Texas Employers' Ins. Ass'n v. Haunschild

• Decision Date: 29 August 1975
• Docket Number: No. 8566,8566
• Citation: 527 S.W.2d 270
• Parties: TEXAS EMPLOYERS' INSURANCE ASSOCIATION, Appellant, v. Bob HAUNSCHILD, Appellee.
• Court: Texas Court of Appeals

Page 270

527 S.W.2d 270

TEXAS EMPLOYERS' INSURANCE ASSOCIATION, Appellant, v. Bob HAUNSCHILD, Appellee.

No. 8566.

Court of Civil Appeals of Texas, Amarillo.

Aug. 29, 1975.

Rehearing Denied Sept. 22, 1975.

Gibson, Ochsner, Adkins, Harlan & Hankins, S. Tom Morris, Amarillo, Vial, Hamilton, Koch, Tubb, Knox & Stradley, for appellant.

Charles H. Smith and C. L. Mike Schmidt, Jr., Dallas, for amicus curiae.

Edwards, Smith & Associates, Thomas S. Hoekstra, Amarillo, Thompson, Knight, Simmons & Bullion, David S. Kidder, Dallas, for amici curiae.

REYNOLDS, Justice.

In this workmen's compensation case the trial court, after disregarding jury findings that a prior compensable general injury contributed sixty-five percent to the workmen's incapacity following the general injury in suit, entered judgment awarding full compensation for the present incapacity. The sole question presented is whether, after the 1971 amendment to the Texas Workmen's Compensation Act, the insurance carrier's liability for a general injury incapacity is still reduced by the percentage of incapacity contributed by a prior compensable general injury. We hold that it is not. Affirmed.

The facts of the case may be stated briefly. From a November 10, 1972 fall during his employment by Armour & Co., Bob Haunschild received low back and neck injuries for which medical care and workmen's compensation benefits were provided by Texas Employers' Insurance Association. In April of 1973, Haunschild returned to work where, on July 10, 1973, he slipped while going down stairs and suffered injury. He received medical treatment which included two operations on his neck. He had not returned to work at the time of the trial in November of 1974.

The jury found that Haunschild's July 10, 1973 injury produced partial incapacity from July 12, 1973, through October 1, 1973, produced total incapacity beginning October 2, 1973, and ending January 28, 1975, and produced partial incapacity beginning January 29, 1975, and ending June 29, 1975. The jury found further that Haunschild's November 10, 1972 injury contributed sixty-five (65%) percent to his present incapacity.

T.E.I.A.'s motion for judgment on the verdict, the granting of which would have resulted in a judgment for $1,775.75, was denied. Haunschild's motions to disregard the jury's findings of contribution by his prior injury and for judgment on the remainder of the verdict were granted, the trial court entering judgment in Haunschild's favor for $5,073.47.

Prior to Haunschild's first injury, the legislature amended, effective September 1, 1971, Sections 12c and 12c--1 of Vernon's Ann.Civ.St. art. 8306, to read:

Sec. 12c. If an employee who has suffered a previous injury shall suffer a subsequent injury which results in a condition of incapacity to which both injuries or their effects have contributed, the association shall be liable for all compensation provided by this Act, but said association shall be reimbursed from the 'Second Injury Fund' as hereinafter described, to the extent that the previous injury contributes to the combined incapacity.

Sec. 12c--1. If an employee who has previously lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye, becomes permanently and totally incapacitated through the loss or loss of use of another member or organ, the association shall be liable for all compensation provided by this Act, not to exceed 401 weeks, but said association shall be reimbursed from the 'Second Injury Fund,' as hereinafter described, to the extent that its payment exceeds the amount due for the second injury as above set out. . . .

Thereafter, there came before the Supreme Court the case of Transport Insurance Company v. Mabra, 487 S.W.2d 704 (Tex.1972), which arose and was decided under the law existing before the amendment, presenting procedural and evidential issues bearing on the propriety of diminishing the claimant's recovery for general injury incapacity by the percentage of the incapacity contributed by a prior compensable general injury. In approving the diminution, the Court made passing reference to the 1971 amendment in this language:

. . . A statute, since amended, provided for a diminution of recovery because of a previous incapacity. Section 12c, Article 8306.

In order for there to be a reduction in the amount of the award under the old Section 12 of Article 8306 under which this case was tried, the previous injury must have been one which was compensable under the workmen's compensation law. St. Paul Fire & Marine Ins. Co. v. Murphree, 163 Tex. 534, 357 S.W.2d 744 (1962). . . .

Following the 1971 amendment, there appears to be only one appellate decision addressing the question before us. In Texas Employers' Insurance Association v. Creswell, 511 S.W.2d 68 (Tex.Civ.App.--Eastland 1974, writ ref'd n.r.e.), the court declared:

We hold, under the amended section 12c, that proof of a prior compensable injury will no longer reduce the recovery of a workman because of such prior injury.

Notwithstanding the Creswell declaration, T.E.I.A. contends that the 1971 amendment did not make it liable for all compensation provided for the combined incapacity produced by multiple compensable general injuries. T.E.I.A. initially suggests that Creswell merely states a holding and, since no attention whatsoever was given there to the problems of statutory construction, the holding is not entitled to weight and we should make an independent analysis to determine the scope of the 1971 amendment. The analysis is proper, T.E.I.A. submits, because by applying the rules for statutory construction it will reveal that the legislature, while imposing full liability on the carrier for the combined effects of specific injuries producing total and permanent incapacity, did not change the law which permitted the carrier a deduction for the incapacity contributed by a prior compensable general injury.

To the extent that the declaration in Creswell was not necessary to dispose of the appellate issues set out in the opinion, the declaration is probably dictum. It is proper, therefore, that we independently consider the question in the light of the various facets of T.E.I.A.'s contention.

A provision in the 1917 Texas Workmen's Compensation Act, codified as Vernon's Ann.Civ.St. art. 8306, and reproduced as marginal note 1, ¹ limited the workmen's compensation insurance carrier's liability, in the event the injured workman had suffered a condition of incapacity attributable to both a prior and a subsequent injury, to the compensation to which the workman would have been entitled had there been no previous injury. The plain terms of the proviso caused the court, in Gilmore v. Lumbermen's Reciprocal Ass'n., 292 S.W. 204 (Tex.Com.App.1927, jdgmt. adopted), to limit the carrier's liability to the compensation specified for the loss of sight in one eye resulting from the employment injury, although that injury, coupled with preemployment accidental loss of sight in the other eye, produced a condition defined in another provision of the Act as conclusive of total and permanent incapacity. The court rationalized that the legislature, choosing between encouraging employment of a person partially disabled from a prior injury or adequately compensating a partially disabled workman who becomes disabled from the combined effects of a prior and a subsequent injury, opted for the policy of encouraging employment by enacting Sec. 12c limiting liability of the carrier to the disability produced by the subsequent injury.

Gilmore settled the law that, in situations of specific injuries, Sec. 12c applied to limit the carrier's liability to the compensation for the second injury; however, after the pronouncement in Texas Employers' Insurance Ass'n. v. Clark, 23 S.W.2d 405 (Tex.Civ.App.--Eastland 1929, writ dism'd), that the word 'injury' is used in Sec. 12c to mean a compensative injury under the workmen's compensation law, Sec. 12c did not operate in cases of separate general injuries to reduce the carrier's liability to pay for all disability produced by the second injury unless the first injury was compensable. See Miears v. Industrial Accident Board, 149 Tex. 270, 275, 232 S.W.2d 671, 674 (1950). If the prior general injury was compensable, the operation of Sec. 12c entitled the carrier to proper jury issues determining the liability of the carrier only for the incapacity produced by the subsequent general injury. Accord, Sowell v. Travelers Insurance Co., 374 S.W.2d 412, 413 (Tex.1963). Thus, from the judicial construction given Sec. 12c by Gilmore and Clark, their progeny perpetuated the apparent conflict in applying the statute; Sec. 12c was applied literally to all cases of multiple specific injuries, but in cases of multiple general injuries it was not made applicable unless the prior (and later, a subsequent) injury was compensable.

In 1947, the legislature moved to correct the inadequacy of the compensation award without discouraging employment of the physically handicapped. As copied in marginal note 2, ² Sec. 12c was re-enacted with an addendum referring to the creation of a 'Second-Injury Fund' from which the employee who suffered a subsequent injury 'shall be compensated for the combined incapacity resulting from both injuries.' There was added Sec. 12c--1, reproduced as marginal note 3, ³ distinctly declaring that if an employee, having previously suffered a specific injury, becomes permanently and totally incapacitated as the result of another specific injury, the carrier is liable to the employee only for the compensation payable for the second specific injury, and the second-injury fund is liable to the employee for the remainder of the compensation due for the total permanent incapacity. The mechanics of the creation of the 'Second-Injury Fund' were set forth in a new Sec. 12c--2.

In speaking to the 1947 amendment in Miears v. Industrial Accident Board, supra, the Supreme...