Gray v. Holloway Const. Co.

• Citation: 834 S.W.2d 277
• Parties: Walter E. GRAY, Appellee, v. HOLLOWAY CONSTRUCTION COMPANY and Royal Insurance Company, Appellants.
• Decision Date: 26 May 1992
• Court: Tennessee Supreme Court

Page 277

834 S.W.2d 277

Walter E. GRAY, Appellee, v. HOLLOWAY CONSTRUCTION COMPANY and Royal Insurance Company Appellants.

Supreme Court of Tennessee at Nashville.

May 26, 1992.

David T. Hooper, Nashville, for appellants.

Patrick A. Flynn, Columbia, for appellee.

OPINION

DAUGHTREY, Justice.

This workers' compensation case involves an appeal by the employer and its insurance carrier from a judgment awarding permanent partial disability and medical benefits to the employee, Walter Gray. The appellants contend that the employee made a binding election to receive benefits under Texas law and is thus precluded from seeking benefits under Tennessee law. We disagree and affirm.

On June 13, 1986, Walter Gray suffered a work-related injury while employed in Dallas, Texas, by Holloway Construction Company, a Texas-based company. During the period that he was off work recuperating from this initial injury, Gray received temporary disability benefits from Holloway Construction's workers' compensation insurance carrier, National Union Fire Insurance Company. Gray subsequently filed a notice of his claim against National Union with the Texas Industrial Accident Board, as required by the Texas workers' compensation statute. It was assigned Board No. 86-117963. National Union paid Gray's medical bills for the June injury and continued to pay temporary disability benefits until Gray was able to return to work in August 1986.

At that time, Gray was sent to the Holloway Construction site at the new Saturn automobile plant in Maury County, Tennessee. There, on October 3, 1986, he suffered a second work-related injury. Gray notified his employer of this injury and began receiving temporary benefit payments from National Union, just as he had for the earlier injury.

National Union continued paying benefits until March 1987, when the insurer apparently learned for the first time that Gray's latest injury had occurred not in Texas, which was covered geographically by the policy issued to Holloway Construction, but in Tennessee, which was outside the policy's coverage. The record suggests that National Union did not know the location of the second injury until Gray filed his second claim with the Texas Industrial Accident Board on February 14, 1987 (Board No. 87-57836) and that National Union had resumed payments to Gray under the erroneous assumption that Gray had been injured in Texas on the second occasion, as well as the first.

In fact, as the trial judge later found, Royal Insurance Company administers workers' compensation claims for Saturn Corporation and its contractors and subcontractors, one of which was Holloway Construction.

In pursuing his compensation claims for the June and October injuries, Gray was represented by a Texas attorney, Cora Meyer. She notified the Texas Industrial Accident Board on March 13, 1987, that claims Nos. 86-117963 and 87-057836, both filed against National Union, could be handled as "companion cases." Two weeks later, Meyer received a copy of a notice sent by National Union to the Industrial Accident Board, dated March 27, 1987, which read as follows:

National Union is not the correct workers' compensation carrier. The [claimant] was injured on 10/3/86 in Columbia, Tennessee. The proper carrier for this location is Royal Insurance ... [in] Nashville, Tennessee.... This was confirmed by Debra Dicanto, claims manager of Royal Insurance.

In the ensuing months, Meyer undertook to negotiate a settlement of Gray's claim against National Union for the June 1986 injury, ¹ and she turned over the matter of the October 1986 claim to a law firm in Columbia, Tennessee, which continues to represent Gray to this day. Suit was filed against Holloway Construction and Royal Insurance in Maury County on September 18, 1987, within the one-year statute of limitation. Meyer notified the Texas Board of this action in November 1987, and, on February 2, 1988, she filed a formal request that the previously scheduled hearing on claim No. 87-057836 against National Union be cancelled and "that no action be taken on this case at this time."

The Tennessee action against Holloway Construction Co. and Royal Insurance was tried on November 30, 1990, and resulted in an award to Gray of 50 percent permanent partial disability to the body as a whole and recovery of his medical expenses. The appellants raise no question about the propriety of the trial court's finding of liability on the merits, nor do they dispute the size of the award. Their sole contention is that suit in Tennessee was barred by Gray's election to pursue his remedy for work-related injuries in Texas and, therefore, that they were entitled to a summary judgment, or to judgment at trial, on this basis. They rely for authority on Tidwell v. Chattanooga Boiler & Tank Co., 163 Tenn. 420, 43 S.W.2d 221 (1931); Thomas v. Transport Insurance Co., 532 S.W.2d 263 (Tenn.1976); True v. Amerail Corp., 584 S.W.2d 794 (Tenn.1979); and Hale v. Commercial Union Assurance Cos., 637 S.W.2d 865 (Tenn.1982). In response, the employee acknowledges the controlling nature of this body of authority but insists that, on these facts, there was no binding election. The trial court agreed, relying on Hale, supra and so, ultimately, do we. But in affirming this judgment, we do not retreat from the sound principles recognized in our recent decision in Perkins v. BE & K, Inc., 802 S.W.2d 215 (Tenn.1990), which was announced two weeks after entry of judgment in the trial court.

As the appellants correctly point out, Tennessee case law holds that an employee injured on the job in another state, who files a workers' compensation claim in that jurisdiction and obtains either an award, as in Tidwell v. Chattanooga Boiler & Tank Co., supra, or a court-approved settlement of the claim, as in Perkins v. BE & K, Inc., supra, or who actively pursues a claim in a venue that has jurisdiction, is barred from filing a subsequent claim in Tennessee.

Although the basis for this rule is frequently expressed in the Tennessee cases in terms of an "election of remedies" on the part of the plaintiff-employee, ² it is also evident that an out-of-state judgment would be entitled to full faith and credit in the courts of Tennessee, and that a further recovery for the same injury under the Tennessee workers' compensation statute would be barred by the federal constitution. Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149 (1943) (Louisiana resident injured on the job in Texas, received final award in accordance with applicable workers' compensation statute from Texas Industrial Accident Board; held: recovery for injury in subsequent Louisiana proceeding barred by full faith and credit clause).

On the other hand, we have held on more than one occasion that mere acceptance by the employee of benefit payments initiated by the employer or its insurance carrier, without more, will not preclude recovery in Tennessee. Hale v. Commercial Union Assurance Cos., supra, 637 S.W.2d at 870. In that case, the worker was originally employed by Payless Shoes in Memphis, Tennessee, where she resided. Her employer later transferred her to Russellville, Arkansas, to manage its store there. Injured in Arkansas, Barbara Hale returned to Memphis for medical treatment and filed her workers' compensation action in Tennessee. The employer's insurance carrier was granted summary judgment at the trial level, on the theory that Hale had elected to proceed under Arkansas law by accepting benefits tendered under the Arkansas workers' compensation scheme. We reversed that ruling, holding that there was insufficient proof of an election of remedies because the record failed to reveal that the plaintiff had made a "knowing, informed choice" to accept Arkansas benefits rather than file a claim in Tennessee, or that she acted with "the degree of knowledge which is required in order for a binding election to be made." Id. at 870.

The Hale court relied for authority on the Court's earlier decision in Thomas v. Transport Insurance Co., supra, 532 S.W.2d 263. There, the claim of a Tennessee worker hired by an Arkansas firm was resisted on the ground that the plaintiff had accepted benefits under Arkansas law and was thus precluded from filing suit in Tennessee. We reversed the trial court's order of summary judgment and remanded the case for trial on this issue, holding that "the fact that the employee did receive benefits ... for over one year before taking any legal action is a circumstance against him," but that "it is not conclusive or dispositive of the case, however, standing alone and without explanation." Id. at 267.

In passing, we made certain observations in Thomas which, although they constitute dictum in that case, are relied upon by the appellants as dispositive of the employee's claim in this case. We forecast that:

... if the employee has taken any affirmative action to seek a recovery under the law of [Arkansas] or has voluntarily, deliberately and with full knowledge of his options, accepted benefits under Arkansas law, he may well be precluded by this election and may not be entitled to proceed in Tennessee.

Id., citing Tidwell v. Chattanooga Boiler & Tank Co., supra (emphasis added).

In the recent case of Perkins v. BE & K, Inc., supra, we dealt with a factual situation that fit neatly within the Thomas dictum. The employee in Perkins had been injured in Virginia and had accepted temporary disability benefits and reimbursement for medical expenses totalling $35,500, as part of an "agreement for compensation" executed between the worker and the employer's insurance carrier, pursuant to the Virginia compensation scheme. Id., 802 S.W.2d at 216. The Virginia Industrial Commission subsequently approved this settlement, ruling at a hearing not attended by Eddie Perkins that these benefits constituted a final "award," i.e., that the employee was able to return to work and not entitled to...