Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-00-00370-CV

Texas General Indemnity Company, Appellant

v.

Texas Workers' Compensation Commission; Todd Brown in his Official Capacity

as Executive Director of the Texas Workers' Compensation

Commission; and Michael Macik, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT

NO. 96-06452, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING

Appellant, Texas General Indemnity Company ("TGI"), filed a declaratory judgment

action challenging the validity of an administrative rule of the Texas Workers' Compensation

Commission ("the Commission") in district court. Appellees, the Commission and Todd Brown,

former Executive Director of the Commission (collectively "TWCC"), filed a plea to the

jurisdiction; TGI and TWCC both filed cross motions for summary judgment. The district court

granted TWCC's plea to the jurisdiction, dismissing the cause, and conditionally rendered

judgment denying TGI's motion for summary judgment and granting TWCC's motion for

summary judgment. TGI appeals the district court's dismissal and judgment. We will affirm.

BACKGROUND

Michael Macik ("Macik") was injured while working for Amoco Texas Refining

Company and pursued a claim for workers' compensation benefits from TGI. The commission

hearings division held a hearing to determine whether Macik was entitled to impairment income

benefits despite not having sustained any disability as a result of his injury. A commission hearing

officer found that Macik was entitled to impairment income benefits. This finding was based upon

a prior commission appeals panel decision in which the panel upheld the validity of section 130.8

of the Texas Administrative Code ("Rule 130.8"), which requires a carrier to initiate payments of

impairment income benefits to an injured employee regardless of whether the employee has

suffered seven or more days of disability. See 28 Tex. Admin. Code § 130.8 (2000). The

commission appeals panel affirmed the hearing officer's decision requiring TGI to pay impairment

income benefits to Macik.

TGI appealed the panel's decision in Galveston County district court. Along with

its appeal, TGI simultaneously filed a declaratory judgment action in Travis County challenging

the validity of Rule 130.8. TWCC filed a plea to the jurisdiction in the Travis County district

court, asserting that a declaratory judgment cannot be maintained alongside an administrative

appeal and that TGI could not challenge the Commission's rule in light of the pending judicial

review of Macik's claim in Galveston County. TGI and TWCC filed cross motions for summary

judgment on the merits of the validity of Rule 130.8. The Travis County district court granted

TWCC's plea to the jurisdiction and dismissed TGI's suit in Travis County, having determined

that it did not have jurisdiction and that the issues should instead be litigated in Galveston County

district court. The court nevertheless proceeded to conditionally deny TGI's motion for summary

judgment and grant TWCC's motion for summary judgment. TGI now appeals from the district

court's dismissal and judgment.

DISCUSSION In its first point of error, TGI argues that the Travis County district court erred in

dismissing TGI's declaratory judgment action because jurisdiction and venue to hear a challenge

to an administrative agency rule is mandatory in Travis County. In support of its argument, TGI

relies on section 2001.038 of the Texas Administrative Procedure Act ("APA"), which provides

a statutorily prescribed method for challenging the validity or applicability of an agency rule "if

it is alleged that the rule or its threatened application interferes with or impairs, or threatens to

interfere with or impair, a legal right or privilege of the plaintiff." Tex. Gov't Code Ann.

§ 2001.038 (a) (West 2000). Section 2001.038 of the APA mandates that "[t]he action may be

brought only in a Travis County district court." Id . § 2001.038(b) (emphasis added). We agree

with TGI that the statute creates mandatory jurisdiction in Travis County for challenging the

validity of an agency rule. Cf. Grounds v. Tolar Indep. Sch. Dist. , 707 S.W.2d 889, 892 (Tex.

1986) (holding that similar language in Texas Education Code created mandatory jurisdiction in

Travis County); Rowden v. Texas Catastrophe Prop. Ins. Ass'n , 677 S.W.2d 83, 88 (Tex.

App.--Corpus Christi 1984, writ ref'd n.r.e.) (holding that statutory provision of Texas Insurance

Code naming Travis County as place of appeal was jurisdictional, and not merely permissive,

venue provision).

The Travis County district court could therefore have properly maintained TGI's

declaratory judgment action challenging the validity of Rule 130.8 while the Galveston County

district court entertained TGI's appeal of the commission appeals panel decision. However, the

district court's dismissal was not erroneous in light of previous litigation involving TGI. At the

time TGI filed its suit for declaratory judgment in the present case in Travis County district court,

it had already received a judicial declaration from a sister court of appeals that impairment income

benefits are payable even without disability, and that the Commission had not exceeded its

authority in promulgating Rule 130.8. See Texas Gen. Indem. Co. v. Eisler , 981 S.W.2d 744

(Tex. App.--Houston [1st Dist.] 1998, no pet. h.) (motion for extension filed).

In 1994, TGI filed suit in Galveston County district court for judicial review of a

Commission decision ordering TGI to pay impairment income benefits to Charles Eisler ("Eisler"),

another Amoco Company employee. As in the present case, TGI simultaneously filed suit in

Travis County seeking a declaratory judgment that Rule 130.8 was invalid. Eisler filed a motion

to transfer venue in the Travis County suit, and the Travis County district court granted the

motion, transferred the cause to Galveston County, and consolidated the Travis County case with

the Galveston County case. Id . at 745. The Eisler case in Galveston County subsequently

proceeded to trial on the consolidated issues; TGI lost on both issues and appealed to the First

Court of Appeals. Id . The court of appeals affirmed the Galveston County district court's order,

holding (1) that Eisler was eligible for impairment income benefits despite his not having been

disabled for at least seven days, and (2) that the Commission did not exceed its rulemaking

authority by enacting Rule 130.8. Id .

Because the issues of whether impairment income benefits may be paid in the

absence of a disability lasting for at least one week and whether the Commission exceeded its

authority in enacting Rule 130.8 have already been decided as to these parties, TGI is barred by

the doctrine of res judicata from relitigating these issues. Res judicata is the generic term for a

group of related concepts concerning the conclusive effects given final judgments. Barr v.

Resolution Trust Corp. , 837 S.W.2d 627, 628 (Tex. 1992). The two principle categories

encompassed by this doctrine are (1) claim preclusion (also known as res judicata), and (2) issue

preclusion (also known as collateral estoppel). Id. Claim preclusion prevents the relitigation of

a claim or cause of action that has been finally adjudicated, as well as related matters that, with

the use of diligence, should have been litigated in the prior suit. Id . The elements of claim

preclusion include: a prior final judgment on the merits by a court of competent jurisdiction;

identity of parties or those in privity with them; and a second action based on the same claims as

were raised or could have been raised in the first action. Amstadt v. United States Brass Corp. ,

919 S.W.2d 644, 652 (Tex. 1996).

Collateral estoppel, or issue preclusion, prevents relitigation of particular issues

already resolved in a prior suit. Barr , 837 S.W.2d at 628 . Defendants urge defensive collateral

estoppel to prevent relitigation by a plaintiff of issues previously litigated and lost by the plaintiff

against another defendant. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc. , 962 S.W.2d

507, 519 (Tex. 1998) (citing Parklane Hosiery Co. v. Shore , 439 U.S. 322, 329 (1979)). The

touchstone of the doctrine of collateral estoppel, in the sense of issue preclusion, is that a party

is entitled to only one full and fair opportunity to litigate the issue in question. Root v. Brodhead ,

854 S.W.2d 706, 709 (Tex. App.--Austin 1993, no writ).

An unpleaded affirmative defense, such as res judicata, may serve as the basis for

summary judgment when it is raised in a summary judgment motion, and the opposing party does

not object to the lack of an affirmative pleading in either its written response or before the

rendition of judgment. Roark v. Stallworth Oil & Gas, Inc. , 813 S.W.2d 492, 494 (Tex. 1991).

TWCC's motion for summary judgment invoked collateral estoppel, under the broad doctrine of

res judicata, to prevent TGI from relitigating the identical issue TGI had lost in the Eisler case.

In its motion for summary judgment, TWCC stated that "[t]he Houston Court of Appeals

addressed the exact same issue raised by Plaintiff in [ Eisler ] . . . [t]his decision is or should be res

judicata on this issue." (Emphasis added.) TGI does not assert it has not had a full and fair

opportunity to litigate the issues in question. Rather, it argues that the issue of the validity of the

Commission's promulgation of Rule 130.8 was litigated in the wrong forum , that the Galveston

Court lacked jurisdiction to hear TGI's challenge to the validity of a Commission rule, that such

a rule can only be challenged in a Travis County district court, and that TGI is therefore entitled

to have this question again decided by a Travis County district court.

As stated, we believe that a challenge to an agency rule should, under section

2001.038 of the APA, be brought in a Travis County district court. See Tex. Gov't Code Ann.

§ 2001.038 (b). While the declaratory judgment portion of the Eisler case could properly have

been heard in the Travis County district court, instead of being transferred to the Galveston

County district court and consolidated with the case there pending, the fact remains that the case

was transferred; the Galveston County district court proceeded to judgment on the issue of Rule

130.8's validity, and the First Court of Appeals subsequently affirmed the judgment of the

Galveston County court. TGI effectively accepted the court of appeals' decision by taking no

further action to contest that decision. Although this Court is not bound to follow the holding of

the Eisler decision, the parties themselves are barred from relitigating the issues raised therein.

The First Court of Appeals decided the issue of the validity of the Commission's promulgation of

Rule 130.8 adversely to TGI; TGI cannot attempt to obtain a more favorable judgment regarding

the very same issue merely by raising it before this Court. We overrule TGI's first point of error.

We note that this appeal comes to us in an unusual posture. The trial court

dismissed the cause for lack of jurisdiction; nevertheless, the trial court conditionally ruled upon

the parties' competing motions for summary judgment in the event it was held to be in error for

dismissing the cause. For the same reason, we consider TGI's issue regarding the validity of Rule

130.8. In its second point of error, TGI argues that the district court erred in denying TGI's

motion for summary judgment and granting TWCC's motion for summary judgment on the basis

that Rule 130.8 is not contrary to section 408.082 of the Labor Code and is therefore a valid

exercise of the Commission's rulemaking authority under the APA.

When both parties move for summary judgment and the district court grants one

motion and denies the other, the unsuccessful party may appeal both the prevailing party's motion

as well as the denial of its own. Holmes v. Morales , 924 S.W.2d 920, 922 (Tex. 1996). In such

a situation, we review the summary judgment evidence presented by both sides and determine all

questions presented. Commissioners Court v. Agan , 940 S.W.2d 77, 81 (Tex. 1997). The parties

to the present case do not dispute any facts. The only question before us is whether Rule 130.8

conflicts with the Labor Code. In resolving this issue, we are called upon to interpret provisions

of both the Labor Code and the Texas Administrative Code. Because the interpretation of statutes

is a question of law, we review the district court's decision de novo . Mitchell Energy Corp. v.

Ashworth , 943 S.W.2d 436, 437 (Tex. 1997).

There are four types of benefits available to injured workers under the Texas

Workers' Compensation Act: medical, income, death, and burial. Tex. Lab. Code Ann.

§ 401.011 (5) (West Supp. 2001). Within the category of income benefits, there are four specific

levels or tiers of income benefits: (1) temporary income benefits; (2) impairment income benefits;

(3) supplemental income benefits; and (4) lifetime benefits. See generally id . §§ 408.081-.162

(West 1996 & Supp. 2001). These four types of income benefits are distinct from one another.

See Texas Workers' Comp. Comm'n v. Garcia , 893 S.W.2d 504, 513 (Tex. 1995); Eisler , 981

S.W.2d at 747 . Each type of income benefit is discussed in a separate section of the statute. See

Tex. Lab. Code Ann. § 408.101 -.162 (West 1996 & Supp. 2001).

The various benefits have different requirements for eligibility and compensate for

different losses. As the supreme court explained in Garcia , "Temporary income benefits

compensate for lost wages while an injured employee is convalescing." Garcia , 893 S.W.2d at

513 . They accrue when an employee suffers a disability and continue until "maximum medical

improvement." Id .; Tex. Lab. Code Ann. § 408.101 , .102 (West 1996). Impairment income

benefits, on the other hand, are intended to compensate for the impairment itself, and thus are

payable without regard to post-injury wages or wage earning capacity. Garcia , 893 S.W.2d at

514 . Section 408.121 of the Labor Code details when entitlement to such benefits accrue as

follows:

(a) An employee's entitlement to impairment income benefits begins on the day

after the date the employee reaches maximum medical improvement . . . .

Tex. Lab. Code Ann. § 408.121 (West 1996). The Labor Code defines "maximum medical

improvement" as the earlier of: (A) the earliest date after which, based on reasonable medical

probability, further material recovery from or lasting improvement to an injury can no longer

reasonably be anticipated, or (B) the expiration of 104 weeks from the date on which income

benefits begin to accrue. Id . § 401.011(30) (West Supp. 2001). Eligibility for impairment income

benefits therefore does not depend on whether the employee suffers a disability, but instead on

whether the employee is left with an impairment after reaching maximum medical improvement.

Where language in a statute is unambiguous, we must seek the intent of the

legislature as found in the plain and common meaning of the words and terms used. Monsanto

Co. v. Cornerstones Mun. Util. Dist. , 865 S.W.2d 937, 939 (Tex. 1993) (citing Moreno v.

Sterling Drug, Inc. , 787 S.W.2d 348, 352 (Tex. 1990)). Strained or narrow construction of the

workers' compensation laws that deny the employee benefits are improper. Kroger Co. v. Keng ,

976 S.W.2d 882, 890 (Tex. App.--Tyler 1998), aff'd , 23 S.W.3d 347 (Tex. 2000). The plain

language of the Workers' Compensation Act evinces the intent of the legislature that an injured

employee who reaches maximum medical improvement be entitled to impairment income benefits

whether or not the employee has suffered a disability for at least a week. This conclusion is

supported by the liberal construction we apply to workers' compensation legislation "to carry out

its evident purpose of compensating injured workers and their dependents." Albertson's, Inc. v.

Sinclair , 984 S.W.2d 958, 961 (Tex. 1999).

In order to implement and enforce workers' compensation legislation, the legislature

has authorized the Commission to adopt rules as necessary. Duenas v. Garland Indep. Sch. Dist. ,

961 S.W.2d 19, 23 (Tex. App.--Dallas 1996, writ denied); see Tex. Lab. Code Ann. § 402.061

(West 1996). As authorized, the Commission has adopted rules of practice and procedure.

Duenas , 961 S.W.2d at 23 ; see 28 Tex. Admin. Code §§ 41.1-181.1 (2000). One such rule is

Rule 130.8, which in relevant part, reads as follows:

(a) Impairment income benefits accrue on the day after the injured employee

reaches maximum medical improvement, regardless of whether the employee

has suffered seven or more days of disability.

28 Tex. Admin. Code § 130.8 (a). The text of an administrative rule must be construed under the

same principles as if it were a statute. Gulf States Utils. Co. v. Public Util. Comm'n , 784 S.W.2d

519, 528 (Tex. App.--Austin 1990), aff'd , 809 S.W.2d 201 (Tex. 1991). We bear in mind that

an administrative agency unquestionably has the power to interpret its own rules, and that its

interpretation is entitled to great weight and deference by a court called upon to interpret or apply

such rules. Id . at 527 n.5. The agency's construction of its rule is controlling unless it is plainly

erroneous or inconsistent. Id . An agency rule is furthermore presumed to be valid, and the party

challenging the rule has the burden to show the agency did not have the authority to promulgate

it. Texas Home Mgmt., Inc. v. Texas Dep't of Mental Health & Mental Retardation , 953 S.W.2d

1, 3 (Tex. App.--Austin 1997, pet. denied).

TGI argues that Rule 130.8, in granting entitlement to impairment income benefits

"regardless of whether the employee has suffered seven or more days of disability," conflicts with

Labor Code section 408.082, which states that income benefits will not be paid unless disability

exists for at least seven days. See Tex. Lab. Code Ann. § 408.082 . Because section 408.082 is

entitled "Income Benefits in General," TGI concludes that the minimum requirement of at least one

week disability applies to all forms of income benefits, including impairment income benefits.

TGI's interpretation, however, focuses on the relationship of Rule 130.8 to a general provision

of the statute, section 408.082, while ignoring section 408.121, the specific provision governing

impairment income benefits.

When two sections of a statute address a similar subject matter and a general

provision can be read to conflict with a more specific provision, "the general provision is

controlled or limited by the special provision." GMC Superior Trucks, Inc. v. Irving Bank & Trust

Co. , 463 S.W.2d 274, 276 (Tex. Civ. App.--Waco 1971, no writ); accord City of Dallas v.

Mitchell , 870 S.W.2d 21, 23 (Tex. 1994). In such circumstances, the special provision is

regarded as though it were an exception or proviso, removing something from the operation of the

general law. Trinity Universal Ins. Co. v. McLaughlin , 373 S.W.2d 66, 69 (Tex. Civ.

App.--Austin 1963, writ ref'd n.r.e.). Although the general provision governing eligibility for

income benefits, section 408.082, states that an injured worker must have a disability for at least

one week before benefits are paid, the Workers' Compensation Act contains a specific provision ,

section 408.121, which governs eligibility for impairment income benefits. Section 408.121 states

that an employee's entitlement for impairment income benefits begins on the day after the

employee reaches maximum medical improvement; this provision makes no mention of disability.

See Tex. Lab. Code Ann. § 408.121 . Section 408.121, as a specific provision, therefore acts as

an exception to section 408.082's requirement that an injured employee have suffered at least a

week of disability before benefits accrue; in the case of impairment income benefits, an

employee's entitlement does not depend on disability.

We agree with the Eisler court and the Commission that Rule 130.8 relates to

section 408.121, not 408.082. Eisler , 981 S.W.2d at 747 ; Appellant , 1994 WL 445791 (Texas

Workers' Comp. Comm'n Appeals Panel Aug. 11, 1994). Read in conjunction with section

408.121, Rule 130.8 implements the intent of the legislature, as evinced by the plain language of

section 408.121, that an injured employee is entitled to impairment income benefits after reaching

maximum medical improvement, regardless of whether the employee was disabled for at least

seven days. As such, Rule 130.8 is a valid exercise of the Commission's rulemaking authority.

We overrule TGI's second point of error.

CONCLUSION

We affirm the district court's dismissal; if, however, we are in error, we determine

that Rule 130.8 is a valid exercise of the Commission's rulemaking authority and that such rule

is not contrary to Texas Labor Code section 408.082, and we accordingly affirm the district

court's judgment on those grounds.

Marilyn Aboussie, Chief Justice

Before Chief Justice Aboussie, Justices B. A. Smith and Patterson

Affirmed

Filed: December 21, 2000

Publish

ment, regardless of whether the employee

has suffered seven or more days of disability.

28 Tex. Admin. Code § 130.8 (a). The text of an administrative rule must be construed under the

same principles as if it were a statute. Gulf States Utils. Co. v. Public Util. Comm'n , 784 S.W.2d

519, 528 (Tex. App.--Austin 1990), aff'd , 809 S.W.2d 201 (Tex. 1991). We bear in mind that

an administrative agency unquestionably has the power to interpret its own rules, and that its

interpretation is entitled to great weight and deference by a court called upon to interpret or apply

such rules. Id . at 527 n.5. The agency's construction of its rule is controlling unless it is plainly

erroneous or inconsistent. Id . An agency rule is furthermore presumed to be valid, and the party

challenging the rule has the burden to show the agency did not have the authority to promulgate

it. Texas Home Mgmt., Inc. v. Texas Dep't of Mental Health & Mental Retardation , 953 S.W.2d

1, 3 (Tex. App.--Austin 1997, pet. denied).

TGI argues that Rule 130.8, in granting entitlement to impairment income benefits

"regardless of whether