Lambert v. Affiliated Foods Inc.

• Decision Date: 16 November 1999
• Parties: (Tex.App.-Amarillo 1999) DANNY LEE LAMBERT AND TERESA LAMBERT, INDIVIDUALLY, AND AS NEXT FRIENDS OF RUSTY LAMBERT AND REBECCA LAMBERT, APPELLANTS v. AFFILIATED FOODS, INC., APPELLEE NO. 07-98-0371-CV
• Court: Texas Court of Appeals

Page 1

20 S.W.3d 1 (Tex.App.-Amarillo 1999)

DANNY LEE LAMBERT AND TERESA LAMBERT, INDIVIDUALLY, AND AS NEXT

FRIENDS OF RUSTY LAMBERT AND REBECCA LAMBERT, APPELLANTS v. AFFILIATED FOODS, INC., APPELLEE

NO. 07-98-0371-CV

IN THE COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS AT AMARILLO

NOVEMBER 16, 1999

Rehearing Overruled Jan. 20,2000.

FROM THE 251ST DISTRICT COURT OF RANDALL COUNTY; NO. 41,003-C; HONORABLE PATRICK A. PIRTLE, JUDGE

Before BOYD, C.J., and REAVIS and JOHNSON, JJ.

Don H. Reavis, Justice

By this appeal, Danny Lee Lambert and Teresa Lambert, individually and as next friends of Rusty Lambert and Rebecca Lambert (Lambert), challenge the trial court's order granting summary judgment that they take nothing against Affiliated Foods, Inc. (Affiliated) on their common law cause of action for personal injuries sustained by Lambert while in the course and scope of his employment with Affiliated. Together with a global issue¹ Lambert presents four specific sub-issues, to wit: (A) whether waivers of employees' rights against non-subscribing employers not providing benefits equivalent to Workers' Compensation Benefits can be enforced or whether such waivers are void or unenforceable as against Texas public policy; (B) whether a waiver can be enforced if executed as part of an employment contract; (C) whether Affiliated's plan benefits meet or match benefits provided under Workers' Compensation, and (D) whether estoppel and ratification defenses are precluded by Texas public policy and Affiliated's unclean hands.² Based upon the rationale expressed herein, we affirm.

Effective November 3, 1991, Affiliated elected not to provide workers' compensation insurance coverage, see Tex. Lab. Code Ann. 406.002 (Vernon 1996), became a non-subscriber, and established the Affiliated Foods, Inc. Employee Disability Benefit Plan (plan), which was in effect on May 13, 1992, the date Lambert was hired, and thereafter. The plan provides alternative no-fault coverage for occupational and non-occupational injuries to employees³ who voluntarily elect to participate in the plan. Because of our analysis which is discussed below, a detailed comparison of the plan's benefits with benefits provided under the Workers' Compensation Act⁴ is not necessary. When Lambert was hired, he acknowledged receipt of notice in a document entitled "Notice to New Employees" that Affiliated did not provide workers' compensation insurance coverage. Also, on May 13, 1992, Lambert signed a one-half page document entitled "Conditional Employment Agreement" agreeing that if any physical conditions were discovered upon his physical examination which might interfere with his work, or if his drug screening results were questionable, his employment would not continue.

Following completion of the foregoing documentation, Lambert attended an employee orientation meeting during which a representative of Affiliated discussed and presented an election form to Lambert entitled "ELECTION TO PARTICIPATE IN THE AFFILIATED FOODS, INC. EMPLOYER DISABILITY BENEFIT PLAN." Among other things, the election signed by Lambert contained the following three provisions in bold print:

. . . AS REQUIRED BY THE TERMS OF THE PLAN, THE UNDERSIGNED HEREBY IRREVOCABLY AND UNCONDITIONALLY RELEASES AND WAIVES ANY AND ALL CLAIMS AND CAUSES OF ACTION, WHETHER NOW EXISTING OR ARISING IN THE FUTURE, THAT THE UNDERSIGNED MAY HAVE AGAINST AFFILIATED FOODS, INC., ITS OFFICERS, DIRECTORS, SHAREHOLDERS, AGENTS AND EMPLOYEES, THAT ARISE OUT OF OR ARE RELATED TO ILLNESS, INJURIES OR DEATH SUSTAINED BY THE UNDERSIGNED IN THE COURSE AND SCOPE OF THE EMPLOYMENT OF THE UNDERSIGNED BY AFFILIATED FOODS, INC.

* * *

I UNDERSTAND THAT BY EXECUTION OF THIS DOCUMENT, I WILL LOSE THE RIGHT TO SUE AFFILIATED FOODS, INC. AND PEOPLE EMPLOYED BY IT IN CONNECTION WITH INJURIES, ILLNESS OR DEATH SUSTAINED IN MY EMPLOYMENT WITH AFFILIATED FOODS, INC. AS A RESULT OF ITS OR THEIR NEGLIGENCE OR OTHER ACTIONABLE CONDUCT. MY ONLY REMEDY WILL BE TO BENEFITS UNDER THE PLAN.

* * *

I understand that if I elect to participate in the Plan, I may revoke my election to participate by delivery of a written revocation to the Human Resources Department of Affiliated Foods, Inc. at any time within three days of the date upon which I executed the original election to participate, PROVIDED, HOWEVER, that no such revocation shall be effective with respect to any occupational injury I sustain prior to the time that my written revocation is delivered to the Human Resources Department.

Following the foregoing provisions is the typewritten phrase, "I hereby elect to Participate in the Plan" and appearing below it are Lambert's signature and the signature of a representative of Affiliated as a witness, and the date of May 13, 1992.

Lambert claims he was injured during the course and scope of his employment with Affiliated on February 12, 1993. Following his injury, Lambert received, accepted, and retained disability and medical care benefits from the plan in the total amount of $57,698.32. Then, on February 10, 1995, Lambert filed suit against Affiliated seeking common law personal injury damages. By its original answer, in addition to its general denial, Affiliated alleged affirmative defenses including (i) waiver, (ii) Lambert's injuries were proximately caused by his sole negligence, and (iii) offset for benefits previously paid. By his subsequent amended petition, Lambert alleged typical common law negligence claims for personal injuries against Affiliated and that certain common law defenses were not available; however, Lambert did not reply to or seek to set aside or avoid the waiver or election agreement because of fraud, accident, mistake, no consideration, failure of consideration, or the like, or assert that the waiver agreement was unenforceable as against public policy. As grounds⁵ for its first amended motion for summary judgment that Lambert take nothing, Affiliated contended:

* Lambert's negligence claims against Affiliated for his occupational injury are barred by an enforceable post-employment waiver of Lambert's right to sue Affiliated that Lambert voluntarily executed in exchange for receiving $57,698.32 in benefits under Affiliated's Employee Disability Plan;

* Lambert ratified the waiver by accepting $57,698.32 in benefits under Affiliated's Employee Disability Plan for his occupational injury;

* Lambert is estopped from suing Affiliated because he accepted $57,698.32 in benefits under Affiliated's Employee Disability Plan; and

* Because Lambert's claims against Affiliated are barred, the derivative claims of his wife and children for loss of parental and spousal consortium are also barred.

In response to Affiliated's motion, Lambert raised the following issues:⁶ (i) the waiver was void pursuant to section 406.035 of the Texas Labor Code Annotated (Vernon 1996), (ii) the waiver was "tied" to Lambert's employment, (iii) there was no summary judgment evidence showing that the benefits under the plan were equivalent to benefits under the Act, (iv) rights and benefits allegedly given up by Lambert were never explained to him, and (v) waiver, estoppel, and ratification were not well taken for a variety of reasons. Following the hearing, the court took the motion under advisement and on October 22, 1998, signed its order without stating the specific grounds relied on, granting Affiliated's motion for summary judgment that Lambert take nothing by his suit.

Summary Judgment Standard of Review Rule 166a(c)

In reviewing a summary judgment, this Court must apply the standards established in Nixon v. Mr. Property Management, 690 S.W.2d 546, 548-49 (Tex. 1985). A motion for summary judgment must state the specific grounds therefor. Tex. R. Civ. P. 166a(c). For a party to prevail on a motion for summary judgment, he must conclusively establish the absence of any genuine question of material fact and that he is entitled to judgment as a matter of law. Id. A movant must either prove all essential elements of his claim, MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986), or negate at least one essential element of the non-movant's cause of action. Randall's Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). Once the movant has established a right to summary judgment, the non-movant has the burden to respond to the motion for summary judgment and present to the trial court any issues that would preclude summary judgment. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1 979); Barbouti v. Hearst Corp., 927 S.W.2d 37, 64 (Tex.App.--Houston [1st Dist.] 1996, writ denied). Issues which the non-movant contends preclude the granting of a summary judgment must be expressly presented to the trial court by written answer or other written response to the motion and not by mere reference to summary judgment evidence. McConnell v. Southside School Dist., 858 S.W.2d 337, 341 (Tex. 1993). Issues not expressly presented to the trial court in writing shall not be considered on appeal as grounds for reversal. Tex. R. Civ. P. 166a(c). Further, all theories in support of or in opposition to a motion for summary judgment must be presented in writing to the trial court. Casso v. Brand, 776 S.W.2d 551, 553 (Tex. 1989).

By sub-issue A, Lambert contends the waiver or election executed by Lambert of rights to sue Affiliated, a non-subscribing employer, for common law negligence, is unenforceable on grounds of public policy because the benefits provided by the employer's plan are not equivalent to benefits provided under the Act. Also, by sub-issue D, Lambert contends that estoppel and ratification defenses are likewise unenforceable on public policy grounds. We disagree. Because these sub-issues present the same public policy issue, we will consider them together.

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