Rodriguez v. Service Lloyds Ins. Co., 070199

• Decision Date: 09 September 1999
• Citation: 997 S.W.2d 248
• Parties: (Tex. 1999) ROSA RODRIGUEZ, PETITIONER v. SERVICE LLOYDS INSURANCE COMPANY, RESPONDENT NO. 98-0006
• Court: Texas Supreme Court

Page 248

997 S.W.2d 248 (Tex. 1999)

ROSA RODRIGUEZ, PETITIONER v. SERVICE LLOYDS INSURANCE COMPANY, RESPONDENT

NO. 98-0006

IN THE SUPREME COURT OF TEXAS

Argued November 17, 1998

Decided July 1, 1999

Rehearing Overruled September 9, 1999

ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] JUSTICE BAKER delivered the opinion of the Court, in which JUSTICE ENOCH, JUSTICE OWEN, JUSTICE ABBOTT, and JUSTICE GONZALES joined.

In this workers' compensation case we consider: (1) whether Texas Workers' Compensation Commission Rule 130.5(e), the "90-day Rule," is subject to any exceptions; and (2) the proper standard of judicial review for an injured worker's appeal of her impairment rating's finality under Rule 130.5(e). Rule 130.5(e) provides, "The first impairment rating assigned to an employee is considered final if the rating is not disputed within 90 days after the rating is assigned." 28 TEX. ADMIN. CODE 130.5(e). Both the trial court and the court of appeals dismissed Rosa Rodriguez's case, holding that the substantial evidence rule governs review of an impairment rating's finality under Rule 130.5(e) and that Rodriguez did not state a claim capable of review under that standard. We conclude that: (1) the correct standard of review is modified de novo; and (2) Rule 130.5(e) does not allow for exceptions, an issue neither the trial court nor the court of appeals reached because they applied a different standard of review. Accordingly, we reverse the court of appeals' judgment and remand the cause to the trial court for further proceedings consistent with this opinion.

I. FACTS

Rosa Rodriguez injured her back at work on July 20, 1993, and filed a workers' compensation claim. Three months later, her treating chiropractor certified that Rodriguez had reached maximum medical improvement and assigned her a four-percent impairment rating. The record is unclear about when the Commission notified Rodriguez of her impairment rating or when Rodriguez objected to it. Rodriguez, who neither speaks nor reads English, asserts that she had difficulty communicating with the Commission and understanding the significance of her assigned impairment rating.

Rodriguez asked for the Commission's permission to change treating doctors on January 31, 1994. The Commission approved her request. She then saw another chiropractor who recommended that she see a medical specialist, which she did. The orthopedic surgeon who next examined and tested Rodriguez's back, concluded that she needed surgery for "a severely ruptured disc with nerve root impingement." Rodriguez sought a second opinion from another doctor who, after examining Rodriguez, concluded that surgery was not necessary. When Rodriguez continued to experience back pain, she returned to the orthopedic surgeon, who found that her symptoms had worsened and again recommended surgery.

Based on these opinions, Rodriguez then returned to the Commission to change her initial assigned impairment rating. At a contested case hearing held on October 31, 1994, the various doctors who had examined her presented their conflicting opinion testimony. The hearing officer found against Rodriguez. The officer concluded that Rodriguez had not disputed her impairment rating within ninety days of its assignment, and, therefore, it had become final under the 90-day Rule. See 28 TEX. ADMIN. CODE 130.5(e). The hearing officer also found that no exception to the 90-day rule applied because: (1) there was no compelling medical evidence to show that the chiropractor misdiagnosed Rodriguez; and (2) there was insufficient evidence to establish that the original assessment was incorrect due to a significant error or misdiagnosis. Rodriguez appealed that decision to the Commission appeals panel, which affirmed.

Rodriguez next appealed to the district court. She alleged, among other things, that the appeals panel erred in affirming the hearing officer's conclusions about the impairment rating's finality because they were not supported by the evidence. She also alleged that the impairment rating was invalid because she had experienced a substantial change of condition. Rodriguez argued that the district court should review the Commission's findings under a de novo standard. Service Lloyds Insurance Company, her employer's insurance carrier, specially excepted, contending that Rodriguez's pleadings were defective. The district court sustained the special exceptions and ordered Rodriguez to replead and seek only relief reviewable under the substantial evidence rule.

Rodriguez amended her petition by adding the substantial evidence standard as an alternative standard, but did not delete her other claims. Upon Lloyds' motion, the district court struck Rodriguez's pleadings and dismissed her cause of action for not repleading according to its order and for not filing the Commission record for review. The court of appeals affirmed, agreeing that substantial evidence was the appropriate standard for judicial review. 961 S.W.2d 318.

II. STANDARD OF REVIEW

In 1989, the Legislature completely revised the Texas workers' compensation system. See Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 510 (Tex. 1995). It restructured the administrative process as well as judicial review of Commission decisions under that process. See TEX. LAB. CODE 401.001-506.001 (The Texas Workers' Compensation Act). Under the former system, courts reviewed final Commission decisions under a single de novo standard. See Garcia, 893 S.W.2d at 512. The 1989 legislation replaced that standard for judicial review with two different standards, substantial evidence and modified de novo. See TEX. LAB. CODE 410.255, 410.301; Garcia, 893 S.W.2d at 515. Under the current Act, the nature of the dispute determines the judicial remedy that applies.

If the dispute involves compensability or eligibility for or the amount of income or death benefits, a district court reviews the Commission appeals panel decision under a modified de novo standard. See TEX. LAB. CODE 410.301; see also Garcia, 893 S.W.2d at 515. The employee's county of residence usually determines which district court hears the appeal. See TEX. LAB. CODE 410.252. If the dispute concerns something other than compensability or eligibility for or the amount of income or death benefits, a party must appeal the final decision, if it is appealable at all, to the district court in Travis County under the Administrative Procedure Act for a substantial evidence review. See TEX. LAB. CODE 410.255; see also TEX. GOV'T CODE 2001.171-.178 (the Administrative Procedure Act).

Rodriguez argues that the modified de novo standard applies here because her impairment rating challenge necessarily affects her entitlement to income benefits. Rodriguez further contends that the court of appeals erred in dismissing her claim because her pleadings adequately stated a claim under this standard. Lloyds responds that the substantial evidence rule applies because the issue of the impairment rating's finality under Rule 130.5(e) is a procedural issue that does not directly touch on the substantive issue of benefits. The court of appeals agreed with Lloyds. It held that Rodriguez's challenge of her impairment rating's finality was reviewable under the substantial evidence rule because such a claim did not "concern compensability, her eligibility for benefits or the amount of income or death benefits." 961 S.W.2d at 321. We disagree. An impairment rating's finality directly affects eligibility for and the amount of benefits due to the employee.

An employee receives impairment income benefits according to the employee's impairment rating, which is the percentage of the whole body's permanent impairment. See TEX. LAB. CODE 401.011(24), 408.124. To determine the impairment rating, an examining doctor evaluates the permanent effect of the employee's injury under statutory guidelines. See TEX. LAB. CODE 408.124. The doctor expresses the rating as a percentage of permanent impairment to the whole body. See TEX. LAB. CODE 401.011(24), 408.124. The greater this percentage, the greater the amount the employee receives as impairment income benefits. See Garcia, 893 S.W.2d at 514. The impairment rating may also qualify an employee for supplemental income benefits, which provide long-term disability compensation. See TEX. LAB. CODE 408.142; see also Garcia, 893 S.W.2d at 514.

A doctor will not certify an impairment rating until the employee reaches "maximum medical improvement," the point at which the employee's injury will not materially improve with additional rest or treatment. See TEX. LAB. CODE 408.121. The date of maximum medical improvement is fixed when an examining doctor certifies that no further material recovery or lasting improvement can reasonably be anticipated. See TEX. LAB. CODE 401.011(30), 408.123. The Act presumes that maximum medical improvement will be reached not later than two years after income benefits begin to accrue. See TEX. LAB. CODE 401.011(30).

Until an employee reaches maximum medical improvement, he or she may receive temporary income benefits. See TEX. LAB. CODE 408.101-.102. These benefits are paid weekly to compensate for lost wages during the employee's convalescence. See Garcia, 893 S.W.2d at 513. Once an employee reaches maximum medical improvement, temporary income benefits end. See TEX. LAB. CODE 408.101(a), 408.102(a). Whether the injured employee receives any additional income benefits depends largely on the assigned impairment rating. See TEX. LAB. CODE 408.121(a), 408.142.

Any dispute that challenges an impairment rating's finality necessarily implicates the date of maximum medical improvement and the amount paid as temporary income benefits. This dispute may also impact the employee's eligibility for, and the calculation of, impairment income benefits and supplemental...