, American Zurich Ins. Co. v. Samudio, 370 S.W.3d 363, 368 (Tex. 2012).

The Texas Supreme Court disagreed, holding that section 410.3015 is not a jurisdictional limit and that the "trial court may remand to the Division to allow it to determine a valid impairment rating if the court concludes that no valid impairment rating was presented to the agency in the underlying contested case." American Zurich, 370 S.W.3d at 368. The supreme court stated that the trial court is "deciding a purely legal question: whether the proffered rating was made in accordance with statutory requirements." Id. It concluded that, "If the trial court determines that no rating made in conformance with the Guides was presented to the agency, it should remand to the Division for a new impairment determination." Id. at 369.

After remand to the trial court, on December 12, 2013, Zurich filed an amended traditional motion for summary judgment asserting that the evidence presented to the Division conclusively established that Dr. Machado assigned Samudio a 20% impairment rating based on the Division's Advisories 2003-10 and that Dr. Machado's impairment rating was "the only basis for the Hearing Officer'sdecision and order finding that Mr. Samudio had a 20% impairment rating." Zurich explained that Lumbermens held that Advisories 2003-10 and 2003-10b were invalid, and therefore, "Dr. Machado incorrectly calculated the defendant's impairment rating because he relied on an invalid and illegal Division advisory." See 212 S.W.3d at 875-76 (holding that Advisories were invalid from issuance). Zurich asserted that remand was the appropriate remedy so that "Mr. Samudio [would] receive a valid impairment rating calculated under the appropriate version of the Guides."

On January 9, 2014, Samudio's counsel filed a suggestion of death, stating that Samudio died on or about August 7, 2013, and noted that "Defendant believes that the proper Defendant is now the Estate of Daniel Samudio."6 In response, Zurich filed an amended petition naming Keith Morris, administrator of the Estate of Daniel Samudio, deceased, as defendant. On May 7, 2014, Keith Morris, as Administrator of the Estate of Daniel Samudio, Deceased, filed his original answer.

On May 22, 2014, Samudio filed an amended traditional and no-evidence motion for summary judgment, contending that the evidence demonstrated that "Samudio had a compression fracture greater than 50%, which entitled him to a20% impairment rating under the AMA Guides."7 Samudio reached this conclusion by relying on an affidavit from Dr. Jose Rodriguez, who had treated and performed multiple surgeries on Samudio. Samudio asserted that "Because it is . . . Zurich's burden to establish Mr. Samudio's condition and impairment rating, and they cannot, Mr. Samudio is entitled to summary judgment."

Zurich responded to Samudio's amended motion for summary judgment, stating that "[n]either party contends in their cross-motions for summary judgment that Dr. Machado's certification of MMI and impairment rating is valid." Zurich further argued that Dr. Rodriguez's evidence of impairment was invalid and inadmissible because it was not presented to the Division.

Without stating its reasons, the trial court granted Samudio's amended motion for summary judgment. After a hearing on whether Samudio was entitled to attorneys' fees, the trial court signed a final judgment on February 27, 2015, awarding attorneys' fees through trial and conditional appellate attorneys' fees. Zurich filed a "Motion to Modify the Judgment, Enter an Alternative Judgment, or for New Trial," arguing that the trial court exceeded the scope of the Supreme Court's order on remand by "refusing to conclude that no impairment rating madein conformance with the AMA Guides was presented to the agency" and that the trial court erred in "awarding fee-shifted attorney's fees because the fees reflected in this court's order are not supported by factually sufficient evidence." The appellate record does not contain an order on Zurich's...

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