Lumbermens Mut. Cas. Co. v. Manasco, No. 97-1005

• Court: Supreme Court of Texas
• Writing for the Court: ABBOTT, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, GONZALEZ, HECHT, ENOCH, OWEN, BAKER and HANKINSON
• Citation: 971 S.W.2d 60
• Decision Date: 23 June 1998
• Docket Number: No. 97-1005
• Parties: LUMBERMENS MUTUAL CASUALTY CO., Petitioner, v. Stan MANASCO, Respondent.

Page 60

971 S.W.2d 60 LUMBERMENS MUTUAL CASUALTY CO., Petitioner,
v.
Stan MANASCO, Respondent. No. 97-1005. Supreme Court of Texas. Argued March 31, 1998.
Decided June 23, 1998.

Page 61

Jacqueline M. Stroh, Donald Francis Lighty, Beaumont, for Petitioner.

Mike Jacobellis, Beaumont, for Respondent.

ABBOTT, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, GONZALEZ, HECHT, ENOCH, OWEN, BAKER and HANKINSON, Justices, join.

The issue in this case is whether a workers' compensation claimant who failed to appeal his original impairment rating can reopen the issue months later by arguing, under Texas Labor Code section 410.307, that a "substantial change of condition" has occurred. The trial court granted summary judgment for the workers' compensation insurance carrier, concluding that the issue could not be reopened. The court of appeals reversed. Manasco v. Lumbermens Mutual Cas. Co., 951 S.W.2d 286 (Tex.App.--Beaumont 1997) We hold that a claimant may not use section 410.307 to reopen his impairment rating after his time for appeal has lapsed. We therefore reverse the court of appeals' judgment and render judgment that Manasco take nothing.

I

In 1989, the Legislature enacted the Texas Workers' Compensation Act to restructure the workers' compensation system. See Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 510 (Tex.1995). The 1989 Act mandates a three-stage hearing process to resolve disputed claims: 1) a benefit review conference; 2) a contested case hearing; and 3) an administrative appeal. The benefit review conference is a nonadversarial, informal proceeding aimed at resolving disputed issues by mutual agreement. TEX. LAB.CODE § 410.021. The presiding benefit review officer informs the parties of their rights, mediates the dispute, and may ask the parties questions. Id. § 410.026(a), (c). The officer does not make a formal record, but prepares a written report detailing each issue not settled at the conference. Id. §§ 410.026(d), 410.031(a). The officer then makes a recommendation on the disputed issues and on the payment or denial of benefits. Id. § 410.031(b)(4), (5).

If disputed issues remain after the benefit review conference, the parties may elect to arbitrate or proceed to a contested case hearing. TEX. LAB.CODE §§ 410.104, 410.151. The contested case hearing is a formal evidentiary proceeding with sworn testimony and prehearing discovery procedures. Id. §§ 410.151-169. The hearing officer decides the disputed issues and issues a written decision, setting forth factual and legal findings and awarding benefits if they are due. Id. § 410.168(a). The hearing officer's decision is final absent an appeal. Id. § 410.169.

Any party may appeal the hearing officer's decision to a panel of the Texas Workers' Compensation Commission. TEX. LAB.CODE § 410.202. The appeals panel may affirm the hearing officer's decision, reverse and render a new decision, or reverse and remand to the hearing officer for further record development. Id. § 410.203. The aggrieved party may appeal the appeals panel's decision to the courts under a modified de novo review. See Garcia, 893 S.W.2d at 530.

Page 62

II

Stan Manasco injured his back at work on January 20, 1992. He filed a claim for workers' compensation and received temporary benefits for fourteen months. On October 23, 1992, Manasco's treating physician, Dr. Davis, certified that Manasco had reached maximum medical improvement and assigned him a thirty percent impairment rating. Lumbermens Mutual Casualty Company, the workers' compensation carrier for Manasco's employer, disputed the thirty percent impairment rating and requested that the Texas Workers' Compensation Commission designate a doctor to determine Manasco's rating. The Commission appointed Dr. Holmes, who eventually reported that Manasco had reached maximum medical improvement and had an impairment rating of seven percent. After the subsequent benefit review conference failed to resolve the dispute over Manasco's impairment rating, a contested case hearing was held on September 20, 1993. Manasco did not have counsel at the hearing, but relied on an ombudsman's services.

On September 22, 1993, the hearing officer found for Lumbermens, concluding that the seven percent impairment rating that Dr. Holmes--the Commission's designated doctor ¹--assigned had not been overcome by the great weight of contrary medical evidence. See TEX. LAB.CODE § 408.122(c)(report of the designated doctor has presumptive weight unless the great weight of the other medical evidence is to the contrary). When the contested case hearing occurred, no surgery had been recommended or approved. Manasco did not appeal the September 22, 1993 decision, and it became final by statute. See id. § 410.169.

Three months after that contested case hearing became final, Dr. Heilman--the neurosurgeon recommended by Dr. Holmes--recommended that Manasco have surgery. On January 26, 1994, Dr. Heilman operated on Manasco's back. Believing that his condition had worsened after the surgery, Manasco requested a second conference and hearing. Manasco contended that he had experienced a "substantial change of condition," under Texas Labor Code section 410.307, and that additional evidence should be considered on the issues of maximum medical improvement and impairment rating to increase his benefits. At the second contested case hearing on June 28, 1994, the hearing officer concluded that the prior determination of Manasco's impairment rating was final and could not be reopened. Manasco appealed to the Commission appeals panel, which affirmed the hearing officer's decision. Manasco then filed suit in district court, seeking judicial review of the Commission's decision. See TEX. LAB.CODE § 410.251.

In the district court, the parties filed cross motions for summary judgment. Manasco argued that his impairment rating and maximum medical improvement determinations should be modified based on evidence of his "substantial change of condition" under section 410.307. In opposition, Lumbermens contended that section 410.307 was an evidentiary tool that allowed additional medical evidence to be introduced at trial, rather than a substantive provision allowing a claimant's impairment rating to be reopened after a final...