Ankrom v. Dallas Cowboys Football Club, Ltd.

• Decision Date: 23 March 1995
• Docket Number: No. 05-93-01896-CV,05-93-01896-CV
• Citation: 900 S.W.2d 75
• Parties: Scott Randall ANKROM, Appellant, v. DALLAS COWBOYS FOOTBALL CLUB, LTD., Intervenor, Appellee.
• Court: Texas Court of Appeals

Page 75

900 S.W.2d 75

Scott Randall ANKROM, Appellant, v. DALLAS COWBOYS FOOTBALL CLUB, LTD., Intervenor, Appellee.

No. 05-93-01896-CV.

Court of Appeals of Texas,

Dallas.

March 23, 1995.

John E. Collins, Stephen Cormac Carlin, Weil Gotshal & Manges, Dallas, for appellant.

Darrell G. Anderson, Harvey G. Joseph, Godwin & Carlton, P.C., Dallas, for appellee.

Before THOMAS ¹, C.J., and OVARD and WHITTINGTON, JJ.

OPINION

THOMAS, Chief Justice.

This is a dispute between Scott Randall Ankrom and his former employer, the Dallas Cowboys Football Club, Ltd. (the Club). The dispositive issue is whether an employer is required to file a claim for credits or offsets with the Texas Worker's Compensation Commission (the Commission) before it may recover such sums in an appeal from a worker's compensation award. We conclude that it must. Because the Club did not file its claim for reimbursement with the Commission, we hold that the trial court lacked jurisdiction to enter an award in the Club's favor. Accordingly, we vacate the trial court's judgment and dismiss the Club's claims.

FACTUAL AND PROCEDURAL BACKGROUND

Ankrom was employed as a professional football player with the Club. He injured his left knee during a preseason exhibition game in 1989. The knee injury required three surgeries. Thereafter, Ankrom underwent extensive rehabilitation treatment. Ankrom was placed on and off injured reserve during the 1989 season. He did not play any regular season games during the 1990 season. Ankrom left professional football before the 1991 season began.

In August 1991, following his departure from the Club, Ankrom filed a worker's compensation claim with the Commission. ² In December 1992, the Commission issued a final award in Ankrom's favor. Gulf Insurance Company, the Club's worker's compensation carrier, ³ appealed the Commission's award to the district court. The Club intervened, claiming a contractual right to recover any benefits that were to be paid to Ankrom. Thereafter, Ankrom and Gulf settled the worker's compensation claim for $26,500. The settlement amount was paid into the registry of the court pending final determination of the Club's claims.

Ankrom and the Club entered into a written set of stipulated facts and proceeded to a trial before the court. Based upon the evidence presented and the stipulated facts, the trial court awarded the entire worker's compensation award to the Club and ordered Ankrom to pay attorneys' fees. The trial court filed findings of fact and conclusions of law. Ankrom appeals the trial court's judgment.

NECESSITY FOR THE CLUB TO EXHAUST ADMINISTRATIVE REMEDIES

In the first four points of error, Ankrom challenges the trial court's jurisdiction to enter an award in favor of the Club. Ankrom argues the trial court did not have jurisdiction to consider the claim because the Club failed to exhaust its administrative remedies under the worker's compensation act prior to seeking reimbursement in the district court.

The Club responds that its claims are in the nature of a breach of contract or declaratory judgment action, not a worker's compensation suit. Thus, the Club argues that it was not required to exhaust any administrative remedies prior to obtaining a recovery in court. The Club further asserts that it was not required, as an employer, to exhaust its administrative remedies prior to intervening in the trial court. The Club contends that, as a general rule, employers are not allowed to become involved in proceedings before the Commission. Therefore, the Club argues that its failure to participate in proceedings before the Commission did not deprive the trial court of jurisdiction.

1. Applicable Law

Article 8307, section 5 of the Texas Revised Civil Statutes requires all questions arising under the worker's compensation law to be first determined by the Industrial Accident Board (now the Commission) unless otherwise settled by agreement of the parties interested therein. ⁴ Based on this provision, Texas cases have long held that trial courts do not have original jurisdiction over claims and disputes arising out of on-the-job injuries. See Employers' Indem. Corp. v. Woods, 243 S.W. 1085, 1087 (Tex.Comm'n App.1922); Starnes v. Texas Employers' Ins. Ass'n, 549 S.W.2d 46, 47 (Tex.Civ.App.--Dallas 1977, writ ref'd n.r.e.). Thus, a party must pursue its administrative remedy first at the agency level, before seeking relief in the district court. See Johnson v. American Gen. Ins. Co., 464 S.W.2d 83, 84 (Tex.1971). A party's failure to obtain an administrative ruling on an issue arising under the worker's compensation statute prevents the party from later invoking the jurisdiction of the district court to resolve the issue. See Paradissis v. Royal Indem. Co., 496 S.W.2d 146, 150 (Tex.Civ.App.--Houston [14th Dist.] 1973), aff'd, 507 S.W.2d 526 (Tex.1974); Pacific Indem. Ins. Co. v. Liberty Mut. Ins. Co., 834 S.W.2d 91, 93 (Tex.App.--Austin 1992, no writ). The jurisdiction of the district court over worker's compensation suits is appellate in nature, even though the trial in such cases is de novo. Paradissis, 507 S.W.2d at 529 (quoting Industrial Accident Bd. v. Glenn, 144 Tex. 378, 190 S.W.2d 805, 807 (1945)).

The worker's compensation system is voluntary and elective. See Paradissis, 507 S.W.2d at 529. When the employee and employer elect to participate under the system, they voluntarily agree that their rights and remedies otherwise existing under the common law will not be operative, and that their respective rights shall be governed by the provisions of the worker's compensation law. Paradissis, 507 S.W.2d at 529. Any duties and liabilities that necessarily arise from the worker's compensation statute and the worker's compensation insurance contract made pursuant thereto must be addressed first by the Industrial Accident Board (or Commission) before relief may be sought in the district court. Paradissis, 507 S.W.2d at 529. ⁵

When the worker's compensation statute directs that action be taken in a certain way, it may be performed in no other manner. See Truck Ins. Exch. v. Seelbach, 161 Tex. 250, 339 S.W.2d 521, 523 (1960). The provisions of the statute with respect to the successive steps in the progress and maturity of a claim are mandatory, and the provisions of the statute must be complied with or an action is not maintainable in the courts. See Sanchez v. Aetna Casualty & Sur. Co., 543 S.W.2d 888, 889 (Tex.Civ.App.--San Antonio 1976, writ ref'd n.r.e.); Castillo v. Allied Ins. Co., 537 S.W.2d 486, 487 (Tex.Civ.App.--Amarillo 1976, writ ref'd n.r.e.).

Article 8309, section 4(b) provides a mechanism for employers to obtain credits or offsets for advance benefits payments made by the employer to an employee. ⁶ Section 4(b) states, in relevant part, that:

[i]n the event the [insurance carrier] does not initiate payments of compensation, the employer may for the purpose of this Section voluntarily initiate weekly payments as they accrue to the employee ... for a period not to exceed ten (10) weeks or until the settlement is approved or the award made by the Board, whichever occurs first. The employer shall notify the Board and association on forms supplied by the Board of the date of the initiation of such payments and the weekly amount thereof. At the time of any settlement, award or judgment for compensation, such payment previously made by the employer ... during [a time in] which the employee earned no wages from the employer, shall be construed as employer compensation under this law and such payments of employer compensation shall be paid by the association directly to the employer.

(Emphasis added.) ⁷ Thus, under this section, if an employer wants to obtain reimbursement for advance payments of worker's compensation benefits, the employer must notify the Commission of the amount of advance payments made.

2. Application of Law to Facts

It is undisputed that the Club did not file its claim for credits or offsets of advance payments with the Commission. Instead, the Club waited to assert its right of reimbursement until Ankrom's worker's compensation award was on appeal in the district court. We conclude that the Club's failure to pursue its right to a credit or offset before the Commission deprived the district court of jurisdiction to consider the Club's claim.

Our research reveals no Texas cases directly addressing whether an employer may pursue its claim for credits or offsets in the district court without first presenting that claim to the Commission. Nevertheless, we conclude that such a procedure is improper based on longstanding worker's compensation principles. As noted above, the provisions of the statute with respect to the successive steps in the progress and maturity of a claim are mandatory, and the statutory provisions must be complied with or an action is not maintainable in the courts of this State. See Sanchez, 543 S.W.2d at 889; Castillo, 537 S.W.2d at 487. Thus, when the worker's compensation statute provides that action be taken in a particular manner, it may be performed in no other way. See Seelbach, 339 S.W.2d at 523.

Here, the statute outlines a procedure for employers to obtain reimbursement for advance worker's compensation payments made to an employee. Under that procedure, an employer must notify the Commission of the date the advance payments were initiated and the weekly amounts thereof. ⁸ The provision indicates that, once this is done, any repayment of funds will be made by the association (i.e., the insurance company) directly to the employer at the time of the worker's compensation settlement or award. ⁹ Because the statute states that an employer shall notify the Commission of any claim for reimbursement, we conclude this "action [has to] be taken in a particular manner" and that such action may be performed "in no other way." See Seelbach, 339 S.W.2d at 523. The Club failed to comply with the procedures outlined in the statute...