Franks v. Sematech, Inc.
| Decision Date | 16 August 1995 |
| Docket Number | No. 03-94-00339-CV,03-94-00339-CV |
| Citation | 938 S.W.2d 462 |
| Parties | Charlie FRANKS and Industrial Indemnity Insurance Company, Appellants, v. SEMATECH, INC., f/d/b/a Semi Conductor Manufacturing Technology Initiative, and Burle Industries, Inc., Appellees. |
| Court | Texas Court of Appeals |
Paul E. Knisely, Spivey, Grigg, Kelly & Kinsely, Austin, for Charlie Franks.
J. Mark Holbrook, Davis & Wilkerson, P.C., Austin, for Industrial Indemnity Insurance Company.
Alysia Wightman, Vinson & Elkins, L.L.P., Austin, for Burle Industries, Inc.
Tim Poteet, Lea & Chamberlain, Austin, for Sematech, Inc.
Before CARROLL, C.J., and ABOUSSIE and B.A. SMITH, JJ.
This case arises under the Texas Workers' Compensation Act and involves an injured employee's third-party liability cause of action and an insurance carrier's derivative claim of subrogation. See Texas Workers' Compensation Act, Tex. Lab.Code Ann. § 417.001(b) (West 1995). Appellant Industrial Indemnity Insurance Company ("Industrial Indemnity") appeals from a summary judgment granted in favor of appellees Sematech, Inc. and Burle Industries, Inc. Additionally, appellant Charlie Franks appeals from the trial court's order dismissing his plea in intervention as barred by the two-year statute of limitations. We will affirm the trial court's order dismissing Franks's plea in intervention and will affirm the trial court's summary judgment.
On January 22, 1991, Franks was injured when a gate on Sematech's premises allegedly closed on him while he was acting within the course and scope of his employment. Daw Technologies, Franks's employer, had a workers' compensation policy with Industrial Indemnity to cover employees injured in the scope of their employment. Industrial Indemnity apparently paid workers' compensation benefits to Franks as a result of his injuries.
On January 13, 1993, Industrial Indemnity filed this action in its own name pursuant to a former third-party liability provision of the Workers' Compensation Act. 1 See Act of Mar. 28, 1917, 35th Leg., R.S., ch. 103, Part II, § 6a, 1917 Tex. Gen. Laws 269, 285, amended by Act of May 10, 1973, 63d Leg., R.S., ch. 88, § 10, 1973 Tex. Gen. Laws 187, 193 (Tex. Lab.Code Ann. § 417.001(b), since amended) (hereinafter "former art. 8307, § 6a"). Characterizing its suit as a "third-party subrogation lawsuit," Industrial Indemnity sought to enforce, under its subrogation rights, appellees' liability to Franks for a portion of the potential amount of damages recoverable by Franks against appellees--those damages equaling the compensation Franks received from Industrial Indemnity, at least $53,000, plus future sums expended on Franks as well as attorney's fees. Although the lawsuit was filed in Industrial Indemnity's name, the pleadings described negligence, strict products liability, and Deceptive Trade Practices Act ("DTPA") claims that Franks allegedly had against appellees. On January 27, 1994, Franks filed a plea in intervention specifically adopting the factual allegations in Industrial Indemnity's original petition and asserting a cause of action for negligence against appellees, seeking damages for his physical pain, mental suffering, and lifetime impairment On February 10, 1994, each appellee filed a motion to strike Franks's plea in intervention based on the expiration of the two-year statute of limitations. The trial court dismissed Franks's plea on that ground. Subsequently, each appellee filed a motion for summary judgment stating that Industrial Indemnity's subrogation claims were derivative of Franks's claims, and since Franks's claims were barred by the statute of limitations, Franks had no rights to which Industrial Indemnity could be subrogated. 2 The trial court granted appellees' motions for summary judgment on May 12, 1994. Franks appeals from the trial-court order dismissing his plea in intervention; Industrial Indemnity appeals from the summary judgment.
of both his ability to work and his physical activities in general.
By two points of error, Franks contends that the trial court erred in dismissing his plea in intervention. We review a trial court action in striking a petition in intervention under an abuse of discretion standard. Guaranty Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657-58 (Tex.1990); National Union Fire Ins. Co. v. Pennzoil Co., 866 S.W.2d 248, 251 (Tex.App.--Corpus Christi 1993, no writ). A trial court may strike a plea in intervention "for sufficient cause on the motion of any party." Tex.R. Civ. P. 60. In the instant cause, appellees filed motions requesting the trial court to strike Franks's plea in intervention because it was barred by the statute of limitations; the trial court dismissed Franks's plea on that express ground. Franks's first point of error asserts that the trial court erroneously dismissed his plea because the causes of action it sets forth relate back to Industrial Indemnity's timely filed lawsuit. Franks's point of error necessitates an overview of third-party liability claims authorized under the Workers' Compensation Act. See Tex. Lab.Code Ann. § 417.001 (West 1995). 3
Under the Workers' Compensation Act "[t]here is but one cause of action against the third party tortfeasor--that of the employee, who owns it burdened by the right of the insurance carrier to recoup itself for compensation paid." Guillot v. Hix, 838 S.W.2d 230, 232 (Tex.1992); see Fort Worth Lloyds v. Haygood, 151 Tex. 149, 246 S.W.2d 865, 869 (1952); Independent E. Torpedo Co. v. Herrington, 128 Tex. 17, 95 S.W.2d 377, 379 (1936). In other words, the right to recover for injuries negligently inflicted by a third party is a right belonging to the injured employee, Herrington, 95 S.W.2d at 379, who may bring a cause of action asserting his or her right to recovery against a third-party tortfeasor, see Tex. Lab.Code Ann. § 417.001(a).
Under the Workers' Compensation Act, an insurance carrier may also enforce the liability of a third party to an injured employee by asserting the injured employee's cause of a action in the name of the injured employee or legal beneficiary. Id. § 417.001(b). 4 An insurance carrier obtains this right through the doctrine of subrogation when its insured, the injured employee, claims compensation benefits. Id. The insurer is subrogated to the employee's right of
recovery only for the amount of compensation it pays the injured employee. See id. § 417.001(b)(2). If an insurer sues to enforce the liability of the third-party tortfeasor and recovers an amount greater than that paid or assumed to the injured employee, it must pay the excess amount to the employee. Id. An insurance carrier's subrogation rights under the Workers' Compensation Act are entirely derivative of the employee's right of recovery. See Guillot, 838 S.W.2d at 232.
In the instant cause, appellees argue that Industrial Indemnity only asserted its derivative subrogation cause of action, not the third-party liability cause of action which Franks untimely pleaded. However, Franks maintains that even though Industrial Indemnity filed the action in its own name, it asserted not only its own derivative cause of action, but also the third-party liability cause of action that he later alleged in his plea in intervention. Franks argues that his plea relates back to the third-party liability cause of action Industrial Indemnity asserted in its timely filed original petition, thereby avoiding the bar of limitations. Assuming without deciding that Franks's plea will relate back to Industrial Indemnity's original petition if both pleadings assert the same cause of action, 5 we must determine whether Industrial Indemnity and Franks did in fact plead the same cause of action--in other words, whether Industrial Indemnity's original petition asserts Franks's third-party cause of action in addition to its own derivative subrogation cause of action.
Under Labor Code section 417.001(b), an insurance carrier clearly asserts the employee's third-party liability cause of action when it files an action in the injured employee's name. Tex. Lab.Code Ann. § 417.001(b). Under the former third-party liability provision of the Workers' Compensation Act, the insurance carrier could also assert the employee's third-party liability cause of action, in addition to pleading its own subrogation cause of action, even when it filed the action in its own name. Former art. 8307, § 6a; 6 see Yeary v. Hinojosa, 307 S.W.2d 325, 332 (Tex.Civ.App.--Houston 1957, writ ref'd n.r.e.).
In Yeary, the workers' compensation carrier filed in its own name a petition alleging the third party's negligence to the injured employee and the carrier's subrogation rights to the extent of the compensation it had paid the employee. 307 S.W.2d at 330. After the two-year limitations period had passed, the insurance carrier amended its original petition, substituting the employee's name for its own. Id. at 328. The amended petition prayed that the employee recover from the third party the same amount claimed by the insurance carrier in the original petition. Id. Presented with the issue of whether the employee's cause of action was barred by the two-year statute of limitations, the Yeary court held that the cause of action later asserted in the employee's name in the amended petition was not barred by the two-year statute of limitations because the pleading did not alter or amend the cause of action asserted in the insurance carrier's name in the timely filed original petition. Id. at 330. Both petitions asserted the employee's personal injury suit against the negligent third party regardless of whether the cause of action "was asserted originally by the insurance carrier in its name or in the name of the injured employee." Id. at 332. The suit as We are not persuaded by Franks's argument, relying upon Yeary, that Labor Code section...
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Franks v. Sematech, Inc.
...of Franks' claim and Franks' claim was barred, the district court dismissed Industrial Indemnity's action. The court of appeals affirmed. 938 S.W.2d 462. There is but one cause of action for an employee's injuries, and it belongs to the employee. Guillot, 838 S.W.2d at 232. If the employee ......