Harris County Emergency Services v. Miller

• Decision Date: 07 August 2003
• Docket Number: No. 01-00-00846-CV.,01-00-00846-CV.
• Citation: 122 S.W.3d 218
• Parties: HARRIS COUNTY EMERGENCY SERVICES DISTRICT # 1, Appellant, v. Robert E. MILLER, Appellee.
• Court: Texas Court of Appeals

122 S.W.3d 218

HARRIS COUNTY EMERGENCY SERVICES DISTRICT # 1, Appellant, v. Robert E. MILLER, Appellee.

No. 01-00-00846-CV.

Court of Appeals of Texas, Houston (1st Dist.).

August 7, 2003.

Gerald K. Payte, Janice Payte Oviatt, Payte & Kologinczak, P.C., Houston, for appellant.

Teresa L. De Ford, Rathwell & Nizialek, The Woodlands, Timothy Cox Anderson, Austin, for appellee.

On original submission, panel consisted of Chief Justice RADACK, Justice DUGGAN,^* and former Chief Justice SCHNEIDER.^**

OPINION ON EN BANC RECONSIDERATION

LEE DUGGAN, JR, Justice (Retired).

Appellant, Harris County Emergency Services District # 1 (HCESD), a state political subdivision, appeals the district court's order dismissing with prejudice its petition for judicial review of an award of benefits to appellee, Robert E. Miller, by the Texas Workers' Compensation Commission (TWCC). On January 23, 2003, this Court issued an opinion reversing the trial court's order of dismissal. In an order dated February 26, 2003, however, this Court, en banc and on its own motion, granted reconsideration of this appeal. See Tex.R.App. P. 49.7. This Court's former judgment of January 23, 2003 is vacated, set aside, and annulled, and we withdraw our previous opinion of that date and substitute this opinion in its stead.

HCESD asserts four issues on appeal, contending that the trial court erred in entering its order impliedly finding that it lacked either personal jurisdiction over Miller or subject-matter jurisdiction over HCESD's appeal. We reverse the trial court's order of dismissal for lack of subject-matter jurisdiction and render judgment, on the merits, that HCESD take nothing.

Background

While working as a paramedic for HCESD's Emergency Medical Service (EMS) Rapid Response Team, Miller injured his back lifting a patient. He became disabled for approximately 17 months. After his injury, Miller learned that HCESD did not provide workers' compensation insurance benefits under any of the three options mandated by the Labor Code. Tex. Lab.Code Ann. § 504.011(1)-(3) (Vernon 1996).¹ Initially, HCESD claimed that it did not comply because of an oversight and paid Miller some medical expenses and benefits, but eventually stopped paying him.

A. The Benefit-Review Conference

Miller filed a TWCC claim for benefits and income, which claims HCESD did not challenge. The hearing officer at the benefit-review conference² determined that (1) Miller had sustained a compensable injury in the course and scope of his employment; (2) HCESD became a self-insurer by default because it was required to provide workers' compensation benefits to its employees, but did not; and (3) HCESD owed Miller medical expenses and income benefits.

B. The Contested-Case Hearing

HCESD challenged the decision of the benefit-review conference at a TWCC contested-case hearing,³ disputing TWCC's jurisdiction to order compensation on the basis that HCESD was a non-subscriber. In its contested-case-hearing decision, the TWCC overruled the determination of the benefit-review conference and ruled, in part,⁴ that (1) HCESD had wilfully and intentionally failed to comply with the provisions of the Labor Code mandating workers' compensation benefits; (2) HCESD nevertheless did not become a self-insurer and was not liable to Miller; and (3) TWCC had neither jurisdiction nor venue to hear the case. Miller timely appealed the contested-case hearing decision to the TWCC Appeals Panel. See Tex. Lab.Code Ann. § 410.202(a) (Vernon 1996) ("Request for Appeal"; "Response").

C. The TWCC Appeals Panel

HCESD did not file a response to Miller's appeal to the TWCC Appeals Panel, although it was required by statute to do so. See Tex. Lab.Code Ann. § 410.202(b) (Vernon 1996). TWCC Appeals Panel No. 112 issued a decision determining that (1) TWCC had jurisdiction to hear the appeal; (2) venue was proper; (3) HCESD was required to provide workers' compensation coverage for its employees; and (4) having failed to provide insurance under a workers' compensation policy or to enter into an interlocal agreement with other political subdivisions to provide self-insurance, as authorized by the Code, HCESD automatically, or by default, extended these benefits to Miller as a self-insurer. See Tex. Lab.Code Ann. § 504.011(1)-(3). The Appeals Panel reinstated earlier compensable-injury determination of the benefit-review conference and ordered HCESD to pay medical and income benefits in accordance with the Labor Code and TWCC rules.

D. This Litigation

HCESD timely filed its petition in the district court for judicial review to set aside the TWCC Appeals Panel's decision and to obtain declaratory relief.⁵ See Tex. Lab.Code Ann. § 410.252 (Vernon 1996) ("A party may seek judicial review by filing suit not later than the 40th day after... the decision of the appeals panel...."); see also id. § 504.011(1) (providing for self-insurer method of providing coverage).

Miller filed a pleading in the district court styled "Plea to Jurisdiction and Original Answer of Defendant Robert E. Miller Subject Thereto," asserting that the trial court lacked both personal and subject-matter jurisdiction over him. Following the hearing on the plea to the jurisdiction, the trial court granted Miller's motion and dismissed HCESD's case with prejudice. The record on appeal contains no reporter's record of the hearing, and the trial court's order of dismissal states no basis for the ruling.

In its fourth issue, which is dispositive of this appeal, HCESD asserts that the district court erred by impliedly holding that HCESD failed to exhaust its administrative remedies within the TWCC by not filing a response to Miller's appeal to the TWCC Appeals Panel.

Judicial Review of TWCC Decisions

An agency's enabling legislation determines the procedures for obtaining review of agency decisions. Tex. Natural Res. Conservation Comm'n v. Sierra Club, 70 S.W.3d 809, 811 (Tex.2002). The Labor Code creates a modified trial de novo procedure that applies only to judicial review of TWCC actions involving "eligibility for... income ... benefits." Tex. Lab.Code Ann. § 410.301(a) (Vernon 1996); see Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 960 (Tex.1999).

Parties have no absolute right to challenge an administrative order; the right of judicial review arises only when (1) a statute creates it, (2) the order adversely affects a vested property right, or (3) the order otherwise violates a constitutional right. See Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex.2001); cf. Dep't of Protective & Regulatory Servs. v. Schutz, 101 S.W.3d 512, 522 (Tex.App.-Houston [1st Dist.] 2002, no pet. h.) ("No right of judicial review from the action of an administrative agency exists unless a statute provides for such review, the action violates constitutional procedural due process, or the constitution waives the state's immunity from suit.").

HCESD Failed to Exhaust its Administrative Remedies

Miller's motion to dismiss pled, among other grounds urging lack of subject-matter jurisdiction, that HCESD failed to exhaust its administrative remedies by failing to file a response to Miller's request for review of the contested-case hearing officer's decision with the TWCC Appeals Panel. Although required to do so by section 410.202(b) of the Labor Code, HCESD did not respond to Miller's appeal to the TWCC Appeals Panel. See Tex. Lab.Code Ann. § 410.202(b). By failing to respond to Miller's appeal to the Appeals Panel, HCESD failed to comply with one of the "successive steps in the progress and maturity of [Miller's] claim" mandated by the Labor Code and thus failed to exhaust its administrative remedies. See Lumbermens Mut. Cas. Co. v. Manasco, 971 S.W.2d 60, 62 (Tex.1998); Ankrom v. Dallas Cowboys Football Club, Ltd., 900 S.W.2d 75, 78, 79-80 (Tex.App.-Dallas 1995, writ denied). Under prior law, a party's failure to exhaust its administrative remedies deprived the trial court of jurisdiction to consider challenges to the administrative body's determinations. See Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084 (1926), overruled, Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000); Dallas Cowboys Football Club, Ltd., 900 S.W.2d at 79-80.

Dubai Petroleum Co. v. Kazi Overruled Mingus

A. Failure to Exhaust Administrative Remedies No Longer Per Se Jurisdictional

In Dubai Petroleum Co. v. Kazi, the supreme court held that foreign-citizen plaintiffs' burden to demonstrate "equal treaty rights" with the United States was not a jurisdictional prerequisite to their filing suit but a condition on which their right to relief depended. Id., 12 S.W.3d at 76-77. In reaching this holding, the supreme court overruled Mingus to the extent that Mingus held that a trial court categorically lacks subject-matter jurisdiction over a controversy when a party has failed to comply with the requirements of a statute. See Kazi, 12 S.W.3d at 76. After Kazi, therefore, failure of a party to comply with statutory requirements will no longer categorically constitute a jurisdictional bar to review of an agency determination. See id.; Helton v. R.R. Comm'n, No. 01-01-01007-CV, 126 S.W.3d 111, 118, 2003 WL 21299819 (Tex.App.-Houston [1st Dist.] June 5, 2003, no pet. h.); Sierra Club v. Tex. Natural Res. Conservation Comm'n, 26 S.W.3d 684, 688 (Tex.App.-Austin 2000) (Sierra Club I), aff'd on other grounds, 70 S.W.3d 809 (Tex.2002). Rather, lack of compliance with statutory prerequisites will, in certain instances, affect only the plaintiff's right to relief. See Kazi, 12 S.W.3d at 76. By removing the jurisdictional bar as an absolute, while acknowledging that the bar sometimes will and sometimes will not apply, the Kazi court implicitly recognized that some statutory prerequisites will remain jurisdictional. See id.

As this Court noted recently in Helton, the opinion of the Third Court of Appeals in Sierra Club I provides a workable distinction between statutory...