Brown v. Aztec Rig Equipment, Inc.

• Decision Date: 18 April 1996
• Docket Number: No. 14-95-00731-CV,14-95-00731-CV
• Citation: 921 S.W.2d 835
• Parties: William BROWN, Jr. and Mary Ella Brown, Appellants, v. AZTEC RIG EQUIPMENT, INC. and Administaff, Inc., Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 835

921 S.W.2d 835

William BROWN, Jr. and Mary Ella Brown, Appellants, v. AZTEC RIG EQUIPMENT, INC. and Administaff, Inc., Appellees.

No. 14-95-00731-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

April 18, 1996.

Rehearing Overruled May 23, 1996.

Don M. Barnett, Houston, for appellants.

John H. Spurgin, Olive Penelope Hobbs, Austin, for appellees.

Before LEE, HUDSON and EDELMAN, JJ.

OPINION

LEE, Justice.

This is an appeal from a summary judgment in a workers' compensation, third-party suit. Appellants William Brown and his wife, Mary, filed a negligence suit against appellees Aztec Rig Equipment, Inc. (Aztec) and Administaff, Inc. (Administaff) for alleged personal injuries sustained by Mr. Brown on Aztec's premises. ¹ Aztec and Administaff moved for summary judgment on several grounds, including that the Browns' suit was barred by the exclusive remedy provision of the Texas Workers' Compensation Act ("the Act"). ² The trial court entered a judgment granting summary judgment for Aztec and Administaff on this ground. The Browns appeal from the court's judgment and raise twenty-four points of error attacking each of the grounds asserted in the amended motion for summary judgment filed by Aztec and Administaff. Because we find the Browns' suit is barred by the exclusive remedy provision of the Act, we affirm the court's judgment.

The following facts are established by the uncontroverted summary judgment proof. Administaff is in the business of staff leasing. It performs personnel management functions for their clients. Through Client Service Agreements with small businesses, Administaff employs the existing work force of its clients and leases them back to carry out the client's business. Aztec is in the business of repairing and refurbishing oil and gas equipment. Through a series of one-year Client Service Agreements, Aztec has been Administaff's client since 1988. Under those agreements, Administaff agreed to lease employees to Aztec to carry out Aztec's business. In particular, Aztec's President, Glenn Taylor, was designated as Administaff's on-site supervisor for personnel matters, but remained responsible for overseeing Aztec's business. Administaff also agreed to "furnish and keep in full force and effect at all times during the term of this Agreement workers' compensation insurance covering all Administaff employees furnished to Client pursuant to the terms of this Agreement." The agreements further provide that Administaff was the employer for some purposes. Aztec was the employer for some purposes, and both Administaff and Aztec were co-employers for other purposes. For example, Aztec was required to comply with OSHA regulations. Administaff, on the other hand, was required to comply with the applicable workers' compensation laws, "including but not limited to: (i) procuring workers' compensation insurance; (ii) completing and filing all required reports; and (iii) managing claims." However, the agreements state specifically that both "Administaff and Client will be considered co-employers (dual or joint employers) of those persons furnished to Client by Administaff" for purposes of "employer liability under workers' compensation laws." In Exhibit A, which was attached to the 1991 and 1992 agreements, Mr. Brown is listed as one of "those persons furnished to Client by Administaff."

On November 5, 1990, and March 14, 1991, Mr. Brown signed identical employment agreements with Administaff. Under the agreements, Mr. Brown was assigned to work for Aztec, Administaff's client company. Mr. Brown also agreed that "for the purpose of workers' compensation coverage, he is an employee of both Administaff and Client Company." The agreements state that "in the event of any injury, Employee agrees that his sole remedy lies in coverage under Administaff's workers' compensation policy under the theory that Administaff and Client Company are co-employers." On January 17, 1992, and April 15, 1993, Mr. Brown was allegedly injured on Aztec's premises. At the time, Mr. Brown was performing certain activities for Aztec's business under the direction of supervisors employed by Administaff, but leased to Aztec to carry out Aztec's business. As he had done for three other work-related injuries, Mr. Brown sought workers' compensation benefits under Administaff's policy in effect at the time.

At the contested case hearing held in September 1993, a hearing examiner found Mr. Brown was not entitled to benefits for either alleged injury. See TEX.LAB.CODE ANN., 410.151-410.169. Mr. Brown appealed the examiner's ruling. See id. 410.201-410.208. During the pendency of that appeal, the Browns' filed this suit. In January 1994, the appeals panel reversed the hearing officer's decision regarding the alleged injury on January 17, 1992, and remanded the case for further consideration of notice issues. The panel affirmed the hearing officer's decision regarding the alleged injury on April 15, 1993. Specifically, the panel found the evidence was sufficient to support the hearing officer's decision that Mr. Brown did not suffer a compensable injury. See id. 401.011(10). Mr. Brown did not seek judicial review of this part of the appeals panel decision. See id. 410.251-410.308.

In points of error one through twenty-one, the Browns contend the trial court erred in granting summary judgment based on TEX.LAB.CODE ANN. 408.001, the exclusive remedy provision of the Act.

Section 408.001(a) states:

Recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by a covered employee.

As we noted earlier, Aztec and Administaff moved for summary judgment on several grounds. However, the trial court granted summary judgment in favor of Aztec and Administaff solely on the ground that the Browns' claims were barred by section 408.001. This is specified in the court's judgment. In points of error twenty-two through twenty-four, the Browns attack other grounds asserted by Aztec and Administaff in their amended motion for summary judgment. ³ We need not address these points of error because the summary judgment must stand or fall on the ground specified in the court's judgment. Where the trial court's order explicitly specifies the ground relied on for the summary judgment ruling, the summary judgment can only be affirmed if the theory relied on by the trial court is meritorious, otherwise the case must be remanded. State Farm Fire & Casualty Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993) (plurality opinion).

The standard of review for summary judgments is well-established. A movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). In deciding whether there is a disputed material fact issue precluding summary judgment, proof favorable to the non-movant is taken as true, the court indulging every reasonable inference and resolving any doubts in favor of the non-movant. Nixon 690 S.W.2d at 548-49; Montgomery, 669 S.W.2d at 310. In other words, the issue on appeal is not whether the non-movant raised a material issue of fact precluding summary judgment; rather, the issue is whether the movant proved it was entitled to judgment as a matter of law. See TEX.R.CIV.P. 166a(c); Gibbs v. General Motors Corp., 450 S.W.2d 827, 828-29 (Tex.1970). If the appellate court finds the movant has not met its burden, it must reverse and remand the case for further proceedings. Gibbs, 450 S.W.2d at 828-29. To prevail on summary judgment, a defendant, as the movant, must establish as a matter of law all the elements of an affirmative defense or that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff's cause of action. Montgomery, 669 S.W.2d at 310-11; Gibbs, 450 S.W.2d at 828.

As they did in their amended motion for summary judgment and supporting brief, Aztec and Administaff contend the exclusive remedy provision bars the Browns' suit. They assert they are co-employers of Mr. Brown and as such, can both claim immunity under section 408.001 because Mr. Brown is covered by Administaff's workers' compensation policy. Alternatively, they assert the Browns failed to state a valid, third-party cause of action against the non-employer. Specifically, they contend that if Mr. Brown was the "borrowed servant" of Aztec then Aztec is entitled to employer immunity under section 408.001 and Administaff did not exercise the requisite degree of control over Mr. Brown's work activities to give rise to third-party liability. Conversely, they contend that if Mr. Brown was employed by Administaff then Administaff is entitled to employer immunity under section 408.001 and Aztec did not exercise the requisite degree of control over Mr. Brown's work activities to give rise to liability.

As they did below, the Browns essentially take two positions. First, they contend Aztec is not entitled to employer immunity under section 408.001 because it was not a "subscriber." They point out that Aztec does not appear as a named insured on Administaff's workers' compensation policies and Aztec failed to comply with the notice provisions of the Act. Second, they contend that Aztec and Administaff cannot as a matter of law be co-employers and that a fact issue exists regarding who had the right of control over the manner and details of Mr. Brown's work. The Browns contend that if Administaff had the right of control, then Mr. Brown was not Aztec's borrowed servant and Aztec was subject to third-party liability on a premises liability theory. See TEX.LAB.CODE ANN. 417.001-417.004. Alternatively, they contend...