Insurance Co. of North America v. Wright
| Decision Date | 25 August 1994 |
| Docket Number | No. 01-93-00327-CV,01-93-00327-CV |
| Citation | 886 S.W.2d 337 |
| Parties | INSURANCE COMPANY OF NORTH AMERICA, Appellant, v. Sue WRIGHT, Individually and as Administratrix of the Estate of Bobby Clinton Wright, Deceased, and Gary Wright, Mark Wright, and Jeff Wright, Appellees. (1st Dist.) |
| Court | Texas Court of Appeals |
Gary A. Scarzafava, Kathleen Walsh Beirne, Annelie Menke, Houston, for appellant.
Richard Warren Mithoff, Tommy Jacks, Scott Rothenberg, Houston, for appellees.
Before COHEN, WILSON and ANDELL, JJ.
Appellant, Insurance Company of North America (ICNA), appeals the trial court's approval of an apportionment of settlement proceeds.
Factual and procedural background
In March 1991, Bobby Clinton Wright was killed when a train hit his pickup truck. Wright, self-employed, was killed in the course and scope of his employment. ICNA was his worker's compensation carrier.
Wright was survived by his wife Sue, his mother Bertha, and his grown sons, Jeff, Mark, and Gary. After Wright's death, ICNA paid Sue Wright medical expenses of $62.50, funeral expenses of $2,500, and worker's compensation indemnity benefits of $37,121.92. ICNA also began paying Sue Wright weekly death benefits of $428. As of the date of trial, the amount of benefits ICNA had paid Sue Wright, including weekly death benefits, totalled $40,968.42.
The surviving Wrights filed a wrongful death suit against: Southern Pacific Transportation Company, the owner of the train that hit Wright; three members of the train crew; and Missouri Pacific Railroad Company, which owned the track and right-of-way where Wright was killed. Trial was set for November 30, 1992. On that date, the plaintiffs and Southern Pacific announced they had settled for $600,000. All other defendants had been dismissed. The plaintiffs agreed to the following apportionment:
Sue Wright $100,000
Gary Wright $160,000
Mark Wright $160,000
Jeff Wright $160,000
Bertha Wright $20,000
Sue Wright made the decision to apportion the settlement in this fashion. Southern Pacific did not play a role in determining the apportionment of the settlement proceeds, but had no objection to the apportionment. ICNA expressly approved the amount of the settlement, but objected to the apportionment. ICNA requested a jury trial on the issue of apportionment, but the trial judge denied this request.
The judgment indicates Southern Pacific agreed to pay plaintiffs $600,000 and the plaintiffs agreed to the apportionment indicated above. The judgment further reflects that ICNA had objected to the apportionment, but that the trial judge approved both the settlement and the apportionment of the settlement proceeds. In her findings of fact, the trial judge stated she "approved as fair and reasonable Plaintiffs' decision to apportion the settlement monies...."
The judgment also showed the following: ICNA and the plaintiffs had entered into a written stipulation that ICNA had a lien against Sue Wright for $40,968.42, an amount that would increase weekly as ICNA continued to pay weekly death benefits; Sue Wright's attorney's fees and expenses totalled $68,757.81; Sue Wright's net recovery was $31,242.19 ($100,000-$68,757.81); and ICNA was to resume Sue Wright's weekly benefits when her net recovery was exhausted. The trial judge's findings of fact reflect that Sue Wright's $31,242.19 was awarded to ICNA, and that because the net amount recovered by Sue Wright was less than the stipulated amount of ICNA's lien, there was no amount in excess of past benefits and medical expenses that could be treated as an advance against future medical payments. As a result of the judgment, ICNA recovered only $31,242.19 of its $40,968.42 lien; it also had to continue making weekly benefit payments of $428 to Sue Wright because, after paying attorney's fees and costs and paying part of ICNA's lien, there was nothing left of Sue Wright's $100,000 that could be considered an advance against these payments.
ICNA brings 24 points of error. In its first point of error, ICNA complains that the trial judge erred in denying ICNA a jury trial on issues pertaining to its subrogation lien and credit for future benefits to be paid to Sue Wright. In points of error two through 24, ICNA complains that: (1) the trial judge erred by approving the plaintiffs' apportionment scheme and by determining its subrogation interest based on this apportionment; (2) the evidence does not support the apportionment; (3) the trial judge improperly subtracted attorneys' fees and litigation costs from Sue Wright's $100,000 in determining the "net amount" subject to subrogation; (4) the trial judge incorrectly determined the amount of the $100,000 to be treated as an advance against future benefit payments; and (5) the trial judge improperly refused to allow ICNA to question the plaintiffs concerning the reasons for the apportionment.
In December 1989, the Texas legislature repealed the existing workers' compensation act (the former Act) 1 and enacted a new workers' compensation scheme (the 1989 Act). The 1989 Act, effective January 1991, has been recodified in the Labor Code. The 1989 Act provided in part:
If at the conclusion of a third party action, a workers' compensation claimant is entitled to compensation, the net amount recovered by the claimant from the third party action shall be applied to reimburse the insurance carrier for past medical benefits and medical expenses paid. Any amount in excess of past benefits and medical expenses shall be treated as an advance against future benefit payments of compensation that the claimant is entitled to receive under this Act. If the advance is adequate to cover all future compensation and medical benefit payments as provided by this Act, the insurance carrier is not required to make further payments. If the advance is insufficient, the insurance carrier shall resume payments when the advance is exhausted....
TEX.REV.CIV.STAT.ANN. art. 8308-4.05(f). Act of December 13, 1989, 71st Leg., 2d C.S., ch. 1, 1989 Tex.Gen.Laws 1, 33. The 1989 Act is applicable to this appeal because Bobby Wright died in March 1991.
Waiver of jury trial and right to complete subrogation
In its first point of error, ICNA asserts the trial judge improperly denied its right to a jury trial. In point of error 24, ICNA complains the trial judge erred in finding it waived its statutory right to complete subrogation. We agree.
The trial judge's conclusions of law included the following:
5. If intervenor, INA, had not approved the total settlement of all Plaintiffs' claims and causes of action against all Defendants herein for the total sum of SIX HUNDRED THOUSAND DOLLARS AND NO CENTS ($600,000), the amount of damages, if any, to be awarded to each individual Plaintiff herein would have been determined by the jury.
6. Intervenor, INA, expressly waived any right it might have had to a jury apportionment of damages to each individual Plaintiff herein by agreeing to the settlement set forth herein.
The statement of facts is replete with ICNA's strenuous objections to the plaintiffs' apportionment scheme. The judgment and the trial judge's findings of fact both reflect that ICNA objected to the apportionment and that the trial judge approved the apportionment over ICNA's objections. We have found no authority holding that by agreeing to the lump sum settlement amount, ICNA waived either its objections to the apportionment scheme, its right to a jury trial on the issue of apportionment, or its statutory subrogation rights. We hold the trial judge erred in finding ICNA waived its right to a jury apportionment of damages.
Plaintiffs assert that ICNA waived points of error one and 24 and cannot challenge conclusion of law number six on appeal because it did not set forth that point of error in its request for a limited record on appeal. Plaintiffs rely on TEX.R.APP.P. 53(d), which provides in part, "If appellant requests or prepares a partial statement of facts, he shall include in his request or proposal a statement of the points to be relied on and shall thereafter be limited to such points." (Emphasis added.) Here, ICNA requested and provided a complete statement of facts. Further, ICNA specifically designated as a point on appeal the trial court's denial of a jury trial. We find ICNA did not waive review of points of error one and 24.
We sustain points of error one and 24.
Apportionment of the settlement proceeds
ICNA asserts that by allowing the plaintiffs to unilaterally apportion the settlement proceeds, the trial judge has allowed the plaintiffs to circumvent the requirements of the Workers' Compensation Act, effectively depriving ICNA of recovery of all sums paid in past benefits and forcing ICNA to continue weekly payments to Sue Wright. The plaintiffs argue that they were entitled to apportion the settlement proceeds among themselves, and that their decision to apportion $100,000 to Sue Wright is binding upon ICNA because ICNA's cause of action is derivative of Sue Wright's right to recover. The issue before this Court is whether a group of plaintiffs that includes both workers' compensation beneficiaries and non-beneficiaries can divide among themselves a lump sum settlement in a manner that prejudices the worker's compensation carrier's subrogation rights. We hold they cannot do so.
The wrongful death cause of action belonged to Bobby Clinton Wright's estate, which owned it subject to ICNA's right to reimbursement for compensation paid. Guillot v. Hix, 838 S.W.2d 230, 232 (Tex.1992); New York Underwriters Ins. Co. v. State Farm Mutual Auto. Ins. Co., 856 S.W.2d 194, 199 (Tex.App.--Dallas 1993, no writ). This statutory right entitles the carrier to receive the first monies paid to an injured employee or his representatives by a third party tortfeasor; the employee or his...
To continue reading
Request your trial
-
Hunley v. Silver Furniture Mfg. Co.
...Elevators, Inc., 78 Mich.App. 97, 259 N.W.2d 869, 876 n. 7 (1977); Darr Constr. Co., 715 A.2d at 1081; Ins. Co. of N. Am. v. Wright, 886 S.W.2d 337, 341-42 (Tex.Ct.App.—Hous.1994); DeMeulenaere, 342 N.W.2d at 6 Legislatures in several jurisdictions have enacted statutes mandating safeguards......
-
Hunley et al v. Silver Furniture Mfg. Co. et al, 99-00479
...Esco Elevators, Inc., 259 N.W.2d 869, 876 n.7 (Mich. Ct. App. 1977); Darr Constr. Co., 715 A.2d at 1081; Ins. Co. of N. Am. v. Wright, 886 S.W.2d 337, 341-42 (Tex. Ct. App. Hous. 1994); DeMeulenaere, 342 N.W.2d at 6 Legislatures in several jurisdictions have enacted statutes mandating safeg......
-
Elliott v. Hollingshead
...Fire Ins. Co. v. Hernandez, 918 S.W.2d 576, 578 (Tex.App.-Corpus Christi 1996, writ denied); Ins. Co. of N. Am. v. Wright, 886 S.W.2d 337, 341 (Tex.App.-Houston [1st Dist.] 1994, writ denied). The carrier's right to reimbursement is mandatory, and until the carrier is reimbursed in full, a ......
-
Autry v. Dearman
...court costs are to be deducted from the third-party recovery before reimbursing the carrier. Insurance Co. of N. Am. v. Wright, 886 S.W.2d 337, 344 (Tex.App.--Houston [1st Dist.] 1994, writ denied); New York Underwriters Ins. Co. v. State Farm Mut. Auto. Ins. Co., 856 S.W.2d 194, 203 (Tex.A......