Beyer v. Employees Retirement System of Texas

Citation808 S.W.2d 622
Decision Date17 April 1991
Docket NumberNo. 3-90-168-CV,3-90-168-CV
CourtCourt of Appeals of Texas
PartiesEileen S. BEYER, Appellant, v. EMPLOYEES RETIREMENT SYSTEM OF TEXAS, Group Life & Health Insurance Co., Alan Keith Beyer, Donald Lynn Beyer and Randy Ray Beyer, Appellees.

W. Hugh Harrell, Lubbock, for appellant.

Dan Morales, Atty. Gen., Anne E. Swenson, Asst. Atty. Gen., Austin, Elata Ely, Lubbock, Michael S. Hull, Brown Maroney & Oaks Hartline, Austin, for appellees.

Before POWERS, ABOUSSIE and KIDD, JJ.

POWERS, Justice.

Eileen S. Beyer appeals from a final judgment of the district court in her suit against the Employees Retirement System of Texas and others. 1 We will affirm the judgment.

THE CONTROVERSY

The Texas Employees Uniform Group Insurance Benefits Act, Tex.Ins.Code Ann. art. 3.50-2 (1981 & Supp.1991), established a plan for the purchase of group life, accident The present controversy centers around a group life-insurance policy written under the Act. The policy, written evidently by Group Life and Health Insurance Company, insured the life of Wilburn C. Beyer, a State employee.

and health insurance for State employees. Section 4 of the Act vests in a "trustee" the sole power to administer and implement the Act. The "trustee" is the State Board of Trustees of the Employees Retirement System of the State of Texas, a public body consisting of three appointed members and three members elected by the members of the State retirement system. Tex.Ins.Code, supra, art. 3.50-2 § 3(a)(11).

In 1975, Beyer divorced his wife, Alice Maurine Beyer, with whom he had three sons, Alan Keith Beyer, Donald Lynn Beyer, and Randy Ray Beyer. The divorce decree required Wilburn to designate his sons as beneficiaries under the group life-insurance policy, apparently as one element of a property-settlement agreement incident to the divorce.

In June of 1984, Wilburn married Eileen. In April 1984, he had begun receiving treatment for a malignant brain tumor. On November 27, 1984, he executed a written instrument designating Eileen as beneficiary of the group life insurance, and on November 30, 1984, following surgery, he "assumed disability retirement status." He died March 6, 1986.

Wilburn's three sons filed in the Board a claim to the $70,000 insurance proceeds. They based their claims on the common-law theories of constructive trust and breach of contract, resulting from the 1975 divorce decree and property-settlement agreement, and Wilburn's alleged incompetence when he executed the 1984 written instrument naming Eileen beneficiary of the insurance proceeds.

Eileen filed in the Board a competing claim to the $70,000 insurance proceeds, based, of course, upon Wilburn's 1984 designation of beneficiary. She claimed, in addition, a legal right to recover interest, attorney's fees, and a 12% penalty for any delay in payment of the $70,000.

When the controversy came before the Board, it amounted to a contested case governed by the provisions of the Texas Administrative Procedure and Texas Register Act (APTRA), Tex.Rev.Civ.Stat.Ann. art. 6252-13a, §§ 13-18 (Supp.1991). After hearing, the Board ordered that Eileen recover the $70,000 insurance proceeds. The Board rejected, however, Eileen's claim for interest, attorney's fees, and 12% additional damages, ruling that it had "no authority or jurisdiction to award" them.

THE DISTRICT-COURT PROCEEDING

Eileen sued the retirement system in district court, naming as additional defendants Group Life and Health Insurance Company and Wilburn's three sons. Her petition declared that she "is appealing [sic] [the] administrative decision and award of the Board," but the balance of her pleading, including her prayer, reveals that she assailed only the Board's refusal to award her additional sums for interest, attorney's fees, and 12% additional damages. Concerning these additional sums, she prayed alternatively that the court: (1) award her judgment for such sums against all the defendants jointly and severally; (2) remand the controversy to the Board with an instruction that the Board assess and award her the additional sums; or (3) declare that the additional sums are not recoverable in an administrative proceeding before the Board, but would be recoverable in an independent original proceeding "before a court of law."

The district-court judgment recites that the cause came on for hearing, and that "the administrative record," that is to say, the record of the proceeding before the Board, "was received into evidence." See APTRA § 19(d)(3). The decretal portion of the judgment recites that: (1) "the appeal [sic] by Eileen S. Beyer is denied and she is to recover nothing [sic]" from the defendants; and (2) the Board's final order is affirmed. 2

The language of the judgment indicates that the only claim tried by the district court was Eileen's suit for judicial review of the Board's final order, wherein she contended the court should have reversed the order because it failed to award her the additional sums. Nothing in the record suggests there was a trial of Eileen's original actions in district court seeking either an original award of the additional sums or a declaratory judgment that she was entitled to sue for them in an independent cause of action, perhaps in another district court in another suit. Consequently, it appears that Eileen abandoned her original actions in district court in favor of her suit for judicial review of the Board's final order under APTRA § 19.

In her appeal, Eileen expressly asserts only two points of error. The first pertains to her substantive claim for attorney's fees, 12% additional damages, and interest. Curiously, she implies that the Board may have lacked jurisdiction to adjudicate the competing claims to the $70,000. We believe that issue foreclosed, however, by the decision in Employees Retirement System of Texas v. Blount, 709 S.W.2d 646 (Tex.1986). Whatever the anomalies of the opinion in that case, we are bound by its holding that the Board has such jurisdiction under the Act. See Cofer, Judicial Review of Agency Law Decisions on Scope of Agency Authority, 42 Baylor L.Rev. 255, 279-81 (1990). Eileen complains basically, in her first point of error, that the Board erred in failing to award her the additional sums.

In her second point of error, Eileen contends we must reverse the judgment below because the district court erroneously failed to file findings of fact and conclusions of law as required by Tex.R.Civ.P.Ann. 296 (Supp.1991).

DISCUSSION AND HOLDINGS

Eileen's first point of error depends upon a premise that she possessed a legal right to interest, attorney's fees, and 12% additional damages. In her brief in this Court, as in her pleading in the district court, Eileen obscures the legal basis upon which she claimed these additional sums. We shall discuss the matter as best we can, given that obscurity.

The Board's authority to adjudicate the competing claims to the $70,000 insurance proceeds derives from § 4B of the Act. That statute provides as follows: 3

Adjudication of Claims. (a) The executive director of the Employees Retirement System of Texas has exclusive authority to determine all questions relating to ... payment of claims arising from programs or coverages provided under authority of this Act ...

....

(c) A decision by the executive director under Subsection (a) of this section may be appealed only to the trustee. An appeal to the trustee is a contested case under the Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).

(d) On appeal [sic] of a decision made by the trustee under Subsection (c) of this section [sic], the standard [sic] of review is by substantial evidence.

This statute falls short of being a salutary example of the legislative drafter's art. We shall attempt to divine the legislative intention behind its provisions.

Subsection (a). We believe this subsection delegates to the executive director the authority to decide in the first instance "all questions relating to [the] payment of claims arising from programs or coverages provided under authority of this Act." The subsection characterizes the executive director's authority as "exclusive," but this characterization is immediately negated by subsections (c) and (d), which provide, respectively, for an administrative appeal to the "trustee" and for a suit for judicial review of the "trustee's" decision, as discussed below.

Subsection (c). In providing for an "appeal" to the "trustee," we believe the Legislature intended the trustee's authority to be co-extensive with that exercised initially by the executive director. Subsection (c) authorizes the trustee to decide anew any questions arising from coverages provided under the Act, as if there had been no intervening decision by the executive director. This must follow from the second sentence of subsection (c), which provides that the proceeding becomes a "contested case" when brought to the trustee. The reference to APTRA necessarily incorporates the definition of "contested case" in APTRA § 3(2) and the provisions of APTRA §§ 13-18 which establish trial-type procedures governing such "contested cases."

Subsection (d). By stating that the substantial-evidence rule applies "on appeal" from the Board's decision, subsection (d) authorizes, by necessary implication, a suit for judicial review in a district court. The implication is compelled because the expression "substantial evidence" would be meaningless otherwise.

The reference to "substantial evidence" carries other implications when considered in conjunction with subsection (c), requiring that the Board's decision be made under the contested-case provisions of APTRA. The first additional implication is that any such suit for judicial review must be prosecuted in a district court of Travis County, as provided in APTRA § 19(b)(1). The second implication is that the...

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