Autry v. Dearman
Decision Date | 08 August 1996 |
Docket Number | No. 14-94-00661-CV,14-94-00661-CV |
Citation | 933 S.W.2d 182 |
Parties | Sandra A. AUTRY, as Receiver of Texas Employers' Insurance Association, Appellant, v. William T. DEARMAN, Individually and d/b/a William T. Dearman & Associates, Appellees. (14th Dist.) |
Court | Texas Court of Appeals |
Loren R. Smith, Houston, for appellant.
Henry P. Giessel, John B. Wallace, B. Todd Wright, Houston, for appellees.
Before MURPHY, C.J., and AMIDEI and ANDERSON, JJ.
This appeal concerns a workers' compensation carrier's subrogation rights to a third-party settlement pursuant to former article 8307 of the Revised Civil Statutes. After a work-related injury, Jesse Villegas ("Villegas") received compensation and medical benefits from Texas Employers' Insurance Association (now in receivership and referred to collectively with its receiver, Sandra A. Autry, as "TEIA"), which provided workers' compensation insurance for Villegas's employer. The attorney representing Villegas, appellees, William T. Dearman, Individually and d/b/a William T. Dearman & Associates ("Dearman"), obtained a settlement of a personal injury suit. After a judgment non obstante veredicto (JNOV) that TEIA take nothing in its suit against Dearman to enforce its subrogation rights to the third-party settlement, TEIA brings this appeal in twelve points of error. We affirm.
While working for a landscaping company in March 1987, Villegas was bitten by a dog owned by Yolanda Brown. He sustained injuries to his hand and also claimed he injured his back when he fell. Through September 1987, 1 TEIA paid Villegas a total of $7,478.32 in compensation and medical benefits for these injuries.
Dora Oliva, the attorney handling Villegas's compensation claim, referred the personal injury claim to Dearman, who filed suit in June 1988 against Brown for damages. Brown, through her insurance company, Republic Insurance Company ("Republic"), settled the suit for $7,500 in March 1989. Dearman retained $4,215.10 in attorney's fees and expenses from the settlement funds, out of which a $1,250 referral fee was paid to Oliva. Villegas received the balance of the settlement funds in the amount of $3,284.90. Villegas acknowledged receipt of the settlement funds on April 3, 1989, and the court entered an agreed judgment dismissing the cause on May 20, 1989.
TEIA contends that it did not discover that a third-party settlement had been reached until April 11, 1990 when its representative contacted the district clerk's office and was informed of the agreed judgment. TEIA then made demand on Dearman and Republic for satisfaction of its subrogation rights. Dearman never responded, but Republic settled with TEIA for $3,739.16, half of the total benefits paid. TEIA sued Dearman on March 2, 1992, claiming conversion breach of contract, fraud, and other causes of action. In his defense, Dearman denied he knew TEIA had paid compensation to Villegas. This contention was hotly disputed by TEIA at trial. In addition, Dearman asserted he was entitled to one-third of the recovery as attorney's fees pursuant to the workers' compensation statute. TEIA stipulated that Dearman was entitled to an offset in the amount paid by Republic.
The case was tried to a jury. The trial court refused to submit questions on fraud, constructive fraud, money had and received, unjust enrichment, or breach of contract. Instead, the trial court determined that conversion was the applicable cause of action. The jury answered four questions in favor of TEIA, finding that Dearman had knowledge of TEIA's subrogation rights on April 29, 1988, before he settled the third-party suit. The trial court disregarded the jury's answers, however, and granted Dearman's motion for judgment, which asserted, inter alia, that the two-year statute of limitations barred TEIA's conversion action brought three years after the third-party settlement. TEIA appeals from the take-nothing judgment, complaining that the trial court refused to submit all of its causes of action and erroneously found its claims barred by limitations.
When a claim for workers' compensation is made, the insurance carrier is subrogated to the rights of the injured employee and may enforce the liability of the person who caused the injury. 2 Guillot v. Hix, 838 S.W.2d 230, 231 (Tex.1992). TEIA's claim for subrogation is governed by the workers' compensation statute in effect in 1987, former article 8307 of the Revised Civil Statutes. Relevant portions of section 6a of article 8307 are as follows:
Recovery from third person; subrogation; attorney's fees. (a) If the injury for which compensation is payable under this law was caused under circumstances creating a legal liability in some person other than the subscriber to pay damages in respect thereof, the employee may proceed either at law against that person to recover damages or against the association for compensation under this law.... If compensation be claimed under this law by the injured employee or his legal beneficiaries, then the association shall be subrogated to the rights of the injured employee, and may enforce in the name of the injured employee or his legal beneficiaries the liability of said other person, and in case the recovery is for a sum greater than that paid or assumed by the association to the employee or his legal beneficiaries, then out of the sum so recovered the association shall reimburse itself and pay said costs and the excess shall be paid to the injured employee or his beneficiaries. However, when the claimant is represented by an attorney, and the association's interest is not actively represented by an attorney, the association shall pay such fee to the claimant's attorney not to exceed one-third (1/3) of said subrogation recovery or as may have been agreed upon between the claimant's attorney and the association or in the absence of such agreement the court shall allow a reasonable attorney's fee to the claimant's attorney for recovery of the association's interest which in no case shall exceed thirty-three and one-third percent (33 1/3%) payable out of the association's part of the recovery....
* * * * * *
(c) If at the conclusion of a third party action a workmen's compensation beneficiary is entitled to compensation, the net amount recovered by such beneficiary from the third party action shall be applied to reimburse the association for past benefits and medical expenses paid....
Act of May 17, 1985, 69th Leg., R.S., ch. 326, § 1, 1985 Tex. Gen. Laws 1387, repealed by Act of December 11, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(10), 1989 Tex. Gen. Laws 1, 114 (hereinafter referred to as article 8307). 3
Under the act, an injured employee who proceeds against a third-party tortfeasor is not precluded from claiming against the employer's compensation carrier. Watson v. Glens Falls Ins. Co., 505 S.W.2d 793, 795 (Tex.1974). The claimant is prevented from receiving a double recovery, however, because the carrier is entitled to reimbursement for the compensation paid. Fort Worth Lloyds v. Haygood, 151 Tex. 149, 246 S.W.2d 865, 869 (1952).
When a compensation carrier pays compensation to an injured employee, the carrier has a statutory right to reimbursement out of the "first money" recovered in a subsequent suit against a third-party tortfeasor. Watson, 505 S.W.2d at 795. The carrier is not required to intervene in the third party action to enforce its right to reimbursement. Home Indem. Co. v. Pate, 814 S.W.2d 497, 500-01 (Tex.App.--Houston [1st Dist.] 1991, writ denied); Travelers Ins. Co. v. Seidel, 705 S.W.2d 278, 281 (Tex.App.--San Antonio 1986, writ dism'd). When the carrier is not represented by an attorney in the third-party action, the claimant's attorney's fees and court costs are to be deducted from the third-party recovery before reimbursing the carrier. Insurance Co. of N. Am. v. Wright, 886 S.W.2d 337, 344 (Tex.App.--Houston [1st Dist.] 1994, writ denied); New York Underwriters Ins. Co. v. State Farm Mut. Auto. Ins. Co., 856 S.W.2d 194, 203 (Tex.App.--Dallas 1994, no writ); Bridges v. Texas A & M Univ. Sys., 790 S.W.2d 831, 833-34 (Tex.App.--Houston [14th Dist.] 1990, no writ). 4
In its first four points of error, TEIA attacks the trial court's refusal to submit questions on fraud, constructive fraud, money had and received, and unjust enrichment. In point of error six, TEIA complains that the court erred in refusing to submit its question on breach of contract. However, TEIA failed to support its sixth point of error with any legal authority. A point of error not supported by authority is waived. Trenholm v. Ratcliff, 646 S.W.2d 927, 934 (Tex.1983).
Rule 278 requires trial judges to submit requested questions to the jury if the pleadings and any evidence support them. Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex.1992); TEX.R. CIV. P. 278. If error in the charge is found, we then review the pleadings, evidence, and the entire charge to determine if the error is harmful. Island Recreational Dev. Corp. v. Republic of Texas Sav. Ass'n, 710 S.W.2d 551, 555 (Tex.1986). To reverse a judgment based on error in the charge, an appellant must establish that the error complained of amounted to such a denial of the its rights as was reasonably calculated to cause and probably did cause rendition of an improper judgment. TEX.R.APP. P. 81(b)(1). A judgment must be reversed when a party is denied proper submission of a valid theory of recovery or a vital defensive issue raised by the pleadings and evidence, if timely raised and properly requested as part of the charge. Exxon Corp. v. Perez, 842 S.W.2d 629, 631 (Tex.1992).
Under the facts of this case, we hold that TEIA's claim is one for conversion. Conversion is the wrongful exercise of dominion and control over another's property in denial of, or inconsistent with, his rights. Bandy v. First State Bank, Overton, 835 S.W.2d 609, 622 (Tex.1992). An action lies for...
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