Reyes v. Storage & Processors, Inc.

Citation995 S.W.2d 722
Decision Date21 April 1999
Docket NumberNo. 04-98-00334-CV,04-98-00334-CV
Parties(Tex.App.-San Antonio 1999) Ramon REYES, Appellant v. STORAGE & PROCESSORS, INC. and Leonel Guerrero, Appellees
CourtCourt of Appeals of Texas

Sitting: Phil Hardberger, Chief Justice, Catherine Stone, Justice, Sarah B. Duncan, Justice

REVERSED AND REMANDED

OPINION

Opinion by:Sarah B. Duncan, Justice

This appeal questions the enforceability of an agreement by which an employee of a non-subscriber waives his claims arising out of a workplace injury in exchange for certain but far more limited benefits than those provided by workers' compensation insurance. We hold the waiver violates the public policy expressed by the Texas Legislature in the Texas Workers Compensation Act and is therefore void and unenforceable.

FACTUAL AND PROCEDURAL BACKGROUND

Shortly after Ramon Reyes was hired by Storage and Processors, Inc. as a forklift operator, he enrolled in S&P's Occupational Accident Employee Welfare Benefit Plan. Reyes thus signed a document, written in Spanish, stating he had read and understood the rules and stipulations of the S&P Plan and, four days later, he signed the S&P Plan agreement, which states in relevant part:

This company does not have workers' compensation insurance coverage to protect you from damages because of work-related illness or injury. However, we do have an Occupational Accident Employee Welfare Benefit Plan that provides benefits to those employees who are injured on the job.

....

As a result of the Company not having workers' compensation insurance coverage, you may have certain rights under the common laws of Texas for damages arising out of work-related illness or injury. If, however, you choose to participate in the Company's Occupational Accident Employee Welfare Benefit Plan by requesting the benefits provided by the Plan, you hereby agree to accept the Plan benefits as the only benefits you are entitled to receive in the event of a work-related injury and to waive any and all other causes of action, claims, rights, and demands that you could make against the Company, its successors, assigns, employees, officers, directors, shareholders, agents and clients. Participation in the Company's Occupational Accident Employee Welfare Benefit Plan is not compulsory ....

....

By my signature below, I acknowledge that this non-subscriber program has been explained to me, and that I was given the opportunity to ask questions, have my questions answered, and to make comments. It was further explained to me that my employment and/or my continued employment was not conditional upon the execution of this Agreement, but that by my execution of this Agreement I am agreeing to comply with the terms of the Plan and this Agreement. I understand that participation in the Plan is not compulsory, and understanding that, I hereby agree to participate in the Plan and to receive the benefits provided to me by the Company through this Occupational Accident Employee Welfare Benefit Plan. I also understand that, by executing this Agreement, I have waived certain claims and rights as stated herein. Reyes signed an almost identical document again in November 1984.

Eighteen months after he was hired, Reyes was severely injured when his foot was run over and severed by a forklift driven by a coworker, Leonel Guerrero. Reyes' foot was reattached and over the next eighteen months, the S&P Plan paid to him or on his behalf $89,891.69 in medical benefits and $16,842.86 in wage replacement benefits. Before these benefits terminated, Reyes sued S&P and Guerrero for negligence. After the suit was filed, S&P's attorney demanded the suit be dismissed; in response, Reyes requested his benefits under the S&P Plan be discontinued. But he did not return or tender a return of any of the benefits he had already received.

S&P and Guerrero moved for summary judgment, contending Reyes waived his common law causes of action and subsequently ratified that waiver, and he is estopped from contending otherwise by his acceptance of benefits under the S&P Plan. The trial court granted summary judgment against Reyes, and he appealed.

STANDARD OF REVIEW

We review a summary judgment de novo and will therefore uphold a Rule 166a(c) summary judgment only if the summary judgment record establishes there is no genuine issue of material fact "and the movant is entitled to judgment as a matter of law on a ground set forth in the motion." Valores Corporativos, S.A. de C.V. v. McLane Co., 945 S.W.2d 160, 162 (Tex. App.-San Antonio 1997, writ denied); TEX. R. CIV. P. 166a(c). In determining whether a genuine issue of material fact exists, "we view as true all evidence favorable to the non-movant and indulge every reasonable inference, and resolve all doubts, in its favor." Valores, 945 S.W.2d at 162.

ADEQUACY OF REYES' BRIEF

Guerrero argues we must affirm the summary judgment because Reyes has neither brought forward a general Malooly1 point of error nor specifically challenged estoppel, one of the grounds upon which Guererro and S&P moved for summary judgment. We disagree.

Under the amended Texas Rules of Appellate Procedure, a brief "must state concisely all issues or points presented for review," TEX. R. APP. P. 38.1(e), and "contain a clear and concise argument for the contentions made." TEX. R. APP. P. 38.1(h). "The statement of an issue or point will be treated as covering every subsidiary question that is fairly included." TEX. R. APP. P. 38.1(e).

The requirements of Rules 38.1(e) and 38.1(h) are met in this case. Reyes' brief clearly states the issue presented for review2 and concisely argues estoppel cannot sustain the trial court's judgment.3 No more is required.

WAIVER, RATIFICATION, AND ESTOPPEL

Reyes first argues S&P and Guerrero have not conclusively established their affirmative defenses of waiver, ratification, and estoppel because the summary judgment evidence raises a material fact issue regarding whether he understood the waiver he signed sufficiently to be bound by it. While we agree Reyes' affidavit raises this issue of fact, we disagree it is material.

One who signs a contract "must be held to have known what words were used in the contract and to have known their meaning, and he must also be held to have known and fully comprehended the legal effect of the contract." Nguyen Ngoc Giao v. Smith & Lamm, P.C., 714 S.W.2d 144, 146 (Tex. App.-Houston [1st Dist.]1986, no writ). Illiteracy thus does not relieve a contracting party of the consequences of his agreement. Id.; Vera v. North Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex. App.-San Antonio Aug. 19, 1998, no pet.); Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 846 (Tex. App.-Houston [14th Dist.] 1996, writ denied). Indeed, "[a]bsent proof of mental incapacity, a person who signs a contract is presumed to have read and understood the contract, unless he was prevented from doing so by trick or artifice." Vera, at 17.

No summary judgment evidence suggests Reyes either lacked the mental capacity to contract or signed the waiver as a result of "trick or artifice." Accordingly his actual understanding of the effect of what he signed is immaterial. See id. Likewise immaterial is whether Reyes asked that his benefits be discontinued upon learning of the S&P Plan terms. Accordingly, if the agreement is enforceable, Reyes ratified it by accepting and retaining its substantial benefits. See Land Title Co. v. F. M. Stigler, Inc., 609 S.W.2d 754, 756-57 (Tex. 1980); Daniel v. Goesl, 161 Tex. 490, 341 S.W.2d 892, 895 (1960). Similar reasoning would foreclose Reyes' estoppel argument. See, e.g., Texas Oil & Gas Corp. v. Vela, 429 S.W.2d 866, 876 (Tex. 1968). In short, Reyes is bound by the waiver if it is enforceable.

SECTION 406.035

Reyes first argues the release is void and unenforceable under section 406.035 of the Texas Workers Compensation Act, which provides "an agreement by an employee to waive the employee's right to compensation is void" "[e]xcept as provided by this subtitle." TEX. LAB. CODE ANN. 406.035 (Vernon 1996). We disagree. Section 406.035 is plainly not intended to apply to agreements by the employees of non-subscribers. E.g., Martinez v. IBP, Inc., 961 S.W.2d 678, 682 (Tex. App.-Amarillo 1998, pet. denied).

EXPRESS NEGLIGENCE TEST

Reyes also argues the waiver is void because it fails the express negligence test. See, e.g., Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987). However, Reyes did not raise this issue in his response to the motions for summary judgment and therefore may not raise it on appeal. TEX. R. CIV. P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).

PUBLIC POLICY

Finally, Reyes argues the waiver is void because it violates the public policy expressed by the Texas Legislature in the Texas Workers' Compensation Act. With this argument, we agree.

Standard of Review

Whether an agreement violates public policy is a question of law, which we review de novo. See Roberts v. San Jacinto Shipbuilders, 198 S.W.2d 488, 491 (Tex. Civ. App.-Galveston 1946, writ ref'd n.r.e.) (citing Pierce v. Randolph, 12 Tex. 290 (1854)).

Discussion

"To recover damages at common law, an injured worker was required not only to establish that the employer's negligence proximately caused the injury, but also to avoid the defenses of contributory negligence, assumption of the risk, and fellow servant. ... [T]his combination of hurdles prevented recovery in a large majority of cases." Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 521 (Tex. 1995). Therefore, "to meet the needs of an increasingly industrialized society," the Texas Legislature enacted "[t]he Employers' Liability Act of 1913." Id. at 510. Under this act, employees injured in the course and scope of their employment...

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