in Re iWORKS Personnel, Inc., Luis Trevino, and Haydee Gutierrez

ACCEPTED

01-15-00235-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

3/13/2015 8:34:01 PM

01-15-00235-CV CHRISTOPHER PRINE

CLERK

Local Rule Notice of and Assignment

of Related Case in Original Proceedings

FILED IN

As required by the Local Rules Relating to Assignment of 1stRelated

COURT OF APPEALS

Cases to

HOUSTON, TEXAS

and Transfers of Related Cases between the First and Fourteenth Courts of

3/13/2015 8:34:01 PM

Appeals, I certify that the following related appeal or original proceeding has been

CHRISTOPHER A. PRINE

previously filed in either the First Court of Appeals: Clerk

Guillory v. Seaton, LLC d/b/a Staff Management

Appellate Case No. 01-14-00379-CV

Trial Case No. 2012-61407A, 113th District Court, Harris County, Texas

Respectfully submitted,

/s/ David N. Anderson

DAVID N. ANDERSON

TBN: 00797951

THE ANDERSON LAW FIRM

4309 Yoakum

Houston, TX 77006

(713) 521-6563 - Telephone

(888) 824-5624 – Fax

danderson@lodna.net

FILED IN

st

1 COURT OF APPEALS

HOUSTON, TX

MAR 13, 2015 01-15-00235-CV

CHRISTOPHER A. PRINE,

CLERK

No. __________________

IN THE COURT OF APPEALS

FOR THE FIRST DISTRICT OF TEXAS

In re IWORKS PERSONNEL, INC.,

LUIS TREVINO, AND HAYDEE GUTIERREZ,

Relators

Original Proceeding on Petition for Writ of Mandamus

From the 113th District Court, Harris County, Texas

Honorable Michael Landrum, Judge Presiding, Respondent

Cause No. 2012-61407

PETITION FOR WRIT OF MANDAMUS

DAVID N. ANDERSON

TBN: 00797951

THE ANDERSON LAW FIRM

4309 Yoakum

Houston, TX 77006

(713) 521-6563 - Telephone

(888) 824-5624 – Fax

danderson@lodna.net

ATTORNEY FOR DEFENDANTS

IWORKS PERSONNEL, INC.,

LUIS TREVINO, and

HAYDEE GUTIERREZ

ORAL ARGUMENT REQUESTED

Identity of Parties and Counsel

Relators iWORKS Personnel, Inc., Luis Trevino, and

Haydee Gutierrez

Counsel for Relators David N. Anderson

Texas Bar No. 00797951

THE ANDERSON LAW FIRM

4309 Yoakum

Houston, TX 77006

(713) 521-6563 - Telephone

(888) 824-5624 – Fax

danderson@lodna.net

Respondent The Honorable Michael Landrum

113th Judicial District Court

Harris County Civil Courthouse

201 Caroline, 10th Floor

Houston, TX 77002

(713) 368-6113 – Telephone

Real Parties in Interest Mose Guillory and Mary Guillory

Counsel forReal Party in Interest Bradford J. Gilde

Texas Bar No. 24045941

bjg@gildelawfirm.com

GILDE LAW FIRM

55 Waugh, Suite 850

Houston, TX 77007

(281) 973-2772 – Telephone

(281) 973-2771 – Fax

Co-Defendant / Cross-Defendant Waste Management, Inc.

Counsel for Co-Defendant / B. Lee Wertz, Jr.

Cross-Defendant Texas Bar No. 00797796

lwertz@munsch.com

MUNSCH, HARDT, KOPF, AND HARR, P.C

700 Milam Street, Suite 2700

Houston, Texas 77002-2806

(713) 222-1470– Telephone

(713) 222-1475– Fax

ii

Table of Contents

Identity of Parties and Counsel ......................................................................... ii

Table of Contents ............................................................................................. iii

Table of Authorities ...........................................................................................v

Cases ......................................................................................................v

Statutes .................................................................................................. vi

Other Authorities ................................................................................... vii

Rules ..................................................................................................... vii

Regulations ........................................................................................... vii

I. Statement of the Case................................................................................... 2

III. Issue Presented .......................................................................................... 4

Did the trial court abuse its discretion when it refused to dismiss claims

over which it has no subject matter jurisdiction because the Division

of Worker’s Compensation has exclusive jurisdiction and Plaintiff has

not exhausted his administrative remedies? ............................................... 4

IV. Statement of Facts ...................................................................................... 4

V. Summary of Argument ................................................................................. 6

VI. Standard of Review..................................................................................... 7

VII. Argument ................................................................................................... 8

A. The trial court does not have subject matter jurisdiction and any judgment

it renders is void as a matter of law. ........................................................ 8

B. The Act demonstrates the legislature’s intent that the Act provide the

exclusive remedy for on-the-job injuries. ............................................... 10

C. Through its broad rule making and enforcement provisions, the Act

empowers the DWC to resolve disputes, enforce compliance, and

punish offenders. ................................................................................... 13

D. Real Party’s failure to exhaust his administrative remedies under the

Act precludes the trial court’s exercise of jurisdiction over this matter. . 16

1. Real Party consciously chose to circumvent the Act in pursuit of

common-law remedies for his work-place injury. ................................. 16

2. The laws embodied in the Act and the rules promulgated by the DWC

mandate that iWORKS policy was in effect on the date that Real Party

was injured at work. ............................................................................. 19

E. The DWC has exclusive jurisdiction to determine coverage. .................. 28

iii

F. The newly released Crawford opinion confirms the Court’s prior findings

that it is the intent of the legislature that the DWC have exclusive

jurisdiction out of work-place injury claims and that even artful pleadings

will not let Plaintiff’s recast their claims outside of the purview of the Act.

............................................................................................................... 34

VIII. Conclusion ............................................................................................. 37

IX. Prayer ....................................................................................................... 39

Certificate of Service ...................................................................................... 40

Verification and Certificate of Compliance ..................................................... 41

Appendix ........................................................................................................ 42

iv

Table of Authorities

Cases

Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988) ........ 10, 14

Arranda v. Ins. Co. of North Amer., 748 S.W.2d 210 (Tex. 1988)................. 11, 16

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000) ............... 7, 9

Cain v. Bain, 709 S.W.2d 175 (Tex. 1986 ........................................................... 33

Carr v. Carroll Company, 646 S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd

n.r.e.) ................................................................................................................ 32

Carroll v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010) ............................................. 9

Cash Am. Int’l., Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000)........................... 17

City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2014, per curium) . 9, 17, 18

County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002) ....................... 7, 8

Cunningham Lindsey Claims Mgmt. v. Snyder, 291 S.W.3d 472, 477 (Tex.App.—

Houston [14th Dist.] 2009, pet. denied) ............................................................ 18

Dubai Petrol. Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000) ....................................... 9

Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 453 (Tex., 2009) ......... 20

Gonzales v. Cigna Ins. Co. of Tex, 924 S.W.2d 183, 184-87 (Tex.App.—San

Antonio 1996, write denied) ............................................................................. 36

Houston Gen. Ins. Co. v. Ass’n Cas. ins. Co., 977 S.W.3d 634, 636 (Tex.App.—

Tyler 1998, no pet.) .......................................................................................... 31

Houston Gen. Ins. Co. v. Association Cas. Ins. Co., 972 S.W.2d 634, 636

(Tex.App.—Tyler 1998, no pet.) ....................................................................... 36

Huffman v. S. Underwriters, 133 Tex. 354, 128 S.W.2d 4, 6 (1939) ................... 20

Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139 S.W.3d 789, 792

(Tex. App.—Dallas 2004, no pet.). ................................................................... 11

In Re Crawford, No. 14-0256 (Tex. February 27, 2015) (per curiam) ...... 11, 37-39

In re Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004). ........................................ 4

In Re Liberty Ins. Corp., 321 S.W.3d 630 (Tex.App.—Houston [14th Dist.] 2010)

(orig. proceeding) ............................................................................................. 10

In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327 329 (Tex. 2009) ................. 4, 40

In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig.

proceeding) (per curiam) .............................................................................. 4, 10

In re Liberty Mutual Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009).................... 3

In Re Mid-Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex.App.—Houston

[1st Dist] 2012) (orig. proceeding) ..................................................................... 15

In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex. 2008) .......................... 11, 15, 22

In Re Sw. Bell Tel. Co., 235 S.W.3d 619, 624 (Tex. 2007) ................................... 4

In Re Tex. Mut. Ins. Co. ...................................................................................... 32

In Re United Servs. Auto Ass’n, 307 S.W.3d 299, 209 (Tex. 2010)...................... 9

In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 306 (Tex.2010) ..................... 10

v

Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747 (Tex.App.—

Houston [14th Dist.] 2005, no pet.) ................................................................... 31

Liberty Mut. Ins. Co. v. Adcock, 412, S.W.3d 492, 495 (Tex. 2013) ................... 14

Millers' Mut. Cas. Co. v. Hoover, 235 S.W. 863, 864 (Tex. Comm'n App.1921,

judgm't adopted) .............................................................................................. 22

Morales v. Liberty Mut. Sinc. Co., 241 S.W.3d 514 (Tex. 2007)....................... 31, 33

Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 805 (Tex. 1989). ...... 8

Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238 (Tex. 2012) ...... 20

Richmond v. L. D. Brinkman & Co. (Texas) Inc., 36 S.W.3d 903 (Tex. App.-Dallas

2001, pet. denied) ............................................................................................ 33

Saenz v. Fidelity & Guaranty Insurance Underwriters ........................................ 15

Scwartz v. Ins. Co. of Pa. ...................................................................................... 7

Southern Sur. Co. v. Inabnit, 1 S.W.2d 412, 413-414 (Tex.Civ.App.-Eastland

1927, no writ) ................................................................................................... 22

Subaru of Am. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) 15

Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). ...... 7

Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004) ........ 7

Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999) ............................ 7

Tex. educ. Agency v. Cypress-Fairbanks I.S.D., 830 S.w.2d 88, 90 (Tex. 1992) 18

Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 344 (Tex. 2012) ........... 16, 38, 39

Tex. Worker’s Comp. Comm’n v. Garcia, 893 S.W.2d 504, 517 n.15 (Tex. 1995) 9

Texas Workers’ Compensation Insurance Fund v. DEL Industrial, Inc., 35 S.W.3d

591 (Tex. 2000) ................................................................................................ 32

U.S. Fid. & Guar. Co. v. Goudeau, 272 S.W.3d 603, 610 (Tex. 2008) ............... 26

Waco ISD v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000) ....................................... 10

Statutes1

§ 91.001, et seq. .................................................................................................. 29

§ 93.004 .............................................................................................................. 29

§§ 401.001 – 451.003 ........................................................................................... 1

§ 401.011 ............................................................................................................ 32

§ 401.012 ............................................................................................................ 32

§ 401.013 ............................................................................................................ 36

§ 402.001 ................................................................................................ 10, 21, 34

§ 402.00111 ........................................................................................................ 21

§ 402.00114 ........................................................................................................ 35

§ 402.00117 ........................................................................................................ 21

§ 402.061 ............................................................................................................ 21

§ 406.002 ............................................................................................................ 21

§ 406.008 ............................................................................................................ 26

1 All cites are to the Texas Labor Code.

vi

§ 406.031 ............................................................................................................ 32

§ 406.032 ............................................................................................................ 36

§ 406.033 ............................................................................................................ 36

§ 408.001 ...................................................................................................... 10, 13

§ 409.004 ...................................................................................................... 18, 20

§ 409.005 ............................................................................................................ 10

§ 409.021 ............................................................................................................ 11

§ 410.165 ............................................................................................................ 30

§ 410.205 ............................................................................................................ 11

§ 410.301 ...................................................................................................... 31, 32

§ 414.002 ............................................................................................................ 35

§ 415.001 ............................................................................................................ 11

§ 415.002 ............................................................................................................ 11

§ 415.008 ............................................................................................................ 11

§ 415.021 ...................................................................................................... 11, 35

§ 415.031 ............................................................................................................ 11

§ 415.034 ............................................................................................................ 11

Other Authorities

Appeals Panel No. 021771 (Division of Worker’s Compensation, September 3,

2002) ................................................................................................................ 29

Appeals Panel No. 030660 (Division of Worker’s Compensation, April 28, 2003)

......................................................................................................................... 29

Appeals Panel No. 101718 (Division of Worker’s Compensation, March 21, 2011)

......................................................................................................................... 30

Rules

Tex. Rule of Civ. P. 198.3 ................................................................................... 24

Regulations

28 TEX. ADMIN. CODE § 43.10 ........................................................................ 26, 27

28 TEX. ADMIN. CODE § 110.1 .............................................................................. 27

vii

No. __________________

IN THE COURT OF APPEALS

FOR THE FIRST DISTRICT OF TEXAS

In re IWORKS PERSONNEL, INC.,

LUIS TREVINO, AND HAYDEE GUTIERREZ,

Relators

Original Proceeding on Petition for Writ of Mandamus

From the 113th District Court, Harris County, Texas

Honorable Michael Landrum, Judge Presiding, Respondent

Cause No. 2012-61407

PETITION FOR WRIT OF MANDAMUS

TO THE HONORABLE FIRST COURT OF APPEALS:

This is a worker’s compensation case. Through artful pleading Plaintiff has

sought to recast this case as a non-subscriber case, a breach of contract case, a

fraud case, a third-party beneficiary case, and so on. However, the Division of

Worker’s Compensation has exclusive jurisdiction over Plaintiff’s claims, no matter

how artfully plead, and the trial court lacks subject matter jurisdiction until Plaintiff

has exhausted the administrative remedies provided by the Worker’s

Compensation Act2 (the “Act”).

2TEXAS LABOR CODE, Title V, Subtitle A (“Texas Workers’ Compensation Act), §§ 401.001

– 451.003. Unless otherwise indicated, all code references in this petition refer to the

Texas Labor Code.

1

This issue is of vital importance because the carefully balanced dispute

resolution and enforcement procedures that the legislature built into the system

are lost if a claimant can circumvent the Act by refusing to pursue his administrative

remedies and simply recasting his claims as common-law or extra-statutory

causes of action. This Court should exercise its mandamus jurisdiction in this case

and order the trial court to dismiss Plaintiff’s causes of action.

I. Statement of the Case

Nature of the case. Relator, iWORKS Personnel, Inc. (“iWORKS”) is a

temporary staffing company who contracted with Defendant, Waste Management,

Inc. (“WM”) to provide temporary labor at its waste processing facility. Real Party,

Mose Guillory (“Real Party”),3 was a temporary worker assigned by iWORKS to

work at WM’s facility. Real Party was injured on August 5, 2012 while working at

the WM facility. He subsequently sued iWORKS,4 WM, Inc. (“WM”), and Seaton,

LLC d/b/a Staff Management (“SM”),5 a third party administrator of WM’s

temporary labor program.

3 Real Party’s wife, Mary Guillory, is a Plaintiff in this case. Plaintiffs’ Fifth Amended

Petition makes no express claims on her behalf, but it does seek damages for loss of

consortium and loss of household services. Her claims are all derivative of Real Party’s

claims. As used in this petition, “Real Party” refers to both Mose Guillory and Mary

Guillory.

4 Plaintiff also sued iWORKS’ CEO, Luis Trevino, and President, Haydee Gutierrez, in

their individual capacities. They joined iWORKS in this petition. As used in this petition,

“iWORKS” refers to both the company and the two individuals.

5The trial court granted SM’s Rule 91a motion to dismiss. Plaintiff’s appeal is currently

pending before this Court (No. 01-14-00379-CV).

2

Trial court. The Honorable Michael Landrum, 113th Judicial District Court of

Harris County, Texas (“Respondent” or “trial court” herein).

Proceedings in the trial court. Relators challenged the trial court’s subject

matter jurisdiction based upon the exclusive jurisdiction of the Texas Department

of Insurance, Division of Worker’s Compensation (“DWC”) and Real Party’s failure

to exhaust the administrative remedies available under the Act before the DWC.

Relators also challenged Real Party’s causes of action based on traditional and no

evidence motions for summary judgment, aside from the jurisdictional challenges.

The trial court granted Relators’ challenges to numerous of Real Party’s causes of

action, but denied Relators’ jurisdictional challenges on the remaining claims and

causes of action by Order dated February 20, 2015.6 It is from the trial court’s

assertion of jurisdiction over those remaining claims that Relators seek mandamus

relief.

II. Statement of Jurisdiction

This Court has jurisdiction pursuant to Tex. Gov’t Code § 22.002(a).

Mandamus relief is appropriate to correct a trial court’s assertion of subject

matter jurisdiction over a case that lies squarely within the exclusive jurisdiction

of an administrative agency, here the DWC over the Texas workers’

6 Tab 1

3

compensation system.7 This erroneous assertion of jurisdiction is an abuse of

discretion. Permitting the trial court to improperly assert jurisdiction results not

only in hardship to Relators, but also interferes with the “legislatively mandated

function and purpose” of the DWC, undermines the Legislature’s intent to create

a comprehensive scheme to govern workers’ compensation claims in Texas,8

and effectively abrogates the Act, leaving Relators with no adequate remedy by

appeal.9 This court can correct the trial court’s assertion of subject matter

jurisdiction here through a writ of mandamus because the underlying claims lie

within the exclusive jurisdiction of the DWC.

III. Issue Presented

Did the trial court abuse its discretion when it refused to dismiss claims over

which it has no subject matter jurisdiction because the Division of Worker’s

Compensation has exclusive jurisdiction and Plaintiff has not exhausted his

administrative remedies?

IV. Statement of Facts

Real Party was severely injured on August 5, 2012 while in the course of

his employment at Waste Management’s waste reclamation facility in Houston,

Texas. Real Party was a temporary worker recruited by IWORKS and assigned

to operate a front-end loader at WM’s facility. At some point WM reassigned Real

7In re Liberty Mutual Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009), citing In Re Sw.

Bell Tel. Co., 235 S.W.3d 619, 624 (Tex. 2007); In re Entergy Corp., 142 S.W.3d 316,

321 (Tex. 2004).

8 Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 344 (Tex. 2012)

9See In re Entergy, 142 SW.3d at 321; In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d at

328.

4

Party to operate a Harris Baler.10 Real Party was injured when he entered the

baler to clear a jam without depowering the machine. The baler activated and

severed his right leg below the knee and half of his left foot.

This lawsuit arises from Real Party’s attempt to recover damages for the

injuries he sustained while employed at the WM facility. Throughout this suit Real

Party has asserted various causes of action, some sounding in tort (negligence,

gross negligence, negligence per se, negligent hiring, training, and supervision,

common law fraud, fraud by non-disclosure, and negligent undertaking); some

sounding in contract (breach of contract as third-party beneficiary to the iWORKS

/ WM service agreement and breach of contract as a third-party beneficiary of the

WM / SMX agreement). Real Party has also alleged numerous theories of

vicarious liability (respondeat superior, joint enterprise, and partnership liability).

Real Party’s claims against iWORKS have been narrowed down to negligence,

negligence per se, gross negligence, negligent hiring, training, and supervision,

breach of contract, respondeat superior, partnership liability, and joint enterprise

liability.11 Regardless of how artfully or inventively labeled or recast, all of

10 A Harris Baler is essentially a gigantic trash compactor which compacts sorted refuse

into dense bales. The material is fed into the baler via a conveyor belt which dumps the

material into the compacting chamber.

11 The trial court denied iWORKS’ motion for summary judgment on all causes except for

breach of contract, which it granted. However, the trial court declined to dismiss the same

contract claims against Trevino and Gutierrez, even though they were neither parties nor

signatories to the contract in their individual capacities. The trial court also dismissed

Plaintiff’s negligence claims against Trevino and Gutierrez, but left the gross negligence

claims against them intact. Thus, while as a matter of law Trevino and Gutierrez are not

negligent, they are still subject to liability on Plaintiff’s gross negligence claims. Likewise,

5

Plaintiff’s claims flows directly from his on-the-job injury.

V. Summary of Argument

Real Party’s claims fall within the exclusive jurisdiction of the DWC, and

therefore, the trial court is without subject matter jurisdiction to consider these

claims until they have exhausted all administrative remedies provided for under

the Act. Allowing a participant in the worker’s compensation system to pursue such

claims in a civil action is incompatible with the comprehensive administrative

processes and other remedies in the Act.

Despite Real Party’s attempts to avoid the Act by creatively pleading their

complaints, the essence of their suit falls squarely under the purview of the DWC.

To hold otherwise would allow claimants to easily avoid the exclusive jurisdiction

of the Act by simply relabeling their claims as other common law or statutory

theories, even though such claims are equally incompatible with the administrative

processes and other remedies in the Act. This is precisely why the Texas Supreme

Court has repeatedly emphasized the legislative intent that there be no alternative

remedies available outside the Act.

they are also subject to same breach of contract liability that the trial court found their

company, a party to the contract, not liable for as a matter of law. The trial court denied

Relators’ motion to reconsider these paradoxical results.

6

VI. Standard of Review

This Court set forth the proper standard of review in in this matter in Scwartz

v. Ins. Co. of Pa.12

A plea to the jurisdiction contests a trial court's subject matter

jurisdiction. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638

(Tex.1999). Whether a court has subject matter jurisdiction is a matter

of law. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226

(Tex.2004). Accordingly, we review a challenge to the trial court's

subject matter jurisdiction de novo. Id. at 228.

When reviewing a plea to the jurisdiction, we must look to the

allegations in the pleadings, construe them in the plaintiff's favor, and

consider the pleader's intent. See County of Cameron v. Brown, 80

S.W.3d 549, 555 (Tex. 2002). In doing so, we consider the facts

alleged in the petition, and to the extent relevant to the jurisdictional

issue, any evidence submitted by the parties to the trial court. See

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000). The

plaintiff bears the burden to allege facts affirmatively demonstrating

the trial court's jurisdiction to hear a case. See Tex. Ass'n of Bus. v.

Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). If a plaintiff

pleads facts that affirmatively demonstrate an absence of jurisdiction

and the jurisdictional defect is incurable, then the cause is properly

dismissed. Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802,

805 (Tex. 1989). However, when the plaintiff fails to plead facts that

establish jurisdiction, but the petition does not affirmatively

demonstrate incurable defects in jurisdiction, the issue is one of

pleading sufficiency, and the plaintiff should be afforded the

opportunity to amend. Brown, 80 S.W.3d at 555.

Plaintiff’s Fifth Amended Petition pleads facts and cites exhibits that place this

matter squarely within the exclusive jurisdiction of the DWC. The evidence

considered by the trial court in relation iWORKS’ plea to the jurisdiction also

supports the DWC’s exclusive jurisdiction.

12 274 S.W.3d 270, 273-74 (Tex. App.—Houston [1st Dist.] 2008, pet. denied).

7

In support of this petition iWORKS has provided this Court with the following

pleadings:

1) Plaintiff’s Fifth Amended Petition;13

2) iWORKS’ Plea to the Jurisdiction;14

3) iWORKS’ Supplemental Plea to the Jurisdiction15; and

4) Plaintiff’s Response to iWORKS’ Plea to the Jurisdiction.16

All exhibits submitted with these pleadings and considered by the trial court are

found in the Appendix.17 No party offered sworn testimony at the oral hearing on

this matter. Relators have ordered a transcript of the oral argument and will

supplement the mandamus record as soon as the transcript is received from the

court reporter.

VII. Argument

A. The trial court does not have subject matter jurisdiction and any

judgment it renders is void as a matter of law.

The trial court erred when it exercised jurisdiction in this case because it

does not have subject-matter jurisdiction over Plaintiff’s claims related to his injury

at work. Without subject-matter jurisdiction the trial court cannot render a valid

judgment in this matter.18 “Subject matter jurisdiction is ‘essential to a court’s

13 Tab 2 (hereinafter “Petition”).

14 Tab 5

15 Tab 12

16 Tab 15 (hereinafter “Response”)

17 Real Party attached three exhibits totaling 561 pages to his Response. Real Party’s

exhibits are submitted to this Court in the same form as submitted to the trial court.

18 City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2014, per curium)

8

power to decide a case.’”19 Subject-matter jurisdiction cannot be waived, nor can

it be given or taken away by consent.20 “A judgment rendered without subject

matter jurisdiction cannot be considered final.”21

Lack of subject-matter jurisdiction makes a judgment void, not just

voidable.22 Lack of subject-matter jurisdiction is fundamental error and can be

raised at any time.23 Lack of subject-matter jurisdiction can even be raised for the

first time on appeal. “Not only may a reviewing court assess jurisdiction for the

first time on appeal, but all courts bear the affirmative obligation ‘to ascertain that

subject matter jurisdiction exists regardless of whether the parties have questioned

it.’”24 Furthermore, the failure to grant a plea to the jurisdiction for failure to exhaust

administrative remedies with the DWC is subject to this Court’s mandamus

review.25

19 Id. (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000)).

20 Carroll v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010).

21 Rhule, 417 S.W.3d at 442 (citing Dubai Petrol. Co. v. Kazi, 12 S.W.3d 71, 76

(Tex.2000)).

22 In Re United Servs. Auto Ass’n, 307 S.W.3d 299, 209 (Tex. 2010).

23Tex. Worker’s Comp. Comm’n v. Garcia, 893 S.W.2d 504, 517 n.15 (Tex. 1995) (noting

that a trial court can question its subject-matter jurisdiction even without a motion by either

party).

24Waco ISD v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000); see Rhule, 417 S.W.3d at 442

(quoting In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 306 (Tex.2010)).

25 See In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig.

proceeding) (per curiam); In Re Liberty Ins. Corp., 321 S.W.3d 630 (Tex.App.—Houston

[14th Dist.] 2010) (orig. proceeding).

9

B. The Act demonstrates the legislature’s intent that the Act provide the

exclusive remedy for on-the-job injuries.

The Act provides a compensation system for “personal injuries sustained

by an employee in the course and scope of his employment.”26 In exchange for

prompt remuneration of benefits to the employee with no burden of proof as to

negligence, the Act prevents employees from seeking common law remedies

against the employer, agent or employee of the employer for on-the-job

injuries.27 The Act also limits employers’ exposure to the uncertainties of

litigation costs and awards.28 Recovery under the Act is intended to be an

injured employee’s sole remedy for work-related injuries.29

The legislature empowered the DWC to administer and operate the

workers’ compensation system of Texas.30 The system’s processes are initiated

by the worker reporting an occupational injury or disease to the employer, after

which the employer must report the injury claim to the carrier. 31 Disputes

regarding general compensability and extent of injury are addressed under

26 Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988).

27Id.; see § 408.001(a); Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139

S.W.3d 789, 792 (Tex. App.—Dallas 2004, no pet.).

28See Ruttiger, 381 S.W.3d at 441, citing In re Poly-Am., L.P., 262 S.W.3d 337, 349

(Tex. 2008). 29 Hulshouser, 139 S.W.3d at 792.

29 In Re Crawford at p. 9, No. 14-0256 (Tex. February 27, 2015) (per curiam) (a copy is

attached to the Appendix at Tab 22).

30 § 402.001(b).

31 § 409.005(a).

10

Chapter 410 of the Texas Labor Code, while Chapter 413 controls disputes

concerning specific medical benefits, including medical fees disputes and

medical necessity disputes. This matter falls under Chapter 410

Additional safeguards are built into the workers’ compensation system to

monitor compliance with the rules and regulations in Chapter 415, entitled

“Administrative Violations,” as well as provisions in Chapters 409 and 410.32 For

example, these provisions allow fines of up to $25,000 per day, per violation for

an insurer’s conduct, including, for example:

a) making a false or misleading statement; 33

b) failing to process claims reasonably;34

c) unreasonably disputing the reasonableness and necessity of health

care;35

d) conspiring to commit an act that is a violation;36 and

e) other conduct violating Commission rules.37

Any system participant can initiate an investigation by the DWC of possible

administrative violations.38 Procedurally, administrative violations follow a path

similar to Chapter 413 disputes.39

32 See generally §415.001, et seq.; §409.021; §410.205.

33 §415.008.

34 §415.002(a)(11).

35 §415.002(a)(19).

36 §415.008.

37 §415.008; §415.021.

38 §415.031.

39 §415.034-5.

11

In 1989 the Texas Legislature overhauled the worker’s compensation

system to address the system’s deficiencies, to balance the interests and

concerns of the worker and the employer (or insurance carrier), and to provide

more efficient results for all parties. Prior to that time and up to this Court’s

opinion in Ruttiger, the shortcomings of the system necessitated this Court’s

acknowledgement of a common law cause of action for extra-contractual

damages. In Ruttiger, this Court set out its analysis of the respective roles of

the Legislature and this Court in relation to the Act and the worker’s

compensation system as a whole. Improvements to the pre-1989 system were

cited to include the following:

1) reduction of the disparity of bargaining power between

employees and insurance carriers;

2) removal of insurers’ exclusive control over the processing of

claims;

3) curtailment of insurers’ ability to refuse or unreasonably deny

payment of valid claims in an arbitrary manner;

4) provision of information to employees and free assistance before

the DWC process through the ombudsman program; and

5) provision of multiple remedies and penalties to enforce the

parties’ rights and to regulate the parties’ conduct, up to and

including revocation of a carrier’s right to do business in Texas “if

on multiple occasions it fails to pay benefits promptly and as they

accrue.”40 The Legislature provided injured workers with tools

to which they did not previously have access. Carefully

considering these improvements to the system, this Court held

that common law causes of action outside the framework of the

Act are no longer necessary when the Act covers the

complained-of conduct or the remedy sought.41

40 Ruttiger, 381 S.W.3d at 449-450.

41 Id. at 444, 445, 451.

12

Recognizing the broad scope and encompassing remedies brought about by the

1998 revisions to the Act, the Texas Supreme Court held that “the Court should

not alter the Act’s comprehensive scheme.” 42

C. Through its broad rule making and enforcement provisions, the Act

empowers the DWC to resolve disputes, enforce compliance, and

punish offenders.

The Act provides a compensation system for “personal injuries sustained

by an employee in the course and scope of his employment.” 43 In exchange for

prompt remuneration of benefits to the employee with no burden of proof as to

negligence, the Act prevents employees from seeking common law remedies

against the employer, agent or employee of the employer for on-the-job

injuries.44 The Act also limits employers’ exposure to the uncertainties of

litigation costs and awards.45 Recovery under the Act is intended to be an

injured employee’s sole remedy for work-related injuries.29

An agency has exclusive jurisdiction “when a pervasive regulatory scheme

indicates that Congress intended for the regulatory process to be the exclusive

42Liberty Mut. Ins. Co. v. Adcock, 412, S.W.3d 492, 495 (Tex. 2013) (explaining that “the

Legislature devised a comprehensive workers’ compensation system, with specific

benefits and procedures based on the public policy of the State of Texas. We concluded

in Ruttiger that the Court should not alter the Act’s comprehensive scheme, and we

reaffirm that principle today.”)

43 Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988).

44Id.; § 408.001(a); Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139 S.W.3d

789, 792 (Tex. App.—Dallas 2004, no pet.).

45See Ruttiger, 381 S.W.3d at 441, citing In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex.

2008).

13

means of remedying the problem to which the regulation is address.”46 “An agency

has exclusive jurisdiction . . . when a pervasive regulatory scheme reflects

legislative intent that an agency have the sole power to make the initial

determination in the dispute.”47 Exclusive jurisdiction is a question of law that turns

on statutory interpretation.48 The Texas Supreme Court held in Saenz v. Fidelity

& Guaranty Insurance Underwriters that “the Workers’ Compensation Act vests the

power to award compensation benefits solely in the [DWC]..., subject to judicial

review.”49

In Tex. Mut. Ins. Co. v. Ruttiger50 the Texas Supreme Court discussed the

significant changes the Legislature made to the Act in 1989.51 It noted that the

“amendments included significant reforms, among which were changes in how to

calculating benefits for injured workers, the amount of income benefits workers

could recover, the dispute resolution process, the addition of an ombudsman

program to provide assistance for injured workers who had disputes with insurers,

46 Subaru of Am. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002)

47In Re Mid-Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex.App.—Houston [1st Dist.]

2012) (orig. proceeding)

48 See Rhule, 417 S.W.3d at 442 (citing Subaru, 84 S.W.3d at 221).

49 925 S.W.2d 607, 612 (Tex. 1996)

50 381 S.W.3d 430 (Tex. 2012).

51 The Ruttiger opinion addressed the viability of a common-law cause of action for breach

of the duty of good faith and fair dealing against a worker’s compensation carrier, a cause

of action previously approved of by the Texas Supreme Court in Arranda v. Ins. Co. of

North Amer., 748 S.W.2d 210 (Tex. 1988). The Ruttiger court held that the 1989

amendments to the Act manifested the Legislatures’ intent to vitiate the need for such a

cause of action and expressly overruled Arranda. Id., 381 S.W.3d at 438-56.

14

and increasing sanctions for violations of the Act.”52 The Ruttiger court stated that

“[t]he purpose of the Act is to provide employees with certainty that their medical

bills and lost wages will be covered if they are injured.” Id. at 441.

To accomplish these purposes, the Act provides detailed notice and

administrative dispute resolution proceedings that include specific

deadlines and incorporate a “conveyor-belt” approach. That is, once

the administrative dispute resolution process is initiated, a dispute

continues through the process until the dispute is resolved either by

the parties or by a binding decision through the resolution procedures.

Id. at 441.

The Ruttiger opinion provides a lengthy description of “the detailed notice

and administrative dispute resolution proceedings” encompassed by the Act. 53 In

describing the pervasiveness of the Act the Ruttiger court noted that the Act affords

the DWC significant power to enforce the Act against the various parties in the

worker’s compensation system. Id. The Ruttiger court concluded:

It is apparent that the Act prescribes detailed, WCD-supervised, time-

compressed processes for carriers to handle claims and for dispute

resolution. It has multiple, sometimes redundant but sometimes

additive, penalty and sanction provisions for enforcing compliance

with its requirements.54

The court recognized that allowing an employee to circumvent the act by asserting

common law causes of action would be “inconsistent with the Act’s goals and

legislative intent exhibited in the act” and could also “result in rewarding an

52 Id., 381 S.W.2d at 433.

53 Id. at 441-43.

54 Id. at 443.

15

employee who is dilatory in utilizing the Act’s detailed dispute resolution

procedures, regardless of whether the delay was intentional or inadvertent,

because whether and when the dispute resolution begins is by and large

dependent on the employee.” Id.

D. Real Party’s failure to exhaust his administrative remedies under the

Act precludes the trial court’s exercise of jurisdiction over this matter.

When an agency has exclusive jurisdiction a party must exhaust its

administrative remedies before seeking recourse through judicial review. 55 “If an

agency has exclusive jurisdiction... a party must first exhaust all administrative

remedies before a trial court has subject matter jurisdiction.”56 “Absent exhaustion

of administrative remedies, a trial court must dismiss the case.”57

1. Real Party consciously chose to circumvent the Act in pursuit of

common-law remedies for his work-place injury.

There is no question that Real Party not exhausted his administrative

remedies through the DWC. He readily admits this.58 Real Party claims that it is

55Rhule, 417 S.W.2d at 442 (citing Cash Am. Int’l., Inc. v. Bennett, 35 S.W.3d 12, 15

(Tex. 2000)).

56Cunningham Lindsey Claims Mgmt. v. Snyder, 291 S.W.3d 472, 477 (Tex.App.—

Houston [14th Dist.] 2009, pet. denied).

57Rhule, 417 S.W.2d at 442 (citing Tex. educ. Agency v. Cypress-Fairbanks I.S.D., 830

S.w.2d 88, 90 (Tex. 1992).

58 Tab 15, p. 18, ¶ 80. Real Party states:

In accordance with the Texas Labor Code Ch. 409, Plaintiffs did previously

file their DWC 41 form on the 1-year anniversary of the injury in question.

However, Plaintiffs did so solely to preserve their right to seek benefits in

the event that this Court or the Court of Appeals later determined that

iWorks Defendants and/or WM Defendants were workers’ compensation

subscribers. Plaintiffs are not seeking workers’ compensation benefits from

16

justified in foregoing the Texas Workers’ Compensation System because both

iWORKS and WM are nonsubscribers.59 However, an examination of the Plaintiff’s

allegations and the evidence submitted in connection with Relator’s Plea to the

Jurisdiction demonstrate that Relator was a subscriber the Act.

Real Party was injured on August 5, 2012.60 On August 30, 2012 he

executed a DWC-041 form61 requesting compensation for a work-related injury.62

On that form he stated that he was represented by Bradford J. Gilde (“Gilde”).63

Thus, fifteen days after his work-related injury (over 2 ½ years ago) Real Party was

at a minimum aware of the potential availability of benefits under the Act. It is also

fair to assume that his attorney knew (or had the ability to find out) how to obtain

those benefits.

Nearly a year later on August 12, 2013, Gilde sent a letter to the DWC.64 It

was styled as a “Notice, Stay, and Preservation Letter.” Although litigation was

ongoing and both iWORKS and Waste Management were represented by

any provider, and are surely not attempting to get blood from the turnip that

is iWorks Defendants’ cancelled policy.

59 Tab 2, Petition, p. 6, ¶¶ 19-20.

60 Id. at p. 13, ¶ 36.

61“Employee’s Claim for Compensation for a Work Related Injury or Occupational

Disease.”

62 Tab 10.

63 Id.

64 Tab 14.

17

counsel,65 neither Defendant was copied on this correspondence. Gilde attached

two separate DWC-041 forms to the letter. One names iWORKS as Real Party’s

employer and the other names WM as his employer. Thus, as of the date of his

letter to the DWC, Real Party’s counsel had actual knowledge of two separate

worker’s compensation policies which would potentially provide benefits to his

client. He consciously chose to forego pursuing his client’s benefits under either

one of the policies in lieu of proceeding with his claims in the trial court. 66

Gilde’s letter to the DWC states that it:

“is submitted: (1) as a notice of claim for compensation...as a

preservation of right to file and seek a claim for compensation...and

pursuant to Tex. Labor Code §409.004.”67

The letter further states that “this letter...is not an election or denial of a claim

for coverage.”68 Real Party cannot hedge his bets with the DWC while seeking a

judicial remedy in the trial court without first exhausting his administrative

65 At that time attorney Aric Garza was counsel for iWORKS.

66On information and belief, as of the filing of this petition Real Party has still not sought

benefits under WM’s worker’s compensation policy even though the trial court dismissed

his claims against WM pursuant to the “comp bar” defense.

Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238 (Tex. 2012) held that for

purposes of the Act a temporary staffing company and its client are both co-employers

and that the client company cannot exclude or segregate temporary workers from its

worker’s compensation coverage. Simply put, the state of Texas wants all workers

covered. Thus, a temporary staffing employee typically has two different worker’s

compensation policies which can cover him for on-the-job injuries. Which policy actually

covers the worker is usually a matter of contract between the staffing company and its

client.

67 Tab 14 (emphasis in original).

68 Id.

18

remedies. His failure to do so in this matter, despite knowing the administrative

requirements set forth in the Act, deprives the trial court of subject-matter

jurisdiction over his claims.

Gilde’s letter to the DWC purports to reserve Real Party’s right to seek relief

from the DWC in the event he was unsuccessful in in the trial court. This approach

turns the purpose of the entire worker’s compensation system on its head. This

letter demonstrates that Real Party was well aware of the requirements under the

Texas Labor Code yet consciously chose to attempt to circumvent that process in

hopes of a common law verdict. This is not the public policy of Texas. As the

Ruttiger court observed, “the extra-statutory cause of action provides incentive for

an injured worker to delay using the avenues for immediate relief that the

Legislature painstakingly built into the law” and “distorts the balances struck in the

Act and frustrates the Legislature’s intent to have disputes resolved quickly and

objectively.”69

2. The laws embodied in the Act and the rules promulgated by the

DWC mandate that iWORKS policy was in effect on the date that

Real Party was injured at work.

iWORKS is a subscriber under the Act. iWORKS purchased a worker’s

compensation policy from Texas Mutual with the effective dates of 09/04/2011

through 09/04/2012.70 That iWORKS actually purchased this policy is not disputed

69 Ruttiger, 381 S.W.3d at 451.

70 Tab 6.

19

by Real Party. Rather, Real Party argues that the policy was terminated prior to

his August 5, 2012 injury.71 To support this claim he cites to a Notice of Dismissal

purportedly issued by Texas Mutual72 and discovery responses from Texas Mutual

and Lette Insurance Company, iWORKS’ insurance agent who procured the

policy.73

But it has long been ‘the settled policy of this State to construe liberally

the provisions of the [Act] in order to effectuate the purposes for which

it was enacted.’ Coverage is a fundamental purpose of the Act.74

Real Party’s contentions and the evidence offered to support them do not comport

with the statutory provisions provided for in the Act and only serve to thwart the

fundamental purpose of the Act, coverage.

71 Tab 15, p. 5-9, ¶¶ 28-39.

72 Id.

73 Id.

74Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 453 (Tex., 2009) (J. Hecht

concurring) (emphasis added) (quoting Huffman v. S. Underwriters, 133 Tex. 354, 128

S.W.2d 4, 6 (1939) (quoted in In re Poly-America, L.P., 262 S.W.3d 337, 350 (Tex. 2008)).

In support of his proposition that the Act has historically been interpreted by the courts as

broadly as possible so as to find coverage, Justice Hecht cites Citing Millers' Mut. Cas.

Co. v. Hoover, 235 S.W. 863, 864 (Tex. Comm'n App.1921, judgm't adopted) (“It has

been thought, inasmuch as the [Act] is in derogation of the common law, that it should be

given a strict construction, but the courts have very generally held that a spirit of liberality

should characterize its interpretations, for the reason that it is to be classed as remedial

legislation.” (quotation omitted)); Southern Sur. Co. v. Inabnit, 1 S.W.2d 412, 413-414

(Tex.Civ.App.-Eastland 1927, no writ) (“The leading authorities ... agree that Workmen's

Compensation Laws came into existence in response to a general acceptation of the

broad economic theory that industrial accidents should properly be chargeable as a part

of the overhead expenses of the industries. These laws are remedial in their nature, and

should be liberally construed with the view of promoting their objects. The early tendency

of our courts to construe them strictly because they were thought to be in derogation of

common law has long since given place to a liberal rule of construction. The rule now

prevailing prevents the restriction of the scope of the laws by exceptions and exact

definitions not in harmony with their spirit.”).

20

In 2005 the DWC was established as a division of the Texas Department

Insurance, replacing the abolished Texas Workers’ Compensation Commission.75

The DWC is administered by the commissioner of workers’ compensation who is

appointed by the governor for a two-year term.76 The Act gives the commissioner

authority to “adopt rules as necessary for the implementation and enforcement of

this sub-title [the Act].”77 These rules are codified in the Texas Administrative

Code.78 The Labor Code and the Texas Administrative Code (“TAC”) establish the

statutory and regulatory provisions by which an employer can elect to submit to

the Act by purchasing workers’ compensation insurance and, more importantly in

this case, the manner, effectiveness, and effect of the termination of workers’

compensation insurance by a carrier.

Under the Act an employer “may elect to obtain worker’s compensation

insurance coverage” and is thereby “subject to this subtitle [the Act].” 79 It is

undisputed that iWORKS elected to obtain workers’ compensation insurance

coverage and thereby subject itself to the Act. 80 iWORKS purchased a workers’

75 §402.001(b).

76 §402.00111; §402.00117.

77 §402.061; §402.00111

78See generally Title 28 Tex. Admin. Code, Part II. (“Texas Department of Insurance,

Division of Workers’ Compensation”).

79 §406.002.

80Even Plaintiff’s Petition states that “[a]s is clear, in addition to supplying client

companies with leased employees or temporary workers, IWORKS DEFENDANTS also

have the duty and responsibility to provide worker’s compensation.” Tab 2, p. 10, ¶ 24;

21

compensation policy from Texas Mutual effective 09/04/2011 through

09/04/2012.81 Luis Trevino, owner of iWORKS, testified that iWORKS subscribed

to worker’s compensation insurance from its inception and that this is the normal

course of business for a temporary staffing company. 82 Furthermore, the Service

Agreement between iWORKS and WM required that iWORKS carry workers’

compensation insurance.83 It is not Real Party’s contention that iWORKS was a

non-subscriber, rather, he contends that the Texas Mutual policy was cancelled

several weeks before his injury.84 As is discussed below, this contention is

unsupported by the Pleadings and the evidence.

In opposition to iWORKS’ Plea to the Jurisdiction, Real Party relied upon

four single-page documents85 as well as discovery responses from Texas Mutual

and Lette Insurance Company.86 The primary document he relies upon is a “Notice

of Termination.”87 However, this document has no probative value. There is no

but see Id., p. 6, ¶¶ 19-21 where Real Party makes the global allegation (without factual

support) that both iWORKS and WM are non-subscribers.

81 Tab 6.

82 Tab 11; Trevino testified: “Since it has been in business iWORKS has continuously

subscribed to Worker’s Compensation insurance and has covered all of its temporary

employees that it sends out on assignment. This is the standard course of business for

a temporary staffing company.”

83 Tab 3.

84 Tab 15, pp. 5-8, ¶¶ 25-32.

85 Real Party attached 560 pages of documents to his response (Tabs 16-18).

86Tabs 16 and 17. For the sake of simplicity, Relator has separated the evidence

specifically cited in Real Party’s response and has combined it under Tab 19 in the

Appendix.

87 Tab 19 The same document was produced by both Texas Mutual and Lette Ins.

22

evidence that this Notice was ever sent to iWORKS. Luis Trevino testified that

iWORKS never received notice of termination.88 He stated:

The first knowledge that iWORKS had of an alleged gap in its worker’s

compensation coverage was when Mose Guillory’s attorney made

that allegation during my deposition in this case. Although Guillory’s

attorney presented what appeared to be a notice of termination, I had

no knowledge of such notice. During that alleged period of time we

had never missed a premium payment, we had received no

communication from our broker regarding any termination, we had

received no denial of any claims, and we never had problems

obtaining Certificates of Insurance.

The testimony is uncontroverted. The notice relied upon by Real Party purports to

have been sent by certified mail which begs the question – where is the green card

or the unclaimed envelope?

The only other evidence offered by Real Party is the self-serving discovery

responses from Texas Mutual. Texas Mutual’s canned response to almost all of

the questions posed by Real Party (subject to objection) was:

Texas Mutual insurance policy no. STA_0001244473 301 10904

(“The Policy”) was issued to Preferred Staffing Company, LLC d/b/a

iWorks Personnel (“Preferred Staffing”) for the coverage period of

09/04/2011 to 09/04/2012. The Policy was cancelled, effective

07/16/2012 (See Notice of Cancellation, document Bates No.

TXM00318). Texas Mutual Insurance’s Company’s actions regarding

issuance of The Policy and subsequent cancellation were conducted

pursuant to and in accordance with the Rules set by the Texas

Department of Insurance Division of Workers’ Compensation and the

Texas Worker’s Compensation Act.89

88 Tab 11.

89 Tab 19.

23

Real Party also relies upon admissions submitted by Texas Mutual “admitting” that

1) the policy “was cancelled prior to August 5, 2012”, and 2) that “iWORKS was a

‘nonsubscriber,’ under Texas law to your [Texas Mutual’s] knowledge and

definition of “nonsubscriber.”90 Notwithstanding the fact that these admissions are

conclusory and lack any evidentiary foundation, these admissions have no

evidentiary value as they cannot be used against iWORKS.91

What Texas Mutual’s evidence does show is that iWORKS did indeed have

a policy covering the date of Real Party’s injury. What it does not show is any

evidence that the policy was properly terminated pursuant to the Labor Code and

the rules established by the DWC. Again, where is the green card? Where is the

unclaimed envelope? It is not in any of the documents submitted by Real Party.

Texas Mutual’s testimony also supports the exclusive jurisdiction of the DWC when

it claims that it has adhered to all of the requirements of the Act and the DWC rules

appurtenant thereto. It is solely within the DWC’s province to determine Texas

Mutual’s actual compliance and solely within the DWC’s administrative power to

punish and sanction Texas Mutual for violations of the Act and/or the DWC rules.

Real Party also referenced an August 24, 2012 letter written by Texas

Mutual to show cancellation of the policy.92 Again there is no evidence to show

90 Tab 19.

91Tex. Rule of Civ. P. 198.3; see U.S. Fid. & Guar. Co. v. Goudeau, 272 S.W.3d 603,

610 (Tex. 2008).

92 Tab 19.

24

that this was actually sent to iWORKS or that iWORKS ever received it. Nor is

there any mention of termination in this letter. However, the very next document

in Real Party’s exhibit does show that iWORKS paid Texas Mutual just under

$44,000.00 in premiums for that policy period.93

The only other document offered by Real Party in opposition to iWORKS

Plea to the Jurisdiction is an “Appointment Confirmation” dated October 18, 2012 94

that Real Party offered as proof that iWORKS “was in direct contact with Texas

Mutual during this cancellation period.”95 Notwithstanding the same issues of

delivery and receipt, this letter makes no mention of termination even though it is

dated over three months since the policy was supposed to have been cancelled.

The very next two documents in Real Party’s exhibit shows that on November 12,

2012 a copy of an “Incomplete Final Audit Notification” allegedly sent to iWORKS96

was also faxed to Lette Insurance. What is interesting about this document is that

it states

To prevent cancellation of your current coverage, please contact the

Premium Audit department promptly.97

93 Tab 20.

94 Tab 19.

95 Tab 15, p. 9, ¶ 38.

96Tab 21; Again, Real Party provides no evidence that this letter was actually sent to or

received by iWORKS.

97 Id.

25

This begs the question, if iWORKS’ coverage was terminated in July, 2012, how

could its current coverage in November, 2012 be subject to cancellation? This

court, looking at this evidence de novo, should find that the evidence submitted by

Real Party to show the trial court’s jurisdiction in this matter is of no probative effect

at all. However, even had the trial court (or this Court) given any weight to the

evidence submitted by Real Party, the laws of the Act and the Rules of the DWC

still confer exclusive jurisdiction to the DWC.

The Act and the rules enacted by the DWC have very specific requirements

governing the termination of a workers’ compensation policy. The Act provides that

an insurance company that terminates a policy “shall deliver notice of the

cancellation... by certified mail or in person to the employer and the division” at

least thirty days prior to the effective date of the cancellation. 98 If the insurance

company does not give notice as required, then the policy is extended until proper

notice is provided.99

Pursuant to the rule making authority given to it in the Act, the DWC has

promulgated additional rules for the termination of a worker’s compensation policy

which are codified in the TAC.100 Chapter 43 provides that “[r]ejection of the

workers’ compensation system [o]ccurs when a subscriber terminates coverage or

98 §406.008.

99 Id.

100 See 28 TEX. ADMIN. CODE, Chapter 43.

26

fails or refuses to purchase a policy of workers’ compensation insurance.”101 Thus,

there is no allegation that iWORKS “rejected” the workers’ compensation system.

Under the DWC’s rules a carrier must give the employer written notice of

termination at least thirty days before the effective date of termination. 102 Notice

must be by certified mail; there is no provision for personal delivery.103 The

effective date of the termination under Chapter 43 is “the latest of the following

dates: (A) on the 31st day after the carrier notifies the subscriber as provided in

subsection (c) . . . ; (B) the day the carrier files notice of termination with the board

. . .; or (C) the actual termination date recited on the notice.”104

Chapter 110 provides substantially more protection for both the employer

and the employee. It provides that:

f) Cancellation or non-renewal of a workers' compensation insurance

policy by an insurance company takes effect on the later of:

(1) the end of the workers' compensation insurance policy period; or

(2) the date the division and the employer receive the notification

from the insurance company of coverage cancellation or non-

renewal and the later of:

(A) the date 30 days after receipt of the notice required by

Labor Code, §406.008(a)(1);

(B) the date 10 days after receipt of the notice required by

Labor Code, §406.008(a)(2); or

101 Id., § 43.10(a)(2).

102 Id., § 43.10(c)(1-3)

103 Id.

104 Id., § 43.10(d)(1)

27

(C) the effective date of the cancellation if later than the date

in paragraph (1) or (2) of this subsection.105

The rules promulgated by the DWC and codified in the TAC reflect the driving

intent of the State of Texas that its workers be covered.

How do these laws and regulations apply in this case? Under Rule 110.1,

regardless of when or how or if iWORKS was provided with notice of cancellation

by Texas Mutual, the effective date of termination would be at the end of the policy

period on September 4, 2012. Under Rule 43.10 the effective date of termination

would be on the 31st day after iWORKS received notice of cancellation from Texas

Mutual through certified mail. Under Section 408.10, the termination date is

extended until Texas Mutual provides notice of cancellation to iWORKS through

either certified mail or personal delivery. Since iWORKS never received notice of

cancellation through certified mail, under both Rule 43.10 and Section 408.10 the

policy terminated under its own terms on September 4, 2012. Real Party was

injured on August 5, 2012. Thus he falls under the coverage of iWORKS’ workers’

compensation policy.

105 Id., § 110.1(f) (emphasis added).

28

E. The DWC has exclusive jurisdiction to determine coverage.

The DWC routinely addresses the issues raised in this case through its

administrative proceedings.106 For example, in Appeals Panel No. 030660 107

(Division of Worker’s Compensation, April 28, 2003) the DWC appeals panel

addressed a temporary staffing situation and determined which employer was

liable, the proper application of the Staff Leasing Services Act108 (“SLSA”), and

approved the use of the borrowed servant doctrine in determining liability.

In Appeals Panel No. 021771 (Division of Worker’s Compensation,

September 3, 2002) the appeals panel addressed a matter factually similar to this

case analyzing the interplay between the contractual obligations between a staffing

106

See e.g. Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747 (Tex.App.—

Houston [14th Dist.] 2005, no pet.) (“Though we are not bound by the decisions [of the

DWC], we find them instructive . . . . “); Houston Gen. Ins. Co. v. Ass’n Cas. ins. Co., 977

S.W.3d 634, 636 (Tex.App.—Tyler 1998, no pet.) (noting that administrative decisions,

while not binding, are entitled to substantial weight).

DWC Appeals Panel decisions are available on the Texas Department of Insurance

website at http://www.tdi.texas.gov/appeals. Copies of the Appeals Panel decisions cited

herein are found in the Appendix at Tab 22.

107 Tab 22.

108 TEX. LABOR CODE, Chapter 91 (“STAFF LEASING SERVICES”). The Texas Legislature

amended Chapter 91 in 2013 renaming it “PROFESSIONAL EMPLOYMENT ORGANIZATIONS”.

This amendment supports iWORKS’ opposition to Real Party’s continuing assertion that

iWORKS is a staff leasing company. Rather, iWORKS temporary employment service as

set forth in Chapter 93 of the TEXAS LABOR CODE. Furthermore, effective September 1,

2013, TEX. LABOR CODE § 93.004(a) holds that a Certificate of Insurance “constitutes proof

of workers’ compensation insurance coverage for the temporary employment service and

the client of the temporary employment service with respect to all employees of the

temporary employment services assigned to the client.” Subsection (a) further holds that

“[t]he state or political subdivision of the state shall accept a certificate of insurance

coverage described by this section as proof of worker’s compensation coverage under

Chapter 406.”

29

company and its client company, the applicability of the SLSA, and the application

of the borrowed servant doctrine to determine coverage. The appeals panel upheld

the hearing officer’s determination that the client company was responsible for the

worker’s injury rather than the staffing company. The panel held that:

Texas courts have recognized that a general employee of one

employer may become the borrowed servant of another employer.

The determinative question then becomes which employer had the

right of control of the details and manner in which the employee

performed the necessary services. Carr v. Carroll Company, 646

S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd n.r.e.). We note that in

Texas Workers’ Compensation Insurance Fund v. DEL Industrial, Inc.,

35 S.W.3d 591 (Tex. 2000), the court held that the Staff Services

Leasing Act (SSLA), Texas Labor Code Chapter 91, supersedes the

common law right-of-control test in determining employer status of

leased employees for workers’ compensation purposes. However,

(Employer 2) was not licensed under the SSLA. The hearing officer

determined that on the date of injury, (Employer 2) was a licensed

provider of temporary common workers under Chapter 92 of the

Texas Labor Code, entitled Temporary Common Worker Employers

(TCWE). In Richmond v. L. D. Brinkman & Co. (Texas) Inc., 36 S.W.3d

903 (Tex. App.-Dallas 2001, pet. denied), the court determined that

the common law right-of-control test is not superseded by Chapter 92

(TCWE) of the Texas Labor Code. The hearing officer is the sole

judge of the weight and credibility of the evidence. Section 410.165(a).

We conclude that the hearing officer did not err in applying the right-

of-control test and in determining that at the time of the injury, the

claimant was the borrowed servant of (Employer 1). The hearing

officer’s decision is supported by sufficient evidence and is not so

against the great weight and preponderance of the evidence as to be

clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175 (Tex. 1986).

Id. at p. 1-2. The client company also argued that the staffing company should be

responsible because the client company paid fees to the staffing company which

went towards worker’s compensation coverage for the temporary employees. The

panel rejected these arguments. Id.

30

In Appeals Panel No. 101718 (Division of Worker’s Compensation, March

21, 2011) the appeals panel examined a complex claim involving a contractor, a

subcontractor, a PEO, and a temporary staffing company. In finding that the

employee did not suffer a compensable injury the panel had to address issues

related to coverage (including whether or not the temporary staffing company’s

carrier properly terminated coverage), contractual duties between the parties,

liability issues between three different worker’s compensation insurance providers,

employment status of the claimant, and other related issues.

The legal issues discussed above are all issues that are in play in this case.

These are issues that the DWC routinely addresses through its administration of

the Act. These are issues that fall squarely within the exclusive jurisdiction of the

DWC. The trial court does not have subject-matter jurisdiction over these matters

until all of the administrative remedies available through the Act have been

exhausted in the same manner as demonstrated in the DWC opinions cited above.

In Morales v. Liberty Mut. Sinc. Co.,109 the Texas Supreme Court addressed

the issue of the relationship between compensability under the Texas Worker’s

Compensation Act (“the Act”), employee status, and subscriber status.110 The

109 241 S.W.3d 514 (Tex. 2007).

110 The Morales Court addressed these issues in the context of determining which

standard of review set forth in the Act should apply to judicial review of a final decision

from a DWC appeals panel. If the issues being appealed involve “compensability” then

the standard of review is the “modified de novo” standard established by §410.301. Issues

that do not address compensability are reviewed under a “substantial-evidence” standard.

31

Court held that issues of coverage such as the one in this case fall within the rubric

of the existence of a compensable injury which is properly resolved through the

Act. Morales was killed while repairing a roof on a motel.111 His wife sought death-

benefits under the act claiming he was injured while in the course and scope of his

employment with three different employers.112 Two of the employers were insured

under separate worker’s compensation policies, and the third was a

nonsubscriber.113 The court explained that:

The existence of a compensable injury is the threshold requirement

for payment of benefits under the Act. See TEX. LAB.CODE §§

401.011(5), 406.031(a). And there are various elements that affect

whether an injury is compensable, including the worker's employment

status as an employee or independent contractor at the time of injury,

whether the worker was injured in the course and scope of

employment, who controlled the employee's work when the injury

occurred, and whether a particular employer has an insurance policy

in effect. See id. §§ 401.011(12), (18), 401.012(a).

....

A dispute about any of these elements regards “compensability or

eligibility for . . . benefits” and is subject to judicial review under section

410.301.114

In In Re Tex. Mut. Ins. Co.115 the court addressed the DWC’s exclusive

jurisdiction in the context of common law breach of contract claims and disputed

Morales, 241 at 516-17. The outcome of this question of compensability also effects

venue and the appropriate scope of judicial review. Id.

111 Id. at 515.

112 Id.

113 Id.

114 Id. at 519.

115 157 S.W.3d 75 (Tex.App.—Austin 2004, orig. proceeding).

32

coverage. The Court held that the Fodge decision mandated that the claimant’s

breach-of-contract claim “is within the Commission’s exclusive jurisdiction.”116 The

Court also held that:

We likewise reject [Claimant’s] assertions that the Commission’s

exclusive jurisdiction over worker’s compensation benefits claims

does not extend to determining whether coverage existed at the time

of [Claimant’s] injury. The legislature has granted the Commission

exclusive jurisdiction over claims for policy benefits. Fodge, 63

S.W.3d at 805. In adjudicating such claims, the Commission will

necessarily have to interpret compensation policies and determine the

period in which coverage existed. Indeed, it appears to routinely do

so. See, e.g., Gonzales v. Cigna Ins. Co. of Tex, 924 S.W.2d 183,

184-87 (Tex.App.—San Antonio 1996, write denied); Houston Gen.

Ins. Co. v. Association Cas. Ins. Co., 972 S.W.2d 634, 636

(Tex.App.—Tyler 1998, no pet.).

Moreover, [Claimant’s] argument would imply that whenever the

Commission, in the exercise of its exclusive jurisdiction, encounters a

coverage issue that can be characterized as going to "policy

formation," the agency must abate its proceedings pending judicial

resolution of the "formation" issue. We doubt that the legislature, in

conferring exclusive jurisdiction upon the Commission to determine

compensation benefits claims, intended such an absurd result that

seemingly turns traditional concepts of exclusive jurisdiction on their

head.117

116 Id. at 80.

117 Id.

33

F. The newly released Crawford opinion confirms the Court’s prior

findings that it is the intent of the legislature that the DWC have

exclusive jurisdiction out of work-place injury claims and that even

artful pleadings will not let Plaintiff’s recast their claims outside of the

purview of the Act.

One week after the trial court denied iWORKS’ plea, the Texas Supreme

Court issued its opinion in In Re Crawford & Co.118 The Supreme Court held that

the DWC has exclusive jurisdiction over the Plaintiff’s claims and that the Act

provided the exclusive remedies, even over plaintiff’s common law claims. The

Crawford Court reversed the Amarillo Court of Appeals and dismissed the

Plaintiff’s district court claims.

The Crawford opinion both clarifies and expands the Supreme Court’s

holding in Ruttiger.119 In Crawford the Plaintiff sued his employer’s worker’s

compensation carrier alleging that it improperly denied him benefits from a 1998

injury. He argued that the carrier engaged in conduct that gave rise to liability

independent from and unrelated to worker’s compensation and, thus, did not fall

under the exclusive jurisdiction of the DWC. The Supreme Court rejected this

argument. The critical distinction between this case and Crawford is that the

Crawford plaintiff had already invoked the DWC’s jurisdiction, while the Real Party

has refused to invoke the DWC’s jurisdiction claiming that Relator is a non-

118No. 14-0256 (Tex. February 27, 2015) (per curiam) (a copy is attached to the Appendix

at Tab 23).

119“We agree with Crawford that the court of appeals read Ruttiger too narrowly.”

Crawford at p. 7.

34

subscriber under the Texas Labor Code. However, the seminal messages from

the Texas Supreme Court in Crawford are equally commanding in this case.

The first seminal message from Crawford is that it is the clearly established

intent of the legislature “that the current Act with its definitions, detailed

procedures, and dispute resolution processes” be the exclusive remedy for work-

place injuries, and, moreover, that this “demonstrates legislative intent for there to

be no alternative remedies.”120 The Court observed that:

The Act designates the Department of Insurance as the administrative

agency responsible “[for overseeing] the workers’ compensation

system of this state” and establishes the Division of Workers’

Compensation within the Department to “administer and operate” that

system. TEX. LAB. CODE § 402.001. It is the Division’s duty to “(1)

regulate and administer the business of workers’ compensation in this

state; and (2) ensure that [the Act] and other laws regarding workers’

compensation are executed.” Id. § 402.00114. The Division must

monitor insurance carriers, employers, and others “for compliance

with commissioner rules, this subtitle, and other laws relating to

workers’ compensation.” Id. § 414.002(a). The Division or its

commissioner may impose an array of sanctions against those who

fail to comply, including a cease-and-desist order and administrative

penalties up to $25,000 per day per occurrence. Id. § 415.021(a). As

we explained in Ruttiger, the Act, as substantially revised in 1989,

“prescribes detailed, [Division]supervised, time-compressed

processes for carriers to handle claims and for dispute resolution” and

“has multiple, sometimes redundant but sometimes additive, penalty

and sanction provisions for enforcing compliance with its

requirements.” 381 S.W.3d at 443121.

120 Crawford at p. 9 (quotes and citations omitted).

121 Crawford at p. 4.

35

Thus, the broad scope and powerful enforcement provisions provided to the DWC

by the 1989 revisions to the Act evince the legislature’s unequivocal intent that the

DWC be the forum for which work-place injuries are resolved.

The second seminal message from Crawford is that it is the substance of

the claims and not the label of the cause of action asserted which determines the

exclusively jurisdiction of the DWC.

Whether the Act provides the exclusive process and remedies,

therefore, does not depend on the label of the cause of action

asserted. As we have often explained, claimants may not recast

claims to avoid statutory requirements or to qualify for statutory

protections. [citations omitted] Instead, in assessing whether a claim

falls within the Division’s exclusive jurisdiction, courts must look at the

substance of the claim.122

Thus, Real Party’s creative and questionable assertion of causes of action

putatively beyond the scope of the Act are of no consequence. The substance of

this claim is that Real Party was injured at work and is seeking damages for those

injuries. The Crawford opinion and its predecessors hold that resolution of these

claims falls under the exclusive jurisdiction of the DWC. Therefore, the trial court

cannot exercise its jurisdiction in this matter until Real Party has exhausted his

administrative remedies. If is fundamental error for it to do so.

The crux of Real Party’s adamant disavowal of the DWC’s exclusive

jurisdiction is twofold. First is its contention that iWORKS is a non-subscriber. By

making this assertion Real Party not only seeks access to the potentially much

122 Crawford at p. 8.

36

greater recovery provided by common law remedies, but he also seeks the tactical

advantage conferred by the Act which would strip away most if Relator’s common-

law affirmative defenses, particularly contributory negligence.123 Second is the fact

that Real Party tested positive for marijuana immediately following his work-place

injury. The Act provides that an employee that tests positive for marijuana is

presumed intoxicated and that the burden is on that employee to rebut that

presumption.124 The Act further provides that an employee is not entitled to benefits

under the Act if the injury occurred while he was intoxicated. 125 Thus, Real Party

has an incredibly strong incentive to avoid the DWC at all costs, both on the upside

(potentially greater remedies) and on the downside (denial of benefits due to

intoxication). “[P]arties cannot avoid exhaustion of administrative remedies

because they fear they might not prevail.” In Re Liberty Mut. Fire Ins. Co., 295

S.W.3d 327 329 (Tex. 2009).

VIII. Conclusion

This Court should grant Relator’s request for mandamus relief and dismiss

Real Party’s claims. The trial court does not have subject matter jurisdiction. The

Legislature has made clear through the Act that the DWC has exclusive jurisdiction

over Real Party’s claims and that Real Party must exhaust all of his administrative

123 § 406.033 (a).

124 § 401.013(c).

125 § 406.032(1)(A).

37

remedies as set forth in the Act. Real Party has intentionally tried to circumvent

the act by recasting his work-place injury claims under various common law tort

and contract claims. He has done this in the hope of obtaining more generous

common law remedies and out of fear that he will not prevail in the administrative

proceedings due to his presumed intoxication. Creative pleadings notwithstanding,

Real Party’s failure to exhaust his administrative remedies through the DWC

precludes the trial court from exercising subject matter jurisdiction. The trial court

erred by doing so.

Real Party’s contention that Relator is a nonsubscriber also has no merit. It

is not supported by the pleadings and the evidence offered to the trial court. Even

if the trial court had taken Real Party’s unsupported claims as true, the Labor Code

and the Administrative Act both mandate as a matter of law that Relator’s policy

was in effect at the time of Real Party’s on-the-job injury. The Texas Supreme

Court has made abundantly clear from Ruttiger through Crawford that it is the

public policy of the State of Texas that the Act be interpreted so as to provide

coverage. Furthermore, in this matter the question of whether or not Texas Mutual

properly terminated Relator’s policy goes to compensability and is something that

the DWC resolves on a regular basis. Thus, it has no impact on the DWC’s

exclusive jurisdiction and, rather, further compels such jurisdiction.

38

IX. Prayer

Relator asks this Court to grant this petition for mandamus relief and dismiss

Real Party’s claims for lack of jurisdiction.

Respectfully submitted,

/s/ David N. Anderson

DAVID N. ANDERSON

TBN: 00797951

THE ANDERSON LAW FIRM

4309 Yoakum

Houston, TX 77006

(713) 521-6563 - Telephone

(888) 824-5624 – Fax

danderson@lodna.net

ATTORNEY FOR DEFENDANTS

IWORKS PERSONNEL, INC.,

LUIS TREVINO, and

HAYDEE GUTIERREZ

39

Certificate of Service

As required by Texas Rule of Appellate Procedure 6.3 and 9.5(b), (d), (e),

and 52.7(c), I certify that on March 13, 2015 I have served this Petition for Writ of

Mandamus on all other parties listed below through the Texas eFile system as

follows:

The Honorable Michael Landrum

113th Judicial District Court

Harris County Civil Courthouse

201 Caroline, 10th Floor

Houston, TX 77002

Respondent

Bradford J. Gilde

Texas Bar No. 24045941

bjg@gildelawfirm.com

GILDE LAW FIRM

55 Waugh, Suite 850

Houston, TX 77007

Counsel for Real Parties in Interest

Mose Guillory and Mary Guillory

B. Lee Wertz, Jr.

Texas Bar No. 00797796

lwertz@munsch.com

MUNSCH, HARDT, KOPF, AND HARR, P.C

700 Milam Street, Suite 2700

Houston, Texas 77002-2806

Counsel for Defendant, Waste Management, Inc.

__/s/ David N. Anderson______________

David N. Anderson

40

Appendix

Tab 1 – Order denying iWORKS’ Plea to the Jurisdiction

Tab 2 – Plaintiff’s Fifth Amended Petition

Tab 3 – Master Service Agreement

Tab 4 – Hold Harmless Agreement

Tab 5 – iWORKS’ Plea to the Jurisdiction

Tab 6 – iWORKS’ WC Policy

Tab 7 – Waste Management’s WC Policy

Tab 8 – Employer’s First Report of Injury or Illness (DWC-001)

Tab 9 – Hold Harmless Agreement

Tab 10 – Employee’s Claim for Compensation (DWC-041)

Tab 11 – Affidavit of Luis Trevino

Tab 12 – iWORKS’ Supplemental Plea to the Jurisdiction

Tab 13 – Texas Mutual’s Receipt of Claim

Tab 14 – Gilde’s Correspondence to DWC and Employee’s Notice of Claim

Tab 15 – Plaintiffs’ Response to iWORKS’ Plea to the Jurisdiction

Tab 16 – Texas Mutual Insurance Discovery Responses

Tab 17 – Lette Insurance Company Discovery Responses

Tab 18 – Master Service Agreement (incomplete copy of Tab 2)

Tab 19 – Documents cited in Plaintiff’s Response

Tab 20 – Final Audit Statement

Tab 21 – Incomplete Final Audit Notification

Tab 22 – DWC Review Board Decisions

42

Tab 23 – In Re Crawford, No. 14-0256 (Tex. February 27, 2015) (per curiam)

Tab 24 – Texas Administrative Code Rule 43.10 and 110.1

Tab 25 – TEXAS LABOR CODE, Chapter 401

Tab 26 – TEXAS LABOR CODE, Chapter 402

Tab 27 – TEXAS LABOR CODE, Chapter 406

Tab 28 – TEXAS LABOR CODE, Chapter 408

Tab 29 – TEXAS LABOR CODE, Chapter 409

Tab 30 – TEXAS LABOR CODE, Chapter 410

Tab 31 – TEXAS LABOR CODE, Chapter 414

Tab 32 – TEXAS LABOR CODE, Chapter 415

43

CAUSE  NO.  2012-­‐61407

MOSE  A.  GUILLORY  and     §   IN  THE  DISTRICT  COURT

MARY  GUILLORY,   §

Plaintiffs   §

§

v.   §   OF  HARRIS  COUNTY,  TEXAS

§

IWORKS  PERSONNEL,  INC.;   §

WASTE  MANAGEMENT,  INC.;   §

WASTE  MANAGEMENT  OF  TEXAS,  INC.;     §

WM  RECYCLE  AMERICA,  LLC;   §

LUIS  TREVINO;  and   §

HAYDEE  GUTIERREZ.   §

Defendants.   §   113  JUDICIAL  DISTRICT

th

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE

I. INTRODUCTION

“Few  problems  in  the  law  have  given  greater  variety  of  application  and  conflict  in

results   than   the   cases   arising   in   the   borderland   between   what   is   clearly   an

employer-­‐employee   relationship   and   what   is   clearly   one   of   independent,

entrepreneurial   dealing.”     See   NLRB   v.   Hearst   Publ’ns,   Inc.,   322   U.S.   111,   121   (1944)

(quoting  U.S.  Supreme  Court  Justice  Wiley  Blount  Rutledge).

1. Plaintiffs   MOSE   A.   GUILLORY   and   MARY   GUILLORY   (hereinafter   collectively   referred   to   as

“PLAINTIFFS”),   complain   of   the   above-­‐named   Defendants’,   IWORKS   PERSONNEL,   INC.;   LUIS   TREVINO;

and  HAYDEE  GUTIERREZ;  (hereinafter  collectively  referred  to  as  “IWORKS”  or  “IWORKS  DEFENDANTS”);

and  WASTE  MANAGEMENT,  INC.;  WASTE  MANAGEMENT  OF  TEXAS,  INC.;  WM  RECYCLE  AMERICA,  LLC

(hereinafter   collectively   referred   to   as   “WM”   or   “WM   DEFENDANTS”)   incompetence,   inter   alia,   which

incompetence   proximately   caused   Plaintiff   Mose   Guillory’s   injuries   and   PLAINTIFFS’   damages   –   to   wit:

IWORKS   was   an   incompetent   employer/entity   when   it   failed   to   subscribe   to   Texas   Workers

Compensation  Insurance  Coverage  for  Plaintiff  Mose  Guillory  and  was  incompetent  when  it  failed  to  train

Plaintiff  Mose  Guillory.    WM,   as  confirmed  by  OSHA,  was  an  equally  incompetent  employer/entity  who

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   1

likewise  failed  to  train  Plaintiff  Mose  Guillory  and  was  an  incompetent  employer/entity  when  it  failed  to

ensure   Texas   Workers   Compensation   Insurance   Coverage   for   Plaintiff   Mose   Guillory,   by   virtue   of   its   Staff

Leasing  Agreement  with  IWORKS.

2. U.S.   Supreme   Court   Justice   Wiley   Blount   Rutledge’s   “borderland”   of   liability   is   evidenced   in   the

legal   issues   involved   in   this   case   that   include   Contract   Law,   Employment   Law,   and   Tort   Law.

Defendants   architected   this   “borderland”   of   liability   through   their   contractual   agreements   in   an

effort   to   skirt   around   employment   obligations   that   ultimately   resulted   in   the   conduct   that

proximately   caused   PLAINTIFFS’   injuries   and   damages.     That   is,   Defendants’   contractual   agreements

were  designed  to  obscure  employment  responsibility  thereby  setting  the  stage  for  work-­‐related  accidents

without   civil   redress   to   the   victims   (Plaintiffs   herein)   and   resulting   in   an   economic   windfall   to   the

victimizer  (Defendants  herein).

3. This  is  not  a  simple  case  of  who  has  coverage  –  the  holder  of  which  entitles  that  party  or  all  parties

to  a  comp-­‐bar  defense.    Rather  and  unfortunately,  it  is  a  complicated  case.    IWORKS  Defendants  would

have   this   Court   and   our   jury   believe   that   it   is   not   responsible   for   obtaining   workers   compensation

coverage   and   not   responsible   for   training   its   leased   employees   by   virtue   of   a   contract   with   WM

Defendants   –   absolving   IWORKS   Defendants   of   any   and   all   liability.     WM   Defendants   would   have   this

Court   and   our   jury   believe   that   its   workers   compensation   coverage   policy   entitles   it   to   a   comp-­‐bar

defense   –   absolving   WM   Defendants   of   civil   liability   in   the   present   action,   so   that   WM   Defendants   can

later  deny  workers  compensation  coverage  by  pointing  to  IWORKS  Defendants’  obligation  to  secure  same

by   virtue   of   a   contract   with   IWORKS   Defendants   in  a  subsequent  action   –   absolving   WM   Defendants   of

any  and  all  liability.

4. Based   on   Defendants’   incompetence,   inter   alia,   PLAINTIFFS   hereby   bring   this   their   latest   live

pleading  and  would  respectfully  show  unto  this  honorable  Court  the  following:

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   2

II. DISCOVERY  CONTROL  PLAN

5. PLAINTIFFS   intend   to   conduct   discovery   under   Level   3   of   Texas   Rule   of   Civil   Procedure   190.4.

Given  the  introduction  of  SEATON,  L.L.C.’S  (d/b/a  STAFF  MANAGEMENT),  Defendants’  dispositive  motion

practice,  and  other  issues  concerning  discovery,  PLAINTIFFS  have  requested  discovery  under  Level  3  and

have  submitted  to  the  Court  Plaintiffs’  Proposed  Docket  Control  Order.

III. PARTIES

6. Plaintiff  MOSE  A.  GUILLORY,  an  individual,  is  a  resident  and  citizen  of  Fort  Bend  County,  Texas.

7. Plaintiff  MARY  GUILLORY,  an  individual,  is  the  wife  of  MOSE  A.  GUILLORY  and  is  a  resident  and

citizen  of  Fort  Bend  County,  Texas.

8. Defendant  IWORKS  PERSONNEL,  INC.  purports  to  be  a  Texas  corporation  organized  and  existing

under   the   laws   of   the   state   of   Texas,   whose   principal   office   is   P.O.   Box   100111,   San   Antonio,   Bexar

County,   Texas   78201-­‐1411.     Defendant   IWORKS   PERSONNEL,   INC.   has   filed   its   Answer   and   appeared

herein.

9. Defendant  WASTE  MANAGEMENT,  INC.  is  a  Texas  corporation  organized  and  existing  under  the

laws   of   the   state   of   Texas,   whose   principal   office   is   1001   Fannin,   Suite   4000,   Houston,   Harris   County,

Texas  77002.    Defendant  WASTE  MANAGEMENT,  INC.  has  filed  its  Answer  and  appeared  herein.

10. Defendant   WASTE   MANAGEMENT   OF   TEXAS,   INC.  is  a  Texas  corporation  organized  and  existing

under  the  laws  of  the  state  of  Texas,  whose  principal  office  is  1001  Fannin,  Suite  4000,  Houston,  Harris

County,   Texas   77002.     Defendant   WASTE   MANAGEMENT   OF   TEXAS,   INC.   has   filed   its   Answer   and

appeared  herein.

11. Defendant  WM  RECYCLE  AMERICA,  LLC  is  a  Texas  corporation  organized  and  existing  under  the

laws   of   the   state   of   Texas,   whose   principal   office   is   1001   Fannin,   Suite   4000,   Houston,   Harris   County,

Texas  77002.    Defendant  WM  RECYCLE  AMERICA,  LLC  has  filed  its  Answer  and  appeared  herein.

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   3

12. Defendant  LUIS  TREVINO,  an  individual,  may  be  served  with  process  at  Defendant’s  usual  place

of  abode,   217   Country   Meadow   Dr.,   Boerne,   Kendall   County,   Texas   78006.     Defendant   LUIS   TREVINO   has

filed  his  Answer  and  appeared  herein.

13. Defendant  HAYDEE  GUTIERREZ,  and  individual,  may  be  serve  with  process  at  Defendants’  usual

place   of   business,   IWORKS   PERSONNEL,   INC.,   6653   San   Pedro   Ave,   San   Antonio,   Bexar   County,   Texas

78216.    Defendant  HAYDEE  GUTIERREZ  has  filed  her  Answer  and  appeared  herein.

IV. JURISDICTION

14. This  Court  has  jurisdiction  over  the  lawsuit  because  the  District  Court’s  jurisdiction  begins  at  $500

and  has  no  upper  limits.    The  amount  in  controversy  in  this  case  is  within  the  jurisdictional  limits  of  this

court.    In  addition,  this  Court  has  jurisdiction  over  Defendants  because  Defendants  purposefully  availed

themselves  of  the  privileges  and  benefits  of  conducting  business  in  Texas  by  engaging  in  business  in  the

State  of  Texas.    Finally,  this  Court  has  jurisdiction  over  Defendants  because  Defendants  committed  torts

in   whole   or   in   part   in   Texas,   which   torts   are   the   subject   of   this   suit   and   which   are   set   forth   more   fully

below.

V. VENUE

15. Venue   is   proper   in   Harris   County,   Texas   under   Texas   Civil   Practice   &   Remedies   Code   section

15.002   because   all   or   a   substantial   part   of   the   events   or   omissions   giving   rise   to   this   suit   occurred   in

Harris   County,   Texas.     See  TEX.   CIV.   PRAC.   &   REM.   CODE   §15.002(a)(1).     That   is,   PLAINTIFFS’   injuries   and

damages  were  caused  by  Defendants’  actions  and/or  inactions  that  arose  out  of  an  incident  that  occurred

at  4939  Gasmer  Dr.,  Houston,  Harris  County,  Texas  77035.    Venue  is  proper  in  Harris  County,  Texas  under

Texas   Civil   Practice   &   Remedies   Code   section   15.002   because   one   or   more   defendant  corporations

maintain   its   principal   office   in   Harris   County,   Texas.   See   Tex.   Civ.   Prac.   &   Rem.   Code   §15.002(a)(3).

Finally,  venue  in  Harris  County,  Texas  is  proper  pursuant  to  §15.002  because  the  venue  facts  show  the

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   4

convenience  of  the  parties,  witnesses,  and  in  the  interest  of  justice,  Harris  County,  Texas  is  proper  venue.

Maintenance   of   this   action   in   Harris   County,   Texas   would   not   work   an   injustice   to   any   party   and   the

balanced  interests  of  all  parties  predominate  in  favor  of  the  action  being  brought  within  Harris  County,

Texas.

VI. NO  BASIS  FOR  REMOVAL

16. There  is  no  basis  for  removal  of  this  case  to  federal  court.    There  is  no  federal  question  at  issue

pursuant   to   28   U.S.C.   §1441(b).     There   is   no   total   diversity   of   citizenship   pursuant   to   28   U.S.C.   §1441   and

28  U.S.C.  §1332,  because  one  or  more  of  the  Defendants  is  a  citizen  of  the  state  of  Texas.     See  28  U.S.C.

§1441(b),  §1332(c).    PLAINTIFFS  are  not  asserting  any  claims  against  any  Defendant  whom  was  acting

as/under  any  officer  of  the  United  States  or  any  such  agency  thereof,  or  person  acting  under  him,  or  for

any   act   under   color   of   such   office,   or   against   any   Defendant   during   a   time   period   when   this   facility   was   a

federal  enclave.    Accordingly,  there  is  no  basis  for  removal  of  this  case  to  federal  court,  and  any  attempt

to  do  so  by  any  Defendant  will  be  met  with  an  immediate  motion  to  remand  and  a  motion  for  sanctions.

VII. EXHIBITS

17. PLAINTIFFS   hereby   incorporate   by   reference,   as   though   set   forth   fully   herein,   the   following

attached  exhibits  –  to  wit:

• EXHIBIT  A:   WM  DEFENDANTS’  Master  Agreement

• EXHIBIT  B:   Heavy  Equipment  Operator  Agreement

18. PLAINTIFFS’  exhibits  are  “written  instruments”  constituting,  “in  whole  or  in  part,”  the  claim  sued

upon,  pursuant  to  TRCP  59.

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   5

VIII. IWORKS  DEFENDANTS  &  WM  DEFENDANTS  ARE  NON-­‐SUBSCRIBER’S

TO  THE  WORKERS’  COMPENSATION  ACT

19. IWORKS   DEFENDANTS   did   not   maintain   a   workers’   compensation   insurance   policy   in   accordance

with   the   Workers’   Compensation   Act   and/or   did   not   maintain   a   workers’   compensation   insurance   policy

that  covered  MOSE  GUILLORY  at  the  time  of  the  incident,  which  failure  makes  IWORKS  DEFENDANTS  a

nonsubscriber.    TEXAS  LABOR  CODE  §408.001(a).    Because  IWORKS  DEFENDANTS  are  nonsubscribers  and

their  employee,  PLAINTIFF  MOSE  GUILLORY,  was  injured  on  the  job  and  by  their  negligence  and/or  gross

negligence,   the   Workers’   Compensation   Act   does   not   shield   IWORKS   DEFENDANTS   from   suit.     See  TEX.

LAB.  CODE  §§406.033,  408.001

20. Upon   information   and   belief,   WM   DEFENDANTS   did   not   maintain   a   workers’   compensation

insurance   policy   in   accordance   with   the   Workers’   Compensation   Act,   did   not   maintain   a   workers’

compensation   insurance   policy   that   covered   MOSE   GUILLORY,   and/or   cannot   claim   “subscriber”   status

under   Texas   law   at   the   time   of   the   incident,   which   failure   makes   WM   DEFENDANTS   a   nonsubscriber.

TEXAS   LABOR   CODE   §408.001(a).     Because   WM   DEFENDANTS   are   nonsubscribers   and   their   employee,

PLAINTIFF  MOSE  GUILLORY,  was  injured  on  the  job  and  by  their  negligence  and/or  gross  negligence,  the

Workers’  Compensation  Act  does  not  shield  WM  DEFENDANTS  from  suit.    See   TEX.  LAB.  CODE  §§406.033,

408.001.

21. Additionally,   by   virtue   of   being   nonsubscribers,   IWORKS   DEFENDANTS   and   WM   DEFENDANTS

are   precluded   from   asserting   the   following   defenses   in   answering,   responding,   or   defending   this

lawsuit:  (1)  contributory  negligence;  (2)  assumption  of  the  risk;  (3)  negligence  of  a  fellow  employee;

and  (4)  pre-­‐injury  waiver  of  liability.  See  TEX.  LAB.  CODE  §406.033(a),  (e).

IX. FACTS

22. LEGAL   ISSUES   INVOLVED   –   BACKGROUND.     The   legal   issues   involved   in   this   case   include

Contract  Law,  Employment  Law,  and  Tort  Law.     A  brief  historical  analysis  of  the  interplay  of  these  legal

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   6

issues   is   important   in   understanding   Defendants’   motivation   and   Defendants’   “borderland”   of   liability.

Employment   law   looks   at   “Who   is   the   Employee?”   and   “Who   is   the   Employer?”   –   the   latter   of   which   is

critical   in   assessing   who   is   responsible   for   employment   benefits   under   various   federal   and   state

employment  laws  (e.g.  worker  misclassification  –  where  the  misclassification  or  wrongful  classification  of

an   employee   as   a   “contractor”   would   essentially   deny   an   employee   of   most   federal   employment   law

benefits   –   collective   bargaining   for   example 1 ) 2 .     Although   seemingly   simple,   determining   this

“employment   relationship”   is   often   times   difficult,   under   the   law3.     In   determining   this   “employment

relationship,”  employers  have  taken  great  strides  in  blurring  the  lines  of  the  employment  relationship  in

an   effort   to   operate   outside   federal   and   state   employment   laws   –   to   operate   in   the   “borderland”4  of

liability.    The  objective  is  obvious   –  when  the  employment  relationship  is  unclear,  employment  rights  are

unclear5;   and,   as   a   result,   a   financial   windfall   is   reaped   by   the   employer   who   blurred   the   lines6.     This

1  http://mynlrb.nlrb.gov/link/document.aspx/09031d4580022ea1

2  See   WHD  News  Release  11-­‐1373-­‐NAT,  Labor  Secretary,  IRS  Commissioner  Sign  Memorandum  of  Understanding  to  Improve

Agencies’  Coordination  on  Employee  Misclassification  Compliance  and  Education  (Sept.  19,  2011).  Deputy  Secretary  of  Labor

Seth  Harris  explained  the  significance  of  the  problem  of  worker  misclassification  in  his  testimony  before  Congress:

“Misclassification”   seems   to   suggest   a   technical   violation   or   a   paperwork   error.   But   “worker

misclassification”   actually   describes   workers   being   illegally   deprived   of   labor   and   employment   law

protections,   as   well   as   public   benefits   programs   like   unemployment   insurance   and   workers’

compensation   because   such   programs   generally   apply   only   to   “employees”   rather   than   workers   in

general.   .   .   .   Misclassification   is   no   mere   technical   violation.   It   is   a   serious   threat   to   workers   and   the   fair

application  of  the  laws  Congress  has  enacted  to  assure  workers  have  good,  safe  jobs.

Leveling   the   Playing   Field:   Protecting   Workers   and   Businesses   Affected   by   Misclassification   Before   the   S.   Comm.   On   Health,

Education,  Labor  and  Pensions,  111th  Cong.  (2010)  (statement  of  Seth  Harris,  Deputy  Sec’y  of  Labor).

3  The   Supreme   Court,   for   example,   has   referred   to   the   definition   of   an   employee   under   the   Americans   with   Disabilities   Act   as   a

“mere   ‘nominal   definition,’”   Clackamas   Gastroenterology   Assocs.   v.   Wells,   538   U.S.   440,   444   (2003),   and   has   stated   that   the

definition  of  an  employee  under  the  Employee  Retirement  Income  Security  Act  is  “completely  circular  and  explains  nothing,”

Nationwide  Mut.  Ins.  Co.  v.  Darden,  503  U.S.  318,  323  (1992).

4  See  NLRB  v.  Hearst  Publ’ns,  Inc.,  322  U.S.  111,  121  (1944)  (quoting  U.S.  Supreme  Court  Justice  Wiley  Blount  Rutledge).

5  See  Mitchell   H.   Rubinstein,   Our  Nation’s  Forgotten  Workers:  The  Unprotected  Volunteers,   9   U.   OF   PA.   J.   LAB.   &   EMP.   L.   147,   151

(2006)  (citing  Seattle  Opera  v.  NLRB,  292  F.3d  757,  759  (D.C.  Cir.  2002))  (holding  that  an  individual  was  an  employee  under

NLRA  even  though  he  was  not  paid  the  minimum  wage  and  did  not  receive  tax  form  W-­‐2);  see  also  Hopkins  v.  Cornerstone  Am,

545   F.3d   338,   347   (5th   Cir.   2008)   (stating   that   it   is   not   inconsistent   to   be   considered   an   employee   under   the   FLSA,   but   an

independent   contractor   under   other   statutes);   City  Cab  Co.  of  Orlando,   285   N.L.R.B.   1191,   1193   (1987)   (holding   that   employee

status  determinations  of  other  governmental  agencies  are  not  controlling,  but  should  be  given  consideration  by  the  NLRB);  see

BWI  Taxi  Mgmt,  No.  5-­‐RC-­‐4836874,  2010  WL  4836874,  at  *9  n.15  (NLRB  Reg.  Dir.  Sept.  16,  2010)  (stating  that  the  petitioner

received  a  letter  saying  he  was  an  independent  contractor  under  the  EEOC,  but  was  considered  an  employee  under  the  NLRA);

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   7

financial   windfall   and   danger   to   the   American   worker   has   seen   its   greatest   rise   in   the   “contingent

workforce”  and  in  recent  years  –  to  wit:

• U.S.  Labor  Department  reports  that  in  2013,  the  nation  had  more  temp  workers  than  ever

before:  2.7  million    temp  workers  in  U.S.7.

• Since  the  recession  ended  in  mid-­‐2009,  20%  of  job  growth  has  been  the  temp  sector8.

• Temp  work  is  roaring  back  10x  faster  than  private-­‐sector  employment9.

• On  average,  temps  earn  25%  less  than  permanent  workers.

• African   Americans   make   up   11%   of   the   overall   workforce   but   20%   of   the   temp

workforce.

• U.S.  Government  does  not  keep  statistics  on  injuries  among  temp  workers.

• Study   shows   that   temp   workers   in   construction   and   manufacturing   were   2x   as   likely   to   be

injured  as  regular  staff  doing  the  same  work10.

• OSHA   announced   an   initiative   to   get   better   information   on   temp-­‐worker   safety   –   stating:

“Employers,  we  think,  do  not  have  the  same  commitment  to  providing  a  safe  workplace,

to   providing   the   proper   training,   to   a   worker   who   they   may   only   be   paying   for   a   few

weeks…    I  mean,  we’ve  seen  just  ghastly  situations.11”

• Adding  to  the  “Who  is  the  Employer”  confusion  -­‐  33  states  have  statutes  or  regulations

that   address   employee   leasing   and   its   effect   on   which   entity   is   the   actual   employer,

while  17  states  and  the  District  of  Columbia  make  such  decisions  by  Court  opinions.

Seattle   Opera,   292   F.3d   at   761–62   (holding   individual   was   an   employee   even   though   he   was   treated   as   an   independent

contractor   for   tax   purposes   in   that   he   did   not   receive   a   W-­‐2   tax   form).     See  also  Richard   R.   Carlson,   Why  the  Law  Still  Can’t  Tell

an  Employee  When  It  Sees  One  and  How  It  Ought  to  Stop  Trying,  22  BERKELEY  J.  EMP.  &  LAB.  L.  295,  296  (2001)  (describing

statutory  definitions  of  employee  status  as  “baffling”).

6  It   has   been   estimated   that   classifying   individuals   as   independent   contractors   instead   of   as   employees   might   result   in   a

savings  of  twenty  to  forty  percent  of  labor  costs  to  the  quasi-­‐employer.    See  Jenna  Amato  Moran,  Note,   Independent  Contractor

or  Employee?  Misclassification  of  Workers  and  Its  Effect  on  the  State,  28  BUFF.  PUB.  INT.  L.J.  105,  121  (2010).

7  See  http://www.bls.gov/news.release/empsit.t17.htm

8  Id.

9  American  Staffing  Association

10  http://www.ncbi.nlm.nih.gov/pubmed/19618410

11  http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=23994   (quoting   David

Michaels,  OSHA  Director).

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   8

• Recently,   temp   firms   have   successfully   lobbied   to   change   laws   or   regulatory

interpretations  in  31  states,  so  that  workers  who  lose  their  temp  assignments  and  are

out  of  work  cannot  get  unemployment  benefits12.

As  is   clear,  the   “contingent   workforce”   is   larger   than   ever   at   2.7   million   temp   workers,   growing   ten   times

faster   than   private   sector   employment,   and   is   made   up   of   minorities   whom   earn   a   quarter   less,   get

injured  twice  as  much,  and  are  less  likely  to  understand  or  be  able  to  exercise  their  employment  rights

under  the  law.    That  is,  cases  like  Plaintiffs’  case  are  expected  to  rise  with  this  horrific  trend.    Applying  the

above   to   the   case   at   bar,   it   is   no   wonder   the   incident   involving   Plaintiff   Mose   Guillory   happened

necessitating  this  lawsuit.

23. PLAINTIFFS.     Plaintiffs   complain   of   Defendants   IWORKS   DEFENDANTS   and   WM   DEFENDANTS,

for   their   actions   and   inactions,   both   singularly,   in   combination,   and/or   collectively,   for   breaching   their

duties  of  safety,  safety  training,  and  workers’  compensation  coverage/compliance  to  and  for  the  benefit

of  Plaintiff  Mose  Guillory,  inter  alia,  which  breaches  proximately  caused  Plaintiffs’  damages,  as  set  forth

more  fully  below.

24. IWORKS   DEFENDANTS.     Defendant   IWORKS   PERSONNEL,   INC.   is   owned   and   operated   by   LUIS

TREVINO  and  HAYDEE  GUTIERREZ.    IWORKS  PERSONNEL,  INC.  is  in  the  business  of  leasing  employees

for   skilled   jobs   in   many   different   industries,   including   but   not   limited   to:   “construction,   manufacturing,

warehousing,   retail,   events   and   hospitality,   waste,   recycling,   transportation,   and   disaster   relief.”     See

http://www.iworkspersonnel.com.    Regarding  the  type  of  services  provided  to  its  leased  employees  and

to  client  companies,  Defendant  IWORKS  PERSONNEL,  INC.  also  states  the  following  –  to  wit:

How  does  iWORKS  PERSONNEL  help  solve  your  people  issues?

***

*     We  offer  free  Basic  PPE  (Personal  Protective  Equipment)

*     Basic  Safety  Training  (not  site  specific)

12  http://www.workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2013/nonmonetary.pdf

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   9

*     WE  PAY  ALL  PAYROLL  TAXES  and  file  them

*     WE  PAY  ALL  UNEMPLOYMENT  TAXES  and  file  them

*     WE  PROVIDE  WORKERS  COMPENSATION

*     WE  PROVIDE  1  worker  or  hundreds,  for  the  day  or  as  long  as  you  need  them

(minimum  4  hours)

See  http://iworkspersonnel.com/clientsolution.aspx  (emphasis  added).    As  is  clear,  in  addition  to

supplying  client  companies  with  leased  employees  or  temporary  workers,  IWORKS  DEFENDANTS  also

have  the  duty  and  responsibility  to  provide  worker’s  compensation.

25. WM  DEFENDANTS.    Defendants  WASTE  MANAGEMENT,  INC.,  WASTE  MANAGEMENT  OF  TEXAS,

INC.,  and  WM  RECYCLE  AMERICA,  LLC  are  hereinafter  sometimes  referred  to  as  “WASTE  MANAGEMENT”

or   “WM   DEFENDANTS.”     Upon   information   and   belief,   WASTE   MANAGEMENT,   INC.   is   a   holding   company

and  WASTE  MANAGEMENT  OF  TEXAS,  INC.  and  WM  RECYCLE  AMERICA,  LLC  are  its  subsidiaries,  which

operate   Defendants   WASTE  MANAGEMENT’s   Facility   at   4939   Gasmer   Dr.,   Houston,  Harris   County,   Texas

77035   (“Facility”)   and   which   provide   collection,   transfer,   recycling,   and   disposal   services,   under   the

direction  and  control  of  Defendant  WASTE  MANAGEMENT,  INC.    WM  DEFENDANTS  claim  the  following

about  itself  as  a  corporation(s)  and  about  its  safety  policies  –  to  wit:

Waste  Management  is  the  largest  environmental  solutions  provider  in  North  America,

serving   more   than   20   million   customers   in   the   U.S.,   Canada   and   Puerto   Rico….     As   North

America’s  largest  residential  recycler,  we  expect  to  manage  more  than  20  million  tons

every  year  by  2020,  up  from  the  more  than  12  million  tons  we  handled  in  2012.

See  http://www.wm.com/about/index.jsp  (emphasis  added).

At   Waste   Management,   safety   is   a   core   value   and   a   cornerstone   of   operational

excellence.  This  philosophy  is  embedded  in  the  way  we  work,  the  decisions  we  make  and

the  actions  we  take….    Our  plan  of  action  is  called  Mission  to  Zero  (M2Z),  which  means  zero

tolerance   for   unsafe   actions,   unsafe   decisions,   unsafe   conditions,   unsafe   equipment

and   unsafe   attitudes.     The   cornerstone   of   M2Z   is   training,   which   provides   classroom

and   on-­‐the-­‐job   site   instruction   in   safety   fundamentals   for   supervisors,   drivers   and

helpers.   Operations   Rule   Book,   Driving   Science   Series   videos   and   Electronic   Observation

Behavior  Assessments  are  just  a  few  of  the  tools  available  to  our  frontline  managers  to  help

them   to   develop   our   employees….     Waste   Management   sites   continuously   monitor   and

measure   safety   performance….     Through   established   safety   processes   and   procedures,

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   10

our  goal  of  zero  accidents  and  injuries  is  transformed  into  measurable  results  that  have  a

positive  impact  on  thousands  of  people.

See  http://investors.wm.com/phoenix.zhtml?c=119743&p=irol-­‐govhighlights  (“Safety  Policy”  download)

(emphasis  added).    As  is  clear,  WM  DEFENDANTS,  combined,  are  a  large  corporation  who,  given  its  size

and  breadth,  recognize  their  duty  and  responsibility  to  provide  safety,  training,  and  monitoring  of  safety

and  training.

26. DEFENDANTS’   Relationships.     At   all   times   material   hereto,   DEFENDANTS   entered   into

contractual   agreements   and   relationships   with   one   another   for   the   performance   of   their   duties,   as   it

pertains   to   Plaintiff  Mose  Guillory,  which  contractual  agreements  were  entered  into  prior  to  July  9,  2012.

See  Exhibit   A  (WM  DEFENDANTS’  Master  Agreement  with  IWORKS  DEFENDANTS)  and  Exhibit   B  (Heavy

Equipment  Operator  Agreement  between  WM  DEFENDANTS  and  IWORKS  DEFENDANTS).

27. Plaintiff   Mose   Guillory   –   Employed   by   IWORKS   DEFENDANTS   and   Leased   to   WM

DEFENDANTS.    On  or  about  the  morning  of  July  9,  2012,  Plaintiff  MOSE  GUILLORY  applied  for  a  job  at

IWORKS’s   Houston,   Texas   office.     Shortly   after   filling   out   an   application   at   IWORKS’s   Houston,   Texas

office,  PLAINTIFF  MOSE  GUILLORY  received  a  call  from  IWORKS,  wherein  IWORKS  informed  PLAINTIFF

MOSE   GUILLORY   that   he   was   hired   and   that   he   was   being   assigned   to   WASTE   MANAGEMENT   at   its

facility  located  at  4939  Gasmer  Dr.,  Houston,  Harris  County,  Texas  77035  (“Facility”  or  “Gasmer  MRF”).

28. MOSE   GUILLORY   was   leased   to   Gasmer   MRF   to   perform   tasks   involving   “a   particular   skill;   .   .   .

training   in   a   particular   occupation,   craft,   or   trade;   .   .   .   or   practical   knowledge   of   the   principles   or

processes  of  an  art,  science,  craft,  or  trade.”  See  Tex.  Lab.  Code  §92.002(3)(a)-­‐(c).

29. Plaintiff   Mose   Guillory   –   Employed   by   WM   DEFENDANTS.    At  or  around  12:00  pm  on  July  9,

2012,   Plaintiff   MOSE   GUILLORY   reported   to   the   WASTE   MANAGEMENT   Facility   where   he   was   instructed

to   drive   a   front-­‐end   loader   while   a   maintenance   employee,   Abraham   Hernandez,   observed.     After   a   short

demonstration,   Abraham   Hernandez   was   satisfied   that   PLAINTIFF   MOSE   GUILLORY   had   the   requisite

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   11

skill  to  drive  and  operate  the  front-­‐end  loader  at  WASTE  MANAGEMENT  and  instructed  PLAINTIFF  MOSE

GUILLORY  to  report  for  work  the  next  morning  –  July  10,  2012.

30. For   the   first   week   of   his   employment,   from   roughly   July   10,   2012—July   16,   2012,   PLAINTIFF

MOSE   GUILLORY   worked   on   the   day   shift   at   WASTE   MANAGEMENT’s   Facility.     This   shift   was   from

approximately   5:00   a.m.   until   4:30   p.m.,   approximately   seven   days   per   week.     During   that   time,

PLAINTIFF   MOSE   GUILLORY’S   primary   job   duty   was   to   drive   and   operate   a   front-­‐end  loader.    Thereafter,

approximately   one   or   two   weeks   after   starting   work   at   WASTE   MANAGEMENT’s   Facility,   PLAINTIFF

MOSE  GUILLORY  was  re-­‐scheduled  to  work  the  night  shift  from  4:30  p.m.  until  5:00  a.m.

31. Upon   joining   the   night   shift   and   sometime   thereafter,   PLAINTIFF   MOSE   GUILLORY   was   instructed

to  operate  a  Harris  Centurion  Baler.

32. Harris  Baler.    The  product  in  question,  a  Harris   Centurion  Baler,  is  a  piece  of   “heavy  equipment”

or  industrial  machinery  used  in  recycling  facilities  primarily  for  baling  metal,  plastic,  cardboard,  or  paper

for   transport.     The   product   is   designed   to   operate   in   the   following   manner:   the   user   stands   on   a   platform

in  front  of  a  control  port  and  activates  a  conveyor  belt  that  carries  loose  product  (paper,  plastic,  metal,

etc.)   into   the   baler;   then,   the   user   engages   the   baler’s   hydraulic   rams,   which   compresses   the   material

loaded  into  compact,  transportable  bales.

33. The   Harris   Baler   is   sold   with   a   25-­‐minute   training   video   that   addresses   safety   and   a   200-­‐page

“Operator/Service   Manual”   that   must   be   read   and   understood   before   operation.     Before   operating   the

Harris   Centurion   Baler,   one   must   have   received   OSHA-­‐mandated   “Lockout-­‐Tagout”   (“LOTO”)   training.

See   29   C.F.R.   1910.147.   LOTO   requires   that   hazardous   power   sources   be   “isolated   and   rendered

inoperative”  before  any  maintenance  or  servicing  work  is  performed  to  prevent  serious  injury  or  death.

34. No   Training   on   the   Harris   Baler.     At   no   point   was   PLAINTIFF   MOSE   GUILLORY   shown   any

training   video   detailing   how   to   safely   operate   the   Harris   Baler.     At   no   point   was   PLAINTIFF   MOSE

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   12

GUILLORY  told  about  or  given  any  operator’s  manual  detailing  how  to  safely  operate  the  Harris  Baler.    At

no   point   was   PLAINTIFF   MOSE   GUILLORY   given   any   training   or   exposed   to   any   material   whatsoever,

whether   in   audio,   video,   written,   electronic,   or   other   format,   detailing   how   to   safely   operate   the   Harris

Baler.     At   no   point   was   PLAINTIFF   MOSE   GUILLORY   provided   any   OSHA-­‐mandated   “Lockout-­‐Tagout”

(“LOTO”)  training.    See  29  C.F.R.  1910.147.

35. No   Training   on   the   Harris   Baler   -­‐   Carlos.     Instead,   the   full   extent   of   PLAINTIFF   MOSE

GUILLORY’S   “training”   (which   Plaintiffs   dispute)   was   observations   from   a   coworker   named   Carlos.

Carlos   is   a   Hispanic   man   whose   first   language   is   Spanish.     Carlos   cannot   fluently   speak   or   understand

English   well.     PLAINTIFF   MOSE   GUILLORY’S   first   language   is   English.     PLAINTIFF   MOSE   GUILLORY

cannot   speak   or   understand   Spanish.   Regardless,   Carlos   demonstrated   that,   at   certain   times,   the   baler

operator  must  disengage  the  baler,  climb  onto  the  conveyor,  walk  up  to  the  top  of  the  conveyor  near  the

baler  mouth,  and  use  a  pole  to  sweep  product  down  onto  the  conveyor  belt  from  various  bins  adjacent  to

the  baler.    Little  more  was  provided  to  PLAINTIFF  MOSE  GUILLORY  on  how  to  safely  operate  the  Harris

Baler.     And,   at   no   time   did   Carlos   ever   instruct   PLAINTIFF   MOSE   GUILLORY   on   proper   OSHA

Lockout/Tagout  procedures.

36. August  5,  2012   –  Incident  at  Issue.    On  August  5,  2012,  PLAINTIFF  MOSE  GUILLORY  reported  for

work   on   the   night   shift   and   began   to   operate   the   Harris   Baler,   as   instructed.     At   that   time,   PLAINTIFF

MOSE  GUILLORY  had  only  operated  the  Harris  Baler  approximately  three  to  four  times  total.     Sometime

after  beginning  to  operate  the  Harris  Baler,  PLAINTIFF  MOSE  GUILLORY  disengaged  the  baler/conveyor

and  climbed  onto  the  conveyor  and  then  into  the  baler,  as  he  had  seen  Carlos  do  before.    Suddenly,  and

without   warning,   the   Harris   Baler   turned   on   and   the   baler   rams   engaged.     The   baler   rams   severed

PLAINTIFF  MOSE  GUILLORY’S  right  leg  just  below  the  knee  and  severed  all  toes  and  a  portion  of  his  left

foot.

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   13

37. Plaintiff  Mose  Guillory  –  Hospitalized.    PLAINTIFF  MOSE  GUILLORY  was  taken  by  ambulance  to

Memorial   Hermann   Hospital   in   the   Houston   Medical   Center.     There,   PLAINTIFF   MOSE   GUILLORY

underwent  multiple  surgeries  lasting  several  hours.    These  surgeries  were  required  to  complete  the  full

amputation   of   PLAINTIFF   MOSE   GUILLORY’S   right   leg   below   the   knee   as   well   as   all   toes   and   a   portion   of

his  left  foot.    As  a  result  of  the  aforementioned  events,  Plaintiff  MOSE  GUILLORY  was  hospitalized  for

roughly  seventeen  (17)  days.

38. While   in   the   hospital   and   while   in   ICU,   PLAINTIFF   MOSE   GUILLORY   was   heavily   medicated.

During   this   time,   he   was   approached   by   agents   of   IWORKS   whom   presented   him   with   various   papers,

authorizations,  and/or  releases  to  obtain  information  without  his  informed  consent.    In  an  incapacitated

state,   PLAINTIFF   MOSE   GUILLORY   signed   documents   for   IWORKS   DEFENDANTS   and/or   WM

DEFENDANTS.

39. IWORKS  and  WM  DEFENDANTS’  Cover-­‐Up.    Upon  information  and  belief  following  the  incident,

IWORKS   DEFENDANTS   and   WM   DEFENDANTS   took   steps   to   cover   up   the   incident   including,   among

others,  firing  employees,  which  former  employees  have  advised  counsel  for  PLAINTIFFS  that  Defendant

WASTE  MANAGEMENT  is  and  was  taking  steps  to  cover  up  the  incident.

40. iWorks   did   not   think   it   was   iWorks’   obligation   to   train   employees   before   sending   them   to   Gasmer

MRF.     iWorks   claims   it   did   not   know   WM   DEFENDANTS   were   expecting   it   (IWORKS)   to   train.     WM

DEFENDANTS   did   not   know   that   iWorks   was   not   training   or   qualifying   employees   it   (IWORKS)   was

sending   over.     Accordingly,   WM   DEFENDANTS   did   not   train.     Instead,   due   to   the   break   down   in

communications,   Mose   Guillory   received   zero   training   from   either   iWorks   or   WM   DEFENDANTS.     In   fact,

the  failure  to  train  Mose  Guillory  on  lock-­‐out/tag-­‐out  (“LO/TO”)  and  to  ensure  that  he  did  not  operate  the

Harris   Baler   without   proper   LO/TO   training   resulted   in   violations   of   OSHA   regulations   and   hefty   fines

imposed  on  the  site  owner,  WM  DEFENDANTS.

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   14

41. As   further   evidence   of   the   communication   (“conduit”)   breakdown,   Plaintiffs   offer   the   deposition

testimony  Defendant  LUIS  TREVINO,  CEO  and  part  owner  of  iWorks.    Mr.  Trevino  testified,  inter  alia,  that

Defendant  iWorks  “[does  not]  provide  site-­‐specific  training.”    Mr.  Trevino  then  unequivocally  stated  the

following:

p.  69

18.  Q.  You  don't.  So  if  -­‐-­‐  if  Waste  Management  or

19  somebody  at  Gasmer  had  given  y'all  a  DVD  of

20  site-­‐specific  training  to  provide  to  iWorks  employees

21  who  are  temporary  laborers  and  going  out  there,  then  you

22  wouldn't  have  done  it?

23  MR.  GARZA:  Objection,  form.

24  A.  We  never  received  one,  nor  would  I  have  played

25  it.

Next,   LUIS   TREVINO   was   asked   about   iWorks’s   obligation   under   the   “Master   Services   Agreement”

executed  between  iWorks  and  WM  Defendants  –  to  wit:

p.  70

16  Q.  "Contractor  is  obligated  to  ensure  that

17  Personnel  supplied  to  Waste  Management  are  fully

18  qualified  and  trained  for  the  jobs  they  are  being

19  supplied  to  perform  and  they  have  been  given  safety

20  training  that  meets  or  exceeds  the  training  Waste

21  Management  provides  to  its  employees  for  the  same  or

22  similar  jobs."

23  Okay.  So  you're  telling  me  that  that  is

24  not  something  that  you  did  with  any  of  the  workers  that

25  were  sent  to  Waste  Management.

p.  71

1  A.  I  don't  know  Waste  Management  policy  and

2  procedure.  How  could  I  train  them  on  Waste  Management

3  policy  or  procedure,  safety  rules,  machinery[?]

4  Q.  Okay.  But  if  -­‐-­‐  but  if  that  information  had

5  been  provided  to  you  or  provided  to  the  folks  in  the

6  field  in  Houston,  then  they  should  have  done  that,

7  right?

8  A.  It  wasn't  provided,  and  I  would  not  have  done

9  it.

PLAINTIFFS’  FIFTH  AMENDED  PETITION  &  REQUESTS  FOR  DISCLOSURE   15

42. As  further  evidence  of  the  communication  (“Conduit”)  breakdown,  Plaintiffs  offer  the  deposition

testimony   Steve   Hasley,   former   Recycling   Director   of   WM   DEFENDANTS.   On   the   issue   of   training   and

safety,  Steve  Hasley  directly  contradicts  the  testimony  of  Luis  Trevino  –  to  wit:

p.  86

1                A.      Yes.

2                Q.      Okay.    Is  there  any  document  that  identifies  that

3      this  training  topic,  everything  that's  above  Environmental

4      Protection  Orientation  Training,  was  to  be  conducted  by  the

5      temp  agency?

6                A.      I  have  not  seen  one.

7                Q.      Okay.

8                A.      That  was  supposedly  in  the  contract.    But  I've

9      never  seen  the  contract.    So  I  don't  -­‐-­‐  I  can't  say  for

10      sure.

11                Q.      And  what  contract  are  you  speaking  of?

12                A.      The  contract  that  Staff  Management  had  with  the

13      temp  labor  provider.

14                Q.      Why  would  Waste  Management  allow  someone  else  to

15      perform  this  orientation  training?

16                                    MS.  SCHADLE:    Objection;  form.

17                A.      Well,  it  all  -­‐-­‐  it  all  depends  on  the  site  and

18      what  you  got  going.    If  you  got  a  lot  of  employees  and

19      you're  bringing  in  a  lot  of  employees,  then  it  does  relieve

20      the  burden  off  the  -­‐-­‐  the  management  at  the  site,  the

21      supervision  to  have  to  sit  down  for,  you  know,  two  hours  to

22      go  through  this  DVD  and  discussion  and  all  that  kind  of

23      thing.    And  that's  why  it's  done  at  some  sites  like  that,

24      why  the  temp  labor  provider  does  it.

25                Q.      (BY  MR.  GILDE)  Can  you  identify  all  the  sites  in

p.  87

1      Texas  where  the  temp  laborer  provider  performs  this

2      training?

3                                    MS.  SCHADLE:    Objection;  form.

4                A.      I  don't  know  all  of  them.    I  know  that  they  do  it

5      at  Arlington  and  I  know  that  they  do  it  at  -­‐-­‐  at  Brittmoore.

6                Q.      (BY  MR.  GILDE)  At  Brittmoore?

7                A.      Yes.

8                Q.      And  also  at  Gasmer?

9                A.      I  think  -­‐-­‐  yes,  I  think  they  do  it  at  Gasmer,  too.

10                Q.      Okay.    Anywhere  else?

11                                    MS.  SCHADLE:    Objection;  form.

12                A.      Not  that

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