Warnke v. Nabors Drilling USA, L.P.

• Decision Date: 25 August 2011
• Docket Number: No. 01–09–00734–CV.,01–09–00734–CV.
• Citation: 358 S.W.3d 338
• Parties: Robert Earl WARNKE, Appellant, v. NABORS DRILLING USA, L.P., NDUSA Holdings Corp., and Bruce Wilkinson, Appellees.
• Court: Texas Court of Appeals

358 S.W.3d 338

Robert Earl WARNKE, Appellant,

v.NABORS DRILLING USA, L.P., NDUSA Holdings Corp., and Bruce Wilkinson, Appellees.

No. 01–09–00734–CV.

Court of Appeals of Texas, Houston (1st Dist.).

Aug. 25, 2011.

Lynne Jurek Shannon, Thomas Joseph Smith, Galloway, Johnson, Tompkins, Burr & Smith, PC, Houston, TX, for Appellant.

Michael D. Farmer, Plummer & Farmer, Houston, TX, for Appellees.

Panel consists of Justices JENNINGS, HIGLEY, and BROWN.

OPINION ON REHEARING

HARVEY BROWN, Justice.

Appellees Nabors Drilling USA, L.P., NDUSA Holdings Corporation, and Bruce Wilkinson filed a motion for rehearing and a motion for en banc reconsideration of our opinion issued on April 7, 2011. We grant rehearing, deny as moot their motion for reconsideration en banc, withdraw our opinion and judgment, and issue this opinion.

Robert Earl Warnke filed negligence, fraud, and negligent misrepresentation claims against Nabors Drilling USA, L.P., NDUSA Holdings Corporation, and Bruce Wilkinson arising out of his workplace injury and his claim for workers' compensation.¹ The trial court granted a traditional summary judgment against Warnke disposing of all claims and all parties. Warnke contends the trial court erred in granting summary judgment because (1) Nabors and NDUSA Holdings failed to establish that they provided him with pre-injury notice of coverage and such notice is required for it to claim subscriber status under the Texas Workers' Compensation Act (the “Act”); (2) a genuine issue of material fact existed whether Wilkinson was an independent contractor and therefore covered under the Act's exclusive remedy provision; and (3) his claims for injuries arising from Nabors's alleged fraudulent and negligent misrepresentation constituted separate injuries from his on-the-job injury and fell outside the protection of the Act's exclusive remedy provision.

We affirm in part, reverse in part, and remand for further proceedings.

Background

In December 2006, Warnke suffered an on-the-job injury at Nabors's yard when a pipe connected by a co-worker, Bruce Wilkinson, came free and crushed his hand. In his affidavit, Warnke testified that his supervisor told him before his injury that he was not covered by workers' compensation insurance and that after his injury an employee in Nabors's human resources department, Brandon Cannady, denied Nabors's responsibility for Warnke's medical expenses. ² Warnke's wife testified by affidavit that Cannady told her that Warnke was not a Nabors employee and Nabors would not provide him workers' compensation coverage. Warnke also alleged that Nabors and NDUSA Holdings never provided him written notice of coverage under workers' compensation insurance before his injury. Eight months after the accident and about three months after filing suit, Warnke began receiving workers' compensation benefits from Nabors's workers' compensation carrier.

Warnke filed suit against Nabors for negligence, fraud, and negligent misrepresentation, against NDUSA Holdings for negligence, and against Wilkinson for negligence.³ In his original petition, Warnke claimed that he and Wilkinson were both employees of Nabors. He later amended his petition to plead in the alternative that Wilkinson was an independent contractor.

Nabors, NDUSA Holdings, and Wilkinson filed a traditional motion for summary judgment arguing that no genuine issue of material fact existed because the Act's exclusive remedy provision bars Warnke's recovery. Nabors, NDUSA Holdings, and Wilkinson argued that subscriber status does not depend on providing the employee with pre-injury notice of coverage. Nabors—the only defendant sued for fraud and negligent misrepresentation claims—also asserted that the exclusive remedy provision barred Warnke's fraud and negligent misrepresentation claims. Warnke responded that (1) Nabors and NDUSA Holdings were not subscribers because they failed to give Warnke notice of coverage and their insurance provider was not authorized to act in Texas; (2) a fact issue exists regarding whether Wilkinson was an independent contractor and therefore not covered by the exclusive remedy provision; and (3) his fraud and negligent misrepresentation claims arise from a separate injury from the on-the-job injury covered by the Act. The trial court granted summary judgment in favor of Nabors, NDUSA Holdings, and Wilkinson on all claims.

Summary Judgment Standard of Review

We review a trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). Under the traditional standard for summary judgment motions, the movant has the burden to show that no genuine issue of material fact exists and the trial court should grant judgment as a matter of law. Tex.R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). The motion must state the specific grounds relied upon for summary judgment. Tex.R. Civ. P. 166a(c). When reviewing a summary judgment motion, we take as true all evidence favorable to the nonmovant, and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Dorsett, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215. A defendant moving for traditional summary judgment must conclusively negate at least one essential element of each of the plaintiffs causes of action or conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997).

Exclusive Remedy Under the Workers' Compensation Act

The Act is the exclusive remedy for non-intentional, “work-related injuries” of an employee, and exempts the employer, its agents, and its employees from common-law liability claims based on negligence or gross negligence. See Tex. Lab.Code Ann. § 408.001(a) (West 2006); ⁴ Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex.1985). The exclusive remedy provision protects the employer in exchange for prompt remuneration to the employee who is relieved of the burden of proving the employer's negligence. Hulshouser v. Tex. Workers' Comp. Ins. Fund, 139 S.W.3d 789, 792 (Tex.App.-Dallas 2004, no pet.). The Act defines “injury” to mean, “damage or harm to the physical structure of the body and a disease or infection naturally resulting from the damage or harm.” Tex. Lab.Code Ann. § 401.011(26) (West Supp.2010).

The exclusive remedy provision is an affirmative defense that the defendant must plead and prove. See Exxon Corp. v. Perez, 842 S.W.2d 629, 630–31 (Tex.1992); AMS Const. Co. v. K.H.K. Scaffolding Houston, Inc., 357 S.W.3d 30, 43 (Tex.App.-Houston [1st Dist.] 2011, no pet.) (citing Pierce v. Holiday, 155 S.W.3d 676, 678 (Tex.App.-Texarkana 2005, no pet.)). To demonstrate that a common law claim is barred by the Act, the defendant must show that the injured worker was (1) its employee at the time of the work-related injury and (2) covered by workers' compensation insurance. See Garza v. Exel Logistics, Inc., 161 S.W.3d 473, 476–77 (Tex.2005); Martinez v. H.B. Zachry Co., 976 S.W.2d 746, 748 (Tex.App.-Houston [1st Dist.] 1998, pet. denied). Once these requirements are satisfied, the exclusive remedy provision is triggered and all employee claims of work-related negligence and gross negligence are barred. See Tex. Lab.Code Ann. § 408.001; see also Reed Tool, 689 S.W.2d at 406. Warnke does not challenge either of these elements of the exclusive remedy defense. He contends instead that there is another requirement that must be satisfied to prevail on this defense: pre-injury notice of coverage.

A. Notice and Subscriber Status

Warnke contends that Nabors is not entitled to the exclusive remedy defense unless it provides its employees with pre-injury notice of workers' compensation insurance coverage. He asserts that Nabors and NDUSA Holdings failed to give such notice, and thereby lost their subscriber status and the protection of the exclusive remedy provision. The Act requires employers to notify “each employee ... whether or not the employer has workers' compensation insurance coverage.” Tex. Lab.Code Ann. § 406.005 (West 2006). Failure to give notice constitutes an administrative violation punishable by a fine. See id. § 406.005(e); Wesby v. Act Pipe & Supply, Inc., 199 S.W.3d 614, 618 (Tex.App.-Dallas 2006, no pet.).

Courts in this state, including this court, have held that the exclusivity bar does not hinge on whether notice has been provided to the employee. See, e.g., Wesby, 199 S.W.3d at 618; see also Blazik v. Foley's, Inc., No. 01–96–01140–CV, 1998 WL 788848, at *3 (Tex.App.-Houston [1st Dist.] Nov. 12, 1998, no pet.) (mem. op., not designated for publication). Although Nabors provided no evidence to show it gave pre-injury coverage notice to Warnke, the Act and the exclusivity provision apply even without such notice.⁵

Nabors presented sufficient evidence otherwise to demonstrate subscriber status under the Act. Neither party contests Warnke's status as an employee at the time of his injury. Further, Nabors attached an affidavit from its insurance carrier's managing director stating that his company provided workers' compensation insurance to Nabors at the time of the accident. Nabors also attached the Texas Department of Insurance's certification of the carrier's authority to provide insurance in Texas. Nabors therefore satisfied its burden to demonstrate subscriber status and triggered the exclusive remedy provision of the Act. Accordingly, we hold that the exclusive remedy provision bars Warnke's common law negligence claims against Nabors and NDUSA Holdings for the on-the-job injury of his hand.

We overrule Warnke's complaint as to pre-injury notice and Nabors and NDUSA Holding's subscriber status.

B. Employee or Independent Contractor

Warnke next contends the Act's exclusive remedy provision does not apply to his negligence claim against Wilkinson because Wilkinson failed to...