# Rosendo Morales v. Texas Department of Insurance-Division of Workers' Compensation, and Commissioner Ryan Brannan, in His Official Capacity > Texas Court of Appeals, 3rd District (Austin) · May 27, 2015 URL: https://www.frixlaw.com/law-library/cases/4066810 ## Case - **Court:** Texas Court of Appeals, 3rd District (Austin) - **Decided:** May 27, 2015 - **Precedential status:** Published - **Opinion:** Opinion - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4066810 ## Opinion text ACCEPTED 03-14-00808-CV 5443753 THIRD COURT OF APPEALS AUSTIN, TEXAS 5/27/2015 9:45:13 PM JEFFREY D. KYLE CLERK No. 03-14-00808-CV FILED IN IN THE 3RD COURT OF APPEALS 3rd COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 5/27/2015 9:45:13 PM JEFFREY D. KYLE Clerk Rosendo Morales, Appellant V. Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Ryan Brannan, in his official capacity, Appellees On appeal from the 146th District Court of Bell County, Texas; Cause No. 269,135-B, the Honorable Jack Weldon Jones Presiding ROSENDO MORALES APPELLANT’S BRIEF BRADLEY DEAN McCLELLAN State Bar No. 13395980 Richard Pena Law Offices of Richard Pena, P.C State Bar No. 00000073 Law Offices of Richard Pena, P.C. 1701 Directors Blvd., Suite 110 Austin, Texas 78744 Brad.McClellan@yahoo.com (512) 327-6884 telephone (512) 327-8354 facsimile Counsel for Appellant May 27, 2015 Oral Argument Requested IDENTITY OF PARTIES & COUNSEL PLAINTIFF/APPELLANT: P.O. Box 12548 (MC-018), Capital Rosendo Morales c/o Station Law Offices of Richard Pena, P.C. Austin, Texas 78711-2548 1701 Directors Blvd. 512-475-4208 Austin, Texas 78744 512-320-0167 facsimile. Addrienne.butcher@texasattorneyge TRIAL AND APPELLATE ATTORNEY neral.gov FOR PLAINTIFF: Attorneys for DWC and Bradley Dean McClellan Commissioner State Bar No. 13395980 Richard Pena OTHER DEFENDANT BELOW: Law Offices of Richard Pena, P.C Texas Mutual Insurance Company, State Bar No. 00000073 the Insurance Carrier 1701 Directors Blvd. Suite 110 c/o Austin, Texas 78744 Scott Placek Brad.McClellan@yahoo.com Matthew Foerster Fax 512.327.8354 Arnold & Placek, LLC Telephone 512.327.6884 203 East Main Ave, Ste. 203 Round Rock, TX 78664 Fax: 512 341.7121 DEFENDANT/APPELLEE: Attorneys for Defendant Texas Department of Insurance – TMIC Division of Workers' Compensation, DWC, a governmental unit organized and existing under the law of the State of Texas, and Commissioner Ryan Brannan, in his official capacity 7551 Metro Center Drive, Suite 100 Austin, TX, 78744 Attorneys for DWC and Commissioner: Adrienne Butcher, Assistant Attorney General Administrative Law Division Office of the Attorney General of Texas ii No. 03-14-00808-CV Rosendo Morales Appellant’s Brief TABLE OF CONTENTS TABLE OF AUTHORITIES iv-vi IDENTITY OF PARTIES & COUNSEL ii STATEMENT OF THE CASE vii ISSUES PRESENTED ix ROSENDO MORALES APPELLANT’S BRIEF 1 SUMMARY OF ARGUMENT 6 STATEMENT OF FACTS 3 ARGUMENT & AUTHORITIES 10 Issue No. 1: Whether the District Court has jurisdiction to determine a declaratory judgment action brought to properly construe, interpret, and enforce applicable Texas statutes against the state agency and the head of the state agency after administrative remedies have been exhausted and a live controversy remains with allegations that the state defendants have violated the statutes in question by failing to properly apply the law? 10 CONCLUSION 43 PRAYER 44 CERTIFICATE OF COMPLIANCE 46 CERTIFICATE OF SERVICE 46 APPENDIX 47 iii No. 03-14-00808-CV Rosendo Morales Appellant’s Brief INDEX OF AUTHORITIES Cases Beacon Nat 'I Ins. Co. v. Montemayor, 86 S.W.3d 260, 267 (Tex. App.-Austin 2002, no pet.) .................................................................................................................... 30 Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex. 2000) ................ 33 Brooks v. Northglen Ass'n, 141 S.W.3d 158, 163 (Tex. 2004) ..................... 10, 18 Calvert v. Employees Ret. Sys. of Tex., 648 S.W.2d 418, 419 (Tex. App.-- Austin 1983, writ ref'd n.r.e.) ..................................................................................... 34 Campos v. Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 230 (Tex. App.—Austin 2009, no pet.) ....................................................................................... 17 City of El Paso v. Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009) .................... 12 City of McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102, 112 (Tex. App.—Dallas 2013, no pet.) ........................................................................................ 12 Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 712 (1945)...................... 35 Harvel v. Tex. Dep't of Ins.-Div. of Workers' Comp., 13-14-00095-CV, 2015 Tex. App. LEXIS 5159, 2015 WL 2452703 (Tex. App. Corpus Christi--May 21, 2015, motion for rehearing to be filed) .......................................................... 12 Hawkins v. El Paso First Health Plans, Inc., 214 S.W.3d 709, 716-18 (Tex. App.--Austin 2007, pet. filed). ..................................................................................... 35 Houston General Insurance Co. v. Association Casualty Insurance Co., 977 S.W.2d 634 (Tex. App.—Tyler, no pet.) .................................................................. 43 Howell v. Texas Workers' Compensation Com'n, 143 S.W.3d 416, 433 (Tex. App.--Austin 2004, pet. denied). ................................................................................ 43 Kuntz v. Khan, No. 03-10-00 160-CV, 2011 Tex. App. LEXIS 446, 2011 WL 182882,(Tex. App.--Austin 2011, no pet.) ............................................................ 30 Mid-Century Insurance Company v. Texas Workers’ Compensation Commission, 187 S.W.3d 754 (Tex. App.—Austin 2006, no pet.). ............... 39 Nat'l Am. Ins. Co. and TDI-DWC and Commissioner Bordelon in his official capacity v. Tex. Prop. & Cas. Ins. Guar. Ass'n, No. 03-09-00680-CV, 2013 WL 4817637, 2013 Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.) ................................................................................................................ 8, 18 Nat'l Am. Ins. Co. v. Tex. Prop. & Cas. Ins. Guar. Ass'n for Paula Ins. Co., 2013 Tex. App. LEXIS 10865, 2013 WL 4817637 (Tex. App.--Austin Aug. 28, 2013, no pet.) .................................................................................................................... 35 Roal Global Corp. v. City of Dallas, 2015 Tex. App. LEXIS 5205 (Tex. App. Dallas--May 21, 2015, no pet. h.) .............................................................................. 12 iv No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Severiano DeLeon v. Royal Indemnity Company, 396 S.W.3d 597 (Tex. App.-- Austin 2010) rev’d on other grounds Severiano DeLeon v. Royal Indem. Co., 396 S.W.3d 527 (Tex. 2012) ........................................................................ 25, 26 Spawglass Constr. Corp. v. City of Houston, 974 S.W.2d 876, 878 (Tex. App.-- Houston [14th Dist.] 1998, pet. denied) .................................................................. 34 Subchapter F of Chapter 410 .......................................................................................... 16 Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993) .. 32 Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004) 32 Tex. DOT v. Sefzik, 355 S.W.3d 618, 621-622 (Tex. 2011). ................................. 14 Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994). ....................... 13 Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 634-35 (Tex. 2010) ......................................................................................................................... 13 Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 859-60 (Tex. 2002) ......................................................................................................................... 13 Tex. Prop. & Cas. Guar. Ass'n v. Nat'l Am. Ins. Co., 208 S.W.3d 523, 533 (Tex. App.--Austin 2006, pet. denied). ............................................................................... 15 Tex. Workers' Compensation Ins. Fund v. Tex. Workers' Compensation Comm'n & Watts, 124 S.W.3d 813, 820 (Tex. App.--Austin 2003, pet. denied) ........................................................................................................................... 20, 22 Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440 at 446 (Tex. 1993) .................................................................................................................................... 33 Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex App.—Austin 2006, pet. denied) ............... 8, 20, 24 Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex.1994) ...................... 37 Texas Government Code section 2001.171 .............................................................. 16 Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891, 895 (Tex.1970) .......................................................................................................................... 38 Texas Mun. Power Agency v. Public Util. Comm'n, 100 S.W.3d 510, 520 (Tex. App.--Austin 2003, pet. denied) ................................................................................. 39 Texas Mun. Power Agency v. Public Utility Com'n of Texas, 253 S.W.3d 184, 189 (Tex. 2007) ................................................................................................................ 37 Texas Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002) ......................................................................................................................... 35 Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n, 16 S.W.3d 61, 65 (Tex. App.-Austin 2000, no pet.). ........................................... 33 Texas Workers' Compensation Commision v. Garcia, 893 S.W.2d 504 (Tex. 1995) ..................................................................................................................................... 38 Young Chevrolet, Inc. v. Tex. Motor Vehicle Bd., 974 S.W.2d 906,911 (Tex. App.--Austin 1998, pet. denied) ................................................................................ 31 v No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Statutes Tex. Civ. P. & Rem. Code § 37.006 .......................................................................... 10, 18 Tex. Civ. Prac. & Rem. Code §37.003(a) ..................................................................... 43 Tex. Civ. Prac. & Rem. Code §5.062(a) ........................................................................ 43 TEX. INS. CODE § 462.017(b) .............................................................................................. 17 Tex. Lab. Code §410.204(a) ............................................................................................ 22 TEX. LAB. CODE § 408.123(a). ............................................................................................ 27 TEX. LAB. CODE § 410.252(b) ............................................................................................. 17 Texas Labor Code § 410.254 .............................................................................................. 7 Texas Labor Code §410.252(b)(1) ............................................................................... 17 Texas Labor Code Section 401.011(12) ........................................................................ 7 Texas Labor Code Section 408.124(c) ........................................................................ 26 Texas Labor Code Sections 401.011(23) & (24) .................................................... 27 Other Authorities Camp v. Greene County Tech. et. al, decided October 17, 2008, 2008 WL 4686198 (Ark.Work.Comp.Com.) 29 DWC APPEAL NO. 050140, 2005 TX Wrk. Comp. LEXIS 57 (decided March 14, 2005) 40 DWC APPEAL NO. 94994, 1994 TX Wrk. Comp. LEXIS 6081, September 9, 1994 41 DWC APPEAL NO. 951802, 1995 TX Wrk. Comp. LEXIS 4964, December 13, 1995 42 DWC Appeal No. 990005, 1999 TX Wrk. Comp. LEXIS 3029, decided February 19, 1999 42 DWC Appeals Panel Decision No. 080375, May 15, 2008, 2008 WL 2233469 28 DWC Appeals Panel No. 071023-s, decided July 23, 2007, 2007 TX Wrk. Comp. LEXIS 54. 40 vi No. 03-14-00808-CV Rosendo Morales Appellant’s Brief STATEMENT OF THE CASE This case involves primarily questions of law and statutory violations by a state agency and agency official and the workers’ compensation insurance carrier which arose out of an actual workers’ compensation dispute and the improper interpretation and application of the Legislature’s statutory terms by both the workers’ compensation insurance carrier and the Texas Department of Insurance-Division of Workers’ Compensation (DWC), which is the state agency charged with properly applying, enforcing, and interpreting the Texas Labor Code and Texas Insurance Code along with the DWC Commissioner in his official capacity. Rosendo Morales is the injured Texas worker. The injured worker has workers’ compensation coverage through the other Defendant below, the Texas Mutual Insurance Company. The administrative judge ruled in favor of the Defendant Insurance Carrier, and Rosendo Morales appealed and the final DWC administrative decision as improperly limiting his impairment rating to not include the four level cervical fusion and seeking declaratory judgment relief. CR 47. Rosendo Morales filed for judicial review in the 146th District Court of Bell County challenging the final DWC determinations and seeking a declaratory judgment of proper statutory enforcement and interpretation under the Texas Labor Code and the Texas vii No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Insurance Code. CR 4, 47. The DWC filed an original answer and general denial in part arguing sovereign immunity from suit. CR 74. Texas Mutual, the Insurance Carrier, finally answered and filed special exceptions. CR 21. The Honorable Judge Jack Jones granted the DWC Defendants’ plea to the jurisdiction and dismissed the DWC and the Commissioner from the lawsuit, and he granted Texas Mutual’s Plea to the Jurisdiction, CR 288- 289. Plaintiff brings this interlocutory appeal challenging the plea to the jurisdiction dismissing DWC and the DWC Commissioner from the case and granting DWC’s plea to the jurisdiction. viii No. 03-14-00808-CV Rosendo Morales Appellant’s Brief ISSUE PRESENTED Issue No. 1: Whether the District Court has jurisdiction to determine a declaratory judgment action brought to properly construe, interpret, and enforce applicable Texas statutes against the state agency and the head of the state agency after administrative remedies have been exhausted and a live controversy remains with allegations that the state defendants have violated the statutes in question by failing to properly apply the law? ix No. 03-14-00808-CV Rosendo Morales Appellant’s Brief No. 03-14-00808-CV IN THE 3RD COURT OF APPEALS AUSTIN, TEXAS Rosendo Morales, Appellant V. Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Ryan Brannan, in his official capacity, Appellees On appeal from the 146th District Court of Bell County, Texas; Cause No. 269,135-B, the Honorable Jack Weldon Jones Presiding ROSENDO MORALES APPELLANT’S BRIEF To the Honorable Justices of the 3rd Court of Appeals: A state agency is not free to misinterpret and misapply the laws of the Texas Legislature, and the Courts of this State are duty bound to make sure the laws of this State are properly applied, interpreted and enforced. Texas citizens have a right to seek declaratory judgments concerning statutory rights especially where administrative remedies have been exhausted. This Court previously allowed a declaratory judgment action against the DWC in Tex. Dep’t of Ins. v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex. App.— Austin 2006, pet. denied), which resulted in erroneous applications of the law 1 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief from dicta. For almost a decade now, the Lumbermens declaratory judgment decision unleashed the DWC and the Commissioner and insurance carriers such as Texas Mutual, to erroneously deprive severely injured workers like Mr. Morales proper impairment ratings. Workers who undergo insurance carrier approved and paid for spinal fusion surgeries occurring before the worker’s recovery stabilizes at maximum medical improvement must have such surgeries and the effects of such surgeries considered and rated when impairment ratings are assigned. A state agency may not prevent a parties challenge that a statute is not being properly applied, interpreted and enforced. The state agency is a necessary party for such a declaration, and such a declaration would be unenforceable without the proper state agency. The final decision of the Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Brannan, collectively the DWC, refused to allow a proper rating for a four level cervical spinal fusion surgery which occurred prior to maximum medical improvement. The Defendants, the Texas Department of Insurance-Division of Workers’ Compensation, DWC, and the Commissioner and the Defendant Texas Mutual Insurance Carrier, appear to wish to avoid clear legal statutory 2 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief construction and proper statutory application questions raised by the Plaintiff, Rosendo Morales, the injured worker. Mr. Morales believes his legal positions are correct, but the Defendants apparently do not want a clear statement of the law even though in other cases the Defendants have sought declaratory legal determinations. This case involves a proper request for declaratory judgment with a challenge to the DWC Defendants improper enforcement of the law. A justiciable controversy exists; exhaustion of administrative remedies occurred; and clear questions of law concerning statutory interpretations and failure to apply and enforce the law properly exist. Mr. Morales asserts the legal declarations should be decided in his favor and help bring an end to this litigation and protect his right to the limited recovery of workers’ compensation benefits for impairment ratings for permanent anatomic and functional loss. Especially, the DWC and the Commissioner cannot avoid the law and cannot hide from being required to follow the law and to properly interpret, apply, and enforce the law as written by the Legislature. STATEMENT OF FACTS Rosendo Morales, a Texas worker, suffered severe injuries on November 22, 2010 while in the course and scope of his employment with his employer, 3 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Perry & Perry Builders, Inc.1 Texas Mutual Insurance Company provided workers compensation insurance as the Insurance Carrier on the date of the worker’s injuries.2 It is undisputed that Mr. Morales sustained a compensable left shoulder contusion, left upper arm contusion, right heel contusion, right knee contusion, right knee meniscal tear and arthritis, neck contusion, and C5-6 radiculopathy on November 22, 2010.3 The parties stipulated that Claimant reached maximum medical improvement on the statutory date of December 26, 2012.4 Prior to reaching maximum medical improvement, Mr. Morales underwent a multi-level cervical spinal fusion fusing his cervical spine closed across four levels of his spine. The DWC was asked to determine the proper impairment rating (and good cause for Texas Mutual missing the first scheduled hearing).5 The DWC hearing officer determined that neither the impairment rating was 13% with 8% other body parts and only 5% for the cervical spine and rejected the other impairment rating which had 8% for the other body parts and 27% for the fused cervical spine6 and the Insurance Carrier was ordered to pay workers’ compensation 1 CR 61 DWC Hearing Decision 2 CR 61 3 CR 61 4 CR 62 5 CR 58 6 CR 61 4 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief benefits consistent with the decision.7 The live pleadings of the Plaintiff are attached as Appendix 2, Plaintiff’s First Amended Petition and Suit for Declaratory Judgment and Exhibit “A” DWC Contested Case Hearing Decision signed October 22, 2014, and DWC finality notice of January 27, 2014. Rosendo Morales filed his lawsuit for declaratory judgment against the Insurance Carrier and the DWC and the DWC Commissioner.8 The DWC also filed a plea to the jurisdiction asserting sovereign immunity.9 Mr. Morales asked that the District Court declare his real rights to enforce the statute in compliance with statutory provisions which the DWC and the DWC Commissioner and the Insurance Carrier defendants who have not followed and not properly applied and properly enforced the Texas Labor Code provisions. 10 The District Court granted the DWC and the Commissioner plea to the jurisdiction along with Texas Mutual’s Plea to the jurisdiction.11 This interlocutory appeal was brought by Rosendo Morales challenging the granting of the plea to the jurisdiction and dismissal of the DWC and the DWC Commissioner from this matter. 7 CR 62 8 CR 47 Plaintiff’s 1st Amended Petition and Suit for Declaratory Judgment 9 CR 60, 105 10 CR 50-51 11 CR 287,288 5 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief SUMMARY OF THE ARGUMENT A state agency which intervenes in a lawsuit may not be dismissed on jurisdictional grounds from the lawsuit it joined avoid being a necessary party to a statutory declaration lawsuit concerning the statutes the agency is charged to regulate and to enforce and to properly apply. Further, when the state agency acts beyond and in derogation of its statutory authority, the state official is a proper party to a lawsuit alleging such ultra vires acts under Heinrich. This is especially clear when administrative remedies have been exhausted. This Court of Appeals previously rejected the DWC and the Commissioner’s argument that only judicial review between the parties is permissible:12 The Division argues that because the carriers are permitted to seek judicial review of hearing decisions applying the advisories under section 410.251 of the labor code, they are barred from bringing declaratory judgment actions under the UDJA challenging the same decisions. The 3rd Court rejected the DWC’s similar arguments and concluded: “that the trial court had jurisdiction over the declaratory judgment action pursuant to the UDJA.”13 This matter is not different. In this matter, Rosendo Morales has sought declaratory judgments that 12 Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870, 874 (Tex App.—Austin 2006, pet. denied) 13 Lumbermens at 875 6 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief assert the DWC Defendants and Commissioner and the Insurance Carrier have not properly interpreted, applied, and enforced the Texas Workers’ Compensation Act under Texas Labor Code Provisions. Included in the declarations of law sought are the proper application, interpretation, and enforcement of TEXAS LABOR CODE. The legal resolution of the declarations will likely resolve the underlying administrative controversy where the material facts are not disputed. Without declarations, these legal questions will arise again and again and again. Workers’ compensation system participants are entitled to a final declaration of, interpretation, and enforcement of the statutory terms by the Judicial Branch subject only to changes in the laws by the Texas Legislature. Texas Courts are duty bound to properly construe statutory requirements especially where the Legislature’s will is clearly ignored. Here the DWC’s and the Commissioner’s position appears to be that it is only allowed to intervene under Texas Labor Code § 410.254, but that the DWC is somehow not a necessary or proper party in such suits enforcing the statutes which the DWC is required to enforce appears to create a dichotomy. This allows the DWC to continually misapply and misinterpret the law and act in violation of the law without being held accountable. The DWC and the 7 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Commissioner’s similar jurisdictional pleas arguing immunity from declaratory judgments were rejected by this Court of Appeals in 2006 in DWC v. Lumbermens and in 2013, last year, in the Nat’l Ins. and DWC & Commissioner v. TPCIGA decisions.14 The DWC and the Commissioner are clearly necessary to have the Texas Workers’ Compensation Act and other applicable statutes properly applied in workers’ compensation disputes concerning legal rights. If the DWC and the Commissioner are correct, then the Judicial Branch of Texas government would lose its oversight of the Executive Branches proper application, proper interpretation, and proper enforcement of the laws adopted by the Texas Legislature and state agencies would be free to violate the very statutes which the agency and the state official is bound to uphold. This case involves a justiciable controversy, properly exhausted administrative remedies, and clear questions of law concerning statutory interpretations, alleged statutory violations by the DWC and failure to properly apply the law. The DWC and the Commissioner cannot avoid the law 14Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex App.—Austin 2006, pet. denied); Nat'l Am. Ins. Co. and TDI-DWC and Commissioner Bordelon in his official capacity v. Tex. Prop. & Cas. Ins. Guar. Ass'n, No. 03-09-00680-CV, 2013 WL 4817637, 2013 Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.) 8 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief and cannot hide from being required to follow the law when the state agency’s actions violate the statutory requirements. Appellant is not seeking damages from the state Defendants. Appellant is seeking to enforce the statutory rights violated by the Defendants. 9 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief ARGUMENT & AUTHORITY Issue No. 1: Whether the District Court has jurisdiction to determine a declaratory judgment action brought to properly construe, interpret, and enforce applicable Texas statutes against the state agency and the head of the state agency after administrative remedies have been exhausted and a live controversy remains with allegations that the state defendants have violated the statutes in question by failing to properly apply the law? 1. The District Court erred in Dismissing the DWC and the Commissioner. The DWC and the Commissioner appear to allege declaratory relief is not available at all against the DWC and the Commissioner. Texas Mutual, in response to Plaintiff’s Interrogatory No. 5 conceded: “However, in the event the Court permits this declaratory judgment action to proceed, the DWC and its commissioner would be necessary parties.” All parties involved will be affected by the declaratory judgment action and to be of any force and effect, the UDJA unequivocally mandates: (a) When declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration must be made parties. A declaration does not prejudice the rights of a person not a party to the proceeding. TEX. CIV. P. & REM. CODE § 37.006. See Brooks v. Northglen Ass'n, 141 S.W.3d 158, 163 (Tex. 2004) (The Texas Supreme Court noted that no fault and no 10 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief prejudice lies with non-parties to the UDJA). The injured worker has properly included the workers’ compensation insurance carrier, and the Texas Department of Insurance-Division of Workers’ Compensation, DWC and the Commissioner in this declaratory action. A state agency may not avoid being a necessary party to a statutory declaration lawsuit concerning the statutes the agency is charged to regulate, to interpret, to apply, to adjudicate, and to enforce. This is especially clear when administrative remedies have been exhausted and a live controversy exists. The 3rd Court of Appeals previously rejected the DWC and the Commissioner’s argument that:15 The Division argues that because the carriers are permitted to seek judicial review of hearing decisions applying the advisories under section 410.251 of the labor code, they are barred from bringing declaratory judgment actions under the UDJA challenging the same decisions. The 3rd Court rejected the DWC’s similar arguments and concluded: “that the trial court had jurisdiction over the declaratory judgment action pursuant to the UDJA.”16 The Texas Supreme Court has held that the UDJA waives a municipality's immunity against claims challenging the validity of its ordinances. City of El 15 Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870, 874 (Tex. App.—Austin 2006, pet. denied) 16 Lumbermens at 875 11 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Paso v. Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009). The Court explained that that the governmental entity retains its immunity from suit when the claimant does not challenge the validity of a statute but rather challenges a government officer's application of a statute to the claimant. 284 S.W.3d at 372-73 & n.6. The affected parties remedy is an ultra vires suit against the government officer in his or her official capacity for prospective relief. Id. at 369-74. This would support DWC Commissioner being a party in this matter to properly apply the statutes in question and provide a valid interpretation and application and enforcement of statutes. Contrast this matter with Roal Global Corp. v. City of Dallas, 2015 Tex. App. LEXIS 5205 (Tex. App. Dallas--May 21, 2015, no pet. h.); City of McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102, 112 (Tex. App.—Dallas 2013, no pet.); Harvel v. Tex. Dep't of Ins.-Div. of Workers' Comp., 13-14-00095- CV, 2015 Tex. App. LEXIS 5159, 2015 WL 2452703 (Tex. App. Corpus Christi- -May 21, 2015, motion for rehearing to be filed) (13th Court of Appeals determined sovereign immunity bars the claims against state agency and that a Heinrich challenge was not alleged.). 12 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief 2. Declaratory Statutory Challenges Require State Agency to be a Party Recent Texas Supreme Court cases also support that the state agency is a proper party in a declaratory action to determine parties’ rights under the statute that the agency regulates and enforces especially where the state agency’s violates the statutory terms. Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 634-35 (Tex. 2010); Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 859-60 (Tex. 2002); Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994). In DeQueen subsequent to Heinrich, the Texas Supreme Court reiterated that Declaratory Judgment Act suits to construe statutes are expressly allowed jurisdictionally against a state agency. Texas Lottery Commission v. First State Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010). The DWC and the Commissioner are proper parties because without them the statutory legal questions and statutory application would not be applicable to the DWC and the Commissioner. The Supreme Court in DeQueen reiterated that jurisdiction over the state agency existed and citing to Leeper explained: [T]he DJA permits statutory challenges and governmental entities may be bound by those challenges, the DJA contemplates entities must be joined in those suits. Leeper, 893 S.W.2d at 446. The Texas Supreme Court further explained in DeQueen that statutory 13 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief clarification, as expressly sought in this matter, that the state agency is a proper party:17 Next, the Commission asserts that the DJA does not waive immunity because it applies only to suits involving constitutional invalidation and not to those involving statutory interpretation. But the language in the DJA does not make that distinction. In Leeper, . . . . the DJA discussion was in the context of a statutory clarification. . . . . The decision on this claim may ultimately impact actions taken by officers of the Commission, but that does not deprive the trial court of jurisdiction. [Leeper] at 445 (noting that the DJA allows courts to declare relief "whether or not further relief is or could be claimed"). The trial court properly exercised jurisdiction over this claim. Subsequent to DeQueen, the Texas Supreme Court in Sefzik explained:18 As noted, we dismissed Heinrich's claims seeking declaratory and injunctive relief against governmental entities, brought under the UDJA, because the entities were immune. In so doing, we necessarily concluded that the UDJA does not waive the state's sovereign immunity when the plaintiff seeks a declaration of his or her rights under a statute or other law. Very likely, the same claim could be brought against the appropriate state official under the ultra vires exception, but the state agency remains immune. See id. at 372-73. As we have consistently stated, the UDJA does not enlarge the trial court's jurisdiction but is "merely a procedural device for deciding cases already within a court's jurisdiction." Tex. Parks & Wildlife Dep't v. Sawyer Trust, 354 S.W.3d 384, 2011 Tex. LEXIS 640, *8 (2011) (quoting Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993)). Sefzik would have allowed a claim for statutory rights enforcement and declaration to be brought as long as the appropriate state official be named— which the DWC Commissioner is named herein to cover the Heinrich 17 DeQueen, 325 S.W.3d 628 at 635. 18 Tex. DOT v. Sefzik, 355 S.W.3d 618, 621-622 (Tex. 2011). 14 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief determination where the state official is ignoring the law, the state official is a proper party. 3. Under Labor Code Section 410.255, the DWC is a proper party for all other issues, which likely includes the Proper Enforcement of the Law for Assigning Impairment Ratings. If this declaratory judgment action is viewed properly as an issue beyond just entitlement to impairment rating income benefits, then Labor Code section 410.255 would require the DWC be made a party under a “substantial evidence review” standard. This Court of Appeals explained the two judicial review avenues under Chapter 410 of the Texas Labor Code:19 Section 410.301 HN4 provides that suits "regarding compensability or eligibility for or the amount of income or death benefits" are governed by modified de novo review. Tex. Lab. Code Ann. § 410.301. Substantial- evidence review is reserved as the default for any other type of reviewable appeals panel decision. See id. § 410.255. To anticipate the DWC’s response that 410.255 would mandate venue in Travis County—such is not accurate because 410.252 controls judicial review and requires venue in the county of the worker’s residence under either subchapter F (410.255) or subchapter G (410.301) of Chapter 410 of the Texas Labor Code. So even if Labor Code section 410.255 applies to network 19Tex. Prop. & Cas. Guar. Ass'n v. Nat'l Am. Ins. Co., 208 S.W.3d 523, 533 (Tex. App.--Austin 2006, pet. denied). 15 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief issues and then Texas Government Code section 2001.171 et seq. applies in this case (though such assertion is definitely contested), venue is still mandatory in Dallas County. Under Texas Government Code section 2001.176(b)(1) a petition must be filed in Travis County “unless provided otherwise by statute.” Travis County is the default if the specific statute does not provide otherwise—here it provides local venue. Texas Labor Code section 410.252(b)(1) statutorily mandates venue in the worker’s county of residence (Dallas County) at the time of the injury. This is consistent with the administrative hearings in this matter being held in the local DWC field office within 75 miles of the worker’s residence under Texas Labor Code section 410.005. Worth noting is section 410.252 precedes section 410.255, and both of these sections are part of Subchapter F of Chapter 410. Any attempt to say section 410.252 does not apply to section 410.255 would be contrary to the express language of the statute. This Court of Appeals previously addressed whether the backup mandatory Travis County venue under the Guaranty Act controlled over the required mandatory county of an injured worker’s residence under the Texas Workers’ Compensation Act. See respectively, TEX. INS. CODE § 462.017(b) and TEX. LAB. CODE § 410.252(b). See TEX. LAB. CODE § 410.252(b)(1) (party 16 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief bringing suit must file petition in county where employee resided at time of injury); Campos v. Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 230 (Tex. App.—Austin 2009, no pet.). In Campos v. TPCIGA, this Court properly determined that the mandatory venue under Texas Labor Code §410.252(b)(1) the Texas Workers’ Compensation Act trumped the conflict with the Insurance Code. This Court determined:20 In our view, the specific venue provision of the Workers' Compensation Act controls over the general venue provision of the Guaranty Act. The DWC is a proper party under Texas Labor Code Section 410.255. 4. Declaratory Relief is Proper & Needed When the DWC Misapplies the Law and Violates the Law. The DWC and the Commissioner appear to allege declaratory relief is not available at all against the DWC and the Commissioner. All parties involved will be affected by the declaratory judgment action and to be of any force and effect, the UDJA unequivocally mandates: (a) When declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration must be made parties. A declaration does not prejudice the rights of a person not a party to the proceeding. 20Campos v. Texas Prop. & Cas. Ins. Guar. Ass'n, 282 S.W.3d 226, 231 (Tex. App.—Austin 2009, no pet.) 17 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief TEX. CIV. P. & REM. CODE § 37.006. See Brooks v. Northglen Ass'n, 141 S.W.3d 158, 163 (Tex. 2004) (The Texas Supreme Court noted that no fault and no prejudice lies with non-parties to the UDJA). If the Appellees, the DWC and the Commissioner, were not parties, then they would not be bound to follow the District Court’s declarations. 5. The DWC and Commissioner Previously Have Been Determined Proper Parties in UDJA Actions This Court of Appeals recently emphasized that a declaratory judgment action is allowed for Texas Labor Code proper statutory enforcement matters and are proper where a party “asked the court to declare its rights and status under certain statutory provisions” involving the Texas Workers’ Compensation Act. Nat'l Am. Ins. Co. and TDI-DWC and Commissioner Bordelon in his official capacity v. Tex. Prop. & Cas. Ins. Guar. Ass'n, No. 03-09-00680-CV, 2013 WL 4817637, 2013 Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.) (mem. op.). This Court rejected the DWC’s and the Commissioner’s position that the trial court did not have jurisdiction to construe the statutes in issue and determined in part that “the trial court had jurisdiction to construe the statutes in issue.” Id. The statutes in issue all were sections of the Texas Workers’ Compensation Act under the Texas Labor 18 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Code. The parties were an insurance carrier, TPCIGA acting on behalf of an insurance carrier in receivership, and the DWC and the Commissioner. This Court should also allow a declaratory judgment to proceed to enforce compliance with the statutory terms. As the 3rd Court of Appeals explained in upholding the right to declaratory relief in the Nat’l American case:21 A declaratory judgment action is proper only if a justiciable controversy exists as to the rights and status of the parties and the controversy will be resolved by the declaration sought. Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995). A clear controversy exists with regards to the DWC and the Commissioner’s proper application of the statutory requirements and that workers should have spinal fusion surgeries occurring before maximum medical improvement included in any assigned impairment ratings. 6. Insurance Carriers Are Allowed Declaratory Actions Against the TWCC and the DWC (now the DWC)—Why Not Injured Workers? In 2003, this Court of Appeals allowed one insurance carrier to bring a declaratory judgment action against the injured worker and the Texas Workers’ Compensation Commission, the predecessor to the DWC, after having exhausted administrative remedies was proper under the Uniform Declaratory Judgment Act. Tex. Workers' Compensation Ins. Fund v. Tex. 21 Id. 19 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Workers' Compensation Comm'n & Watts, 124 S.W.3d 813, 820 (Tex. App.-- Austin 2003, pet. denied). This Court of Appeals in TWCIF v. TWCC allowed a declaratory action but agreed with the TWCC’s statutory interpretation. In 2006, this Court of Appeals in Lumbermens upheld the jurisdiction of the district court under the Uniform Declaratory Judgments Act, UDJA after an analogous matter arising out of a Chapter 410 proceeding. Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex. App.—Austin 2006, pet. denied). The Lumbermens court stated: The UDJA does not confer jurisdiction on trial courts; rather, it is merely a procedural device for deciding cases already within a court's jurisdiction. ... Accordingly, we hold that the trial court had jurisdiction under the UDJA and overrule the Division's second issue. Lumbermens at 875. The authority clearly exists to use the UDJA, specifically §37.004, to pursue a declaration of statutory interpretation even when a rule violates the Texas Workers’ Compensation Act for cases which administrative remedies have been exhausted under Chapter 410. The 3rd Court in the Lumbermens case, TWCIF v TWCC, and the Nat’l Amer. and TDI-DWC v. TPCIGA, simply allowed and upheld declaratory judgments with the DWC as a proper party. In each case including the case decided last year, the DWC objected to the declaratory actions; however, the 3rd Court of 20 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Appeals allowed each declaratory action to proceed and determined the meaning of the statutes in question. These three declaratory actions determined statutory rights in matters like this one arising after exhaustion of administrative remedies under Chapter 410 of the Texas Labor Code. This is a case challenging the state agency and the insurance carrier’s improper application, interpretation, and lack of compliance and enforcement of state laws. When the Legislature declares a 6.25% state sales tax rate, a state agency could not try to declare and misapply a 7% state sales tax. When the Legislature declares complete and accurate and detailed written notice be provided to workers, a state agency and its official head cannot simply allow a website link to be provided. The TWCIF v. TWCC and the Lumbermens cases were brought as a declaratory judgment action in conjunction with challenging a final decision from the Chapter 410 dispute process in the Texas Labor Code. Likewise, the Nat’l Amer. v. TPCIGA also was brought as a declaratory judgment action subsequent to a final Chapter 410 contested case hearing yet in a separate proceeding. These cases illustrate the need for an actual controversy and that Courts are allowed to address declaratory judgments on matters within their jurisdiction after administrative remedies have been exhausted. Unlike those 21 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief cases, the DWC intervened in this matter. 7. The Predecessor to Texas Mutual, the Texas Workers’ Compensation Insurance Fund, Pursued an Allowed Declaratory Action Against the TWCC and the DWC. In 2003, this Court of Appeals allowed one insurance carrier, the predecessor to Texas Mutual, to bring a declaratory judgment action against the injured worker and the Texas Workers’ Compensation Commission, the predecessor to the DWC, after having exhausted administrative remedies in a dispute against one worker and that such was allowed under the Uniform Declaratory Judgment Act. Tex. Workers' Compensation Ins. Fund v. Tex. Workers' Compensation Comm'n & Watts, 124 S.W.3d 813, 820 (Tex. App.-- Austin 2003, pet. denied). The 3rd Court of Appeals in TWCIF v. TWCC allowed a declaratory action but agreed with the TWCC’s statutory interpretation. This Court properly determined the legal dispute over the meaning of an "issue," as used in Tex. Lab. Code §410.204(a), refers to the disputed determinations made by the hearing officer in rendering the final decision. Clearly, the state agency was a necessary party to the declaratory action. Texas Mutual has sought declaratory judgments under the Texas Workers’ Compensation Act in other matters in which Texas Mutual won the declaration, and this Court of Appeals determined the DWC’s plea to the 22 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief jurisdiction was granted in error. Texas Mutual Insurance Co. v. Texas Department of Insurance, Division of Workers' Compensation, 214 S.W.3d 613 (Tex. App.--Austin 2006, no pet.). Texas Mutual and the DWC (its predecessor the TWCC) successfully sought declaratory judgments against a chiropractor for the proper application of the Texas Labor Code (the Texas Workers’ Compensation Act). Howell v. TWCC & Texas Mutual, 143 S.W.3d 416, 429 (Tex. App. --Austin 2004, pet. denied). , and this Court of Appeals explained: Unlike an advisory opinion, these declarations did not concern hypothetical claims or abstract questions of law. The declarations went to the heart of the controversy between the parties. . . . A trial court has the discretion to enter a declaratory judgment as long as it will serve a useful purpose or will terminate the controversy between the parties. In prior legal brief, 2006 TX App. Ct. Briefs LEXIS 276 , Texas Mutual successfully asserted a need for declaratory judgment relief against the DWC. Tex. Mut. Ins. Co. v. Tex. Dept. of Ins., Div. of Workers' Compensation, 214 S.W.3d 613, 619 (Tex. App.—Austin 2006, no pet.) Texas Mutual argued entitlement to a declaration and that the attached final DWC contested case hearing officer’s decision confirmed this (emphasis added): First, the attached decision confirms that Texas Mutual's declaratory judgment action challenging the validity of Rule 110.1 is ripe. Texas Mutual seeks declaratory judgment that the Rule cannot validly extend a 23 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief policy past the date that the statute would require. . . . Texas Mutual is entitled to appeal the attached decision. TEX. LABOR CODE § 410.252. But that potential appeal is not the exclusive remedy available to Texas Mutual. Only by a declaratory judgment action such as the one in the case at bar can Texas Mutual resolve the scope of the Division's statutory authority over cancellation, non-renewal, and offers of renewal not accepted. The declaratory judgment action would thus be proper even if there were also an APA appeal of a particular order 8. Prior Declaratory Judgment over Impairment Ratings and AMA Guides In 2006, this Court of Appeals in Lumbermens upheld the jurisdiction of the district court under the Uniform Declaratory Judgments Act, UDJA, after an analogous matter arising out of a Chapter 410 proceeding. Texas Dep. of Ins., Div. of Workers’ Compensation v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex. App.—Austin 2006, pet. denied). The Lumbermens court stated: The UDJA does not confer jurisdiction on trial courts; rather, it is merely a procedural device for deciding cases already within a court's jurisdiction. ... Accordingly, we hold that the trial court had jurisdiction under the UDJA and overrule the Division's second issue. Lumbermens at 875. The authority clearly exists to use the UDJA, specifically §37.004, to pursue a declaration of statutory interpretation even when a rule or mere agency position violates the Texas Workers’ Compensation Act. 24 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Mr. Morales has in part requested a declaratory judgment ruling that spine impairment ratings under the Texas Workers’ Compensation Act must take into consideration spinal surgeries and the effects of spinal surgeries when the surgeries occur prior to maximum medical improvement, MMI, being reached. This legal question of whether spinal surgery occurring before MMI must be considered in assigning an impairment rating was expressly left open by this Court in Severiano DeLeon v. Royal Indemnity Company, 396 S.W.3d 597 (Tex. App.--Austin 2010) rev’d on other grounds Severiano DeLeon v. Royal Indem. Co., 396 S.W.3d 527 (Tex. 2012). 9. Lumbermens Was Wrong to Try to Exclude Consideration of Pre- MMI Spinal Surgeries as the DeLeon decision determined that Pre- MMI Spinal Surgeries Question Would Be Left Open. Insurance Carriers and the DWC and the DWC Commissioner have used the Lumbermens dicta inappropriately to try to exclude all spinal surgeries, even pre-MMI, from consideration (and this is evidently taught to a number of designated doctors).22 Subsequent to Lumbermens, this Court’s DeLeon decision expressly distanced itself from this dicta, with this Court noting that it would leave open and not reach Mr. DeLeon’s arguments including 22Tex. Dep’t of Ins. v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex. App.— Austin 2006, pet. denied) 25 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief considering pre-MMI surgery, this Court stated: 23 Therefore, we need not reach the issue of whether pre-MMI surgery may be taken into account under the AMA Guides when assessing an impairment rating for a spine impairment. A major flaw from allowing the DWC and insurance carriers to apply the dicta from the Lumbermens decision was created in part because no worker was in that appeal to point out the pertinent provisions of the AMA Guides, was from looking at one sentence of the AMA Guides in isolation and not with respect to Table 70 which provides express “specific disorder” categories for “previous spine operations,” the MMI date, or even the definition of “impairment” under the WC Act. Attached as Appendix No. 3 are the applicable pages from the AMA Guides to the Evaluation of Permanent Impairment, 4th Edition, which is allowed to be used by the Legislature under Texas Labor Code Section 408.124(c). Under Table 70, Mr. Morales is entitled to a range of categories, and, as discussed below, the Range of Motion model should be used if Table 70 does not contain a specific rating. The line taken out of context from the AMA Guides in the Lumbermens decision to somehow, and somewhat inexplicably, exclude spinal fusion 23Severiano DeLeon v. Royal Indemnity Company, 396 S.W.3d 597 (Tex. App.-- Austin 2010) rev’d on other grounds Severiano DeLeon v. Royal Indem. Co., 396 S.W.3d 527 (Tex. 2012) 26 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief surgeries from impairment ratings is: With the Injury Model, surgery to treat an impairment does not modify the original impairment estimate, which remains the same in spite of any improvement or failure to improve with regards to symptoms that follow the surgery and irrespective of whether the patient has a favorable or unfavorable response to treatment. [Emphasis added, AMA Guides, p. 100, left column, paragraph 3]. Under Texas Labor Code Sections 401.011(23) & (24) the Legislature’s definitions are as follows: (23) “Impairment” means any anatomic or functional abnormality or loss existing after maximum medical improvement that results from a compensable injury and is reasonably presumed to be permanent. (24) “Impairment rating” means the percentage of permanent impairment of the whole body resulting from a compensable injury. The “impairment” must be from an examination done after MMI has been reached and be based upon the doctor’s evaluation of the injured worker’s condition after MMI. 24 So surgery occurring after MMI, at least under the law, would not affect the original impairment rating, but surgery occurring before an impairment is reached is certainly included. In the Molder decision, the El Paso Court properly emphasized that MMI must be reached before an impairment rating may be evaluated, and the impairment rating is based on the employee’s condition as of the date of MMI. In Molder, the Court of Appeals explained DWC Rule 130.1 and left the 24 TEX. LAB. CODE § 408.123(a). 27 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief medical judgment to the doctor to include the surgery (emphasis added):25 Rule 130.1(c)(3) requires that assignment of an impairment rating for the current compensable injury be based on the injured employee's condition as of the MMI date considering the medical record and the certifying examination. 28 Tex. Admin. Code § 130.1(c)(3). . . . An “impairment” is permanent and not determined until after MMI is reached and clearly not the same as an “injury” under the AMA Guides. Surgery to treat an “impairment” is legally different from surgery to treat an “injury.” In discussing the impact of surgery with regards to MMI, the DWC Appeals Panel explained in DWC Appeals Panel Decision No. 080375, May 15, 2008, 2008 WL 2233469: 28 TEX. ADMIN. CODE § 130.1(c)(3) (Rule 130.1(c)(3)) provides that the assignment of an IR for the current compensable injury shall be based on the injured employee's condition as of the MMI date considering the medical record and the certifying examination. . . . In response to public comment on Rule 130.1, the Division, in the preamble, noted that in the situations where the claimant reaches MMI clinically, rather than with the expiration of 104 weeks or the extended date in the event of spinal surgery, future changes in the injured worker's condition may cause the MMI date to change and that “[i]n the event the MMI date is changed due to a post-MMI change in the injured employee's conditions, there should be a re-evaluation of the IR as of the new MMI date.” 25Tex. Builders Ins. Co. v. Molder, 311 S.W.3d 513 (Tex. App. El Paso 2009, no pet.) 28 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Surgery after MMI perhaps does not legally affect the impairment rating, but certainly pre-MMI surgery does. In this matter, Mr. Morales had a multi-level pre-MMI fusion surgery to treat his “injury” not surgery to treat his “impairment,” which would refer to his post-MMI and post-surgery permanent condition. The Arkansas Workers’ Compensation Commission properly explained such in an administrative decision: . . . a single level fusion was not geared to treat an impairment, but rather an injury, a recurrent herniated nucleus pulposus lumbar 4-5 right. Camp v. Greene County Tech. et. al, decided October 17, 2008, 2008 WL 4686198 (Ark.Work.Comp.Com.)(allowing rating after and considering surgery but under Arkansas law apportioning out prior impairments). The no inclusion of multi-level fusion surgery by the designated doctor results from the erroneous interpretation applied from Lumbermens and clearly left open in DeLeon likely because such misinterpretation violates and contradicts the AMA Guides requirements, DWC rules, and the WC Act. Further under the Range of Motion model used by the physician to rate the multi-level fusion of Mr. Morales, the AMA Guides expressly provide for ratings of surgical fusions when Table 70 cannot be used or to help decide a category under Table 75 of the AMA Guides, which starts with a 10% rating 29 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief for a one level cervical fusion—the DWC’s designated doctor here only assigned a 5% rating for the cervical spine, when Mr. Morales undisputed underwent a four level cervical fusion. The DWC’s enforced rating is clearly erroneous and legally invalid. 10. The DWC and the Commissioner Relied Below on Inapplicable and Distinguishable Decisions The Appellees relied upon easily distinguishable cases. In the District Court, the Appellees relied in part upon Beacon Nat 'I Ins. Co. v. Montemayor, 86 S.W.3d 260, 267 (Tex. App.-Austin 2002, no pet.). In Beacon v. Montemayor, the 3rd Court of Appeals explained: The UDJA waives this immunity when a party seeks a court's construction of a statute or rule. City of LaPorte v. Barfield, 898 S.W.2d 288, 297, 38 Tex. Sup. Ct. J. 533 (Tex. 1995). Beacon's action does not seek construction of a statute or rule; . . . . This shows that the party seeking the declaration in Beacon did not seek proper statutory construction or clarification unlike the declaratory requests here. Further, the Appellees below cited to Kuntz v. Khan, No. 03-10-00 160-CV, 2011 Tex. App. LEXIS 446, 2011 WL 182882,(Tex. App.--Austin 2011, no pet.)(mem. op.). Kuntz v. Khan rejected a declaratory judgment because “the effect of a favorable ruling in either lawsuit would be the same—if Khan 30 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief prevails in either suit, the result would be a determination that the Department has no authority to regulate eyebrow threading.” Kuntz v Khan addressed a suit directly against and enforceable against the state agency versus here where the DWC and the Commissioner are not necessary parties to a judicial review action under Chapter 410.301 without the legal declaratory relief sought. Likewise the DWC below relied upon Young Chevrolet, Inc. v. Tex. Motor Vehicle Bd., 974 S.W.2d 906,911 (Tex. App.--Austin 1998, pet. denied), which also involved direct actions against the state regulatory agency as a party creating enforceability against the agency without the need for a declaration. The DWC and DWC Commissioner are not parties to mere judicial review actions under Texas Labor Code Section 410.301-302. Kuntz v Khan and other cases involving direct judicial challenges to a state agency are in direct contrast here where the DWC is not a mandatory party under Chapter 410 disputes except under Section 410.255, and the only method to enforce proper statutory construction and enforcement against the DWC and the Commissioner is, simply and legally, to make the DWC and the Commissioner a party, in fact a necessary party for legal declarations of statutory meanings, rights, applications, and proper enforcement especially 31 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief where violations of the law are alleged. To bind the regulatory state agency, the DWC and the Commissioner, in his official capacity, are necessary and proper parties when declaratory relief is sought to ensure compliance and that state officials do not act ultra vires. 11. The District Court Has Jurisdiction over all the Claims The Appellant has exhausted his administrative remedies before the DWC and the Commissioner with an unfavorable ruling based upon statutory construction and misapplication and refusal to comply with the law by the Appellees. When reviewing a plea to the jurisdiction, the pleadings are construed in favor of the non-movant. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). “The general test for standing in Texas requires that there (a) shall be a real controversy between the parties, which (b) will be actually determined by the judicial declaration sought.” Tex. Ass'n of Bus., 852 S.W.2d at 446. To prevail, the party asserting the plea to the jurisdiction must show that even if all the allegations in the plaintiff's pleadings are taken as true, there is an incurable jurisdictional defect apparent from the face of the pleadings, rendering it impossible for the non-movant’s claims to confer 32 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief jurisdiction on the trial court. Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n, 16 S.W.3d 61, 65 (Tex. App.-Austin 2000, no pet.). A court deciding a plea to the jurisdiction is not required to look solely to the pleadings, but may consider evidence relevant to the jurisdictional issue and must do so when necessary to resolve the jurisdictional issues which have been raised. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex. 2000). A court should construe the pleadings in the non-movant’s favor and look to the non-movant's intent. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440 at 446 (Tex. 1993). A court does not address the merits of the case in a plea to the jurisdiction; instead, the movant must establish why the merits of the non-movant’s claims should not be reached. Bland Indep. Sch. Dist., 34 S.W.3d at 554. The DWC and the Commissioner have not shown that an injured worker’s suit to properly enforce compliance with statutory terms falls outside the jurisdiction of the District Court because administrative remedies have been exhausted, and the pleadings illustrate why the DWC and the Commissioner must be parties to be able to enforce any declarations against the state agency and its administrative head when the agency fails to properly follow the Legislature’s laws and acts in violation of the state laws. 12. Resolution of the Controversy with Declaratory Action 33 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief The judicial declaration sought by Rosendo Morales will help determine and likely resolve the underlying controversy concerning the proper inclusion of spinal fusion surgeries in the impairment ratings assigned to injured workers. 13. Texas Courts are “Duty-Bound” to Construe Statutes Texas District Courts are inherently vested with the power to construe statutes, and Courts are not bound by an agencies interpretation or application, especially if in error. If a declaratory judgment action terminates the uncertainty or controversy giving rise to the lawsuit, the District Court is duty-bound to declare the rights of the parties as to the matters on which the parties join issue. Spawglass Constr. Corp. v. City of Houston, 974 S.W.2d 876, 878 (Tex. App.--Houston [14th Dist.] 1998, pet. denied); Calvert v. Employees Ret. Sys. of Tex., 648 S.W.2d 418, 419 (Tex. App.--Austin 1983, writ ref'd n.r.e.). Without the DWC and the Commissioner, the enforcement of the statutes proper application would not be available to a judge. 14. Live Justiciable Controversy Exists Appellant also has clearly asserted that the DWC and the Commissioner 34 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief interpretation and application of the laws in question violate the statutes of Texas and the statutory responsibility, authority and limits placed upon the DWC and the Commissioner and that statutory interpretation and validity of application of the Texas Workers’ Compensation Act are in dispute. A justiciable controversy regarding whether a state agency or officer has acted beyond statutory authority provides a jurisdictional basis for a UDJA action seeking construction of that statutory authority. This type of UDJA action does not implicate sovereign immunity. Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 712 (1945); see also Texas Natural Res. Conservation Comm'n v. IT- Davy, 74 S.W.3d 849, 855 (Tex. 2002) (“Private parties may seek declaratory relief against state officials who allegedly act without legal or statutory authority.”). A suit for declaratory relief is not a suit against the State because it does not seek to impose liability or money damages against the state agency. IT-Davy, 74 S.W.3d at 853. 15. Declaratory Actions Allowed Even After Prior Final Judgments under Chapter 410 of the Texas Labor Code to Determine Statutory Rights This Court of Appeals recently allowed a declaratory judgment action against the DWC, the Commissioner, and an insurance carrier to determine statutory rights after a previous final judgment under a Texas Labor Code 35 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Chapter 410 dispute. Nat'l Am. Ins. Co. v. Tex. Prop. & Cas. Ins. Guar. Ass'n for Paula Ins. Co., 2013 Tex. App. LEXIS 10865 (Tex. App.--Austin Aug. 28, 2013, no pet.). This Court, in allowing the declaratory action to proceed, explained that it was not a collateral attack on the prior judgment because: “the controversy underlying the Guaranty Association's declaratory judgment action concerns NAIC's rights vis-a-vis the Guaranty Association under section 410.033 of the Labor Code and the Guaranty Act. The declaratory judgment action regarding reimbursement thus involves the existence of a statutory right . . . .” Clearly, declaratory actions over statutory rights and the proper enforcement of those rights under the Labor Code and the Code of Criminal Procedure are allowed where, as here, a live controversy exists and administrative remedies have been exhausted. Further, the state agency is a necessary party when the authority of the state agency’s actions and rules are questioned as violating the will of the Legislature. The DWC and the Commissioner being joined in this matter makes this declaratory action proper so as to be enforced against the DWC and the Commissioner to not violate the statutes. This Court previously explained: The UDJA grants any litigant whose rights are affected by a statute the 36 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief opportunity to obtain a declaration of those rights under the statute and requires that all relevant parties be joined in any declaratory judgment suit. Tex. Civ. Prac. & Rem. Code Ann. §§ 37.004, .006 (West 1997); City of Waco v. Texas Nat. Res. Comm'n, 83 S.W.3d 169, 179 (Tex. App.-Austin 2002, pet. denied) (UDJA claim not barred by sovereign immunity because UDJA serves to clarify rights already guaranteed by legislature). Therefore, when the State is a necessary party to a statutory cause of action, such as a UDJA action for interpretation of a statute, sovereign immunity is expressly waived because, were the State not joined, the right to a declaration would have no practical effect. See City of La Porte v. Barfield, 898 S.W.2d 288, 297 (Tex.1995) (construing Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex.1994)); see also Beacon Nat'l Ins. Co. v. Montemayor, 86 S.W.3d 260, 267 (Tex. App.--Austin 2002, no pet.) (“The UDJA waives [sovereign] immunity when a party seeks a court's construction of a statute or rule.”); Star Houston v. Texas Dep't of Transp., 957 S.W.2d 102, 111 (Tex. App.--Austin 1997, pet. denied) (holding that sovereign immunity did not bar declaratory judgment determining whether agency has wrongfully construed a statute); City of Austin, 728 S.W.2d at 910-11 (holding UDJA action brought against government entity to determine scope of entity's authority not barred by sovereign immunity). A UDJA action exists whether or not further relief can be obtained. Leeper, 893 S.W.2d at 446. Thus, when a party brings a declaratory judgment action to interpret an agency's statutory authority, immunity from suit is waived by the UDJA. This does not mean, however, that immunity from damages is waived except as to a declaration of the parties' rights and the potential award of attorney's fees. UDJA actions for statutory interpretation do not implicate the policy concerns of protecting the legislature's policy-making discretion and avoiding raids on the public treasury embodied in the sovereign immunity doctrine-rather, they serve to clarify the rules and requirements imposed by the legislature on the administrative agencies. (Emphasis added.) Texas Mun. Power Agency v. Public Utility Com'n, 100 S.W.3d 510, 515-516 (Tex. App.--Austin 2003, pet. denied) (cited to favorably by Texas Mun. Power Agency v. Public Utility Com'n of Texas, 253 S.W.3d 184, 37 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief 189 (Tex. 2007). Appellant does not seek damages from the DWC or the Commissioner, but does seek to clarify and to enforce the proper compliance with the statutory requirements on the administrative agency and its head official who are violating the law. The DWC should not be allowed to continue to improperly interpret and fail to enforce the Texas Labor Code. 16. Declaratory Actions under the Texas Workers’ Compensation Act The initial challenge to the 1989 Texas Workers’ Compensation Act in Garcia was primarily a declaratory judgment action.26 The Texas Supreme Court reiterated as to the declaratory action against the then TWCC and the Executive Director looking at the terms and Constitutionality of the 1989 Act:27 Standing, which is a necessary component of subject matter jurisdiction, requires a) a real controversy between the parties, which b) will be actually determined by the judicial declaration sought. The DWC and the Commissioner’s actions ignore the statutory requirements to be applied against insurance carriers and employers and in favor of workers and health care providers. 26 Texas Workers' Compensation Commission v. Garcia, 893 S.W.2d 504, 517-518 (Tex. 1995). 27 Garcia at 513. 38 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Appellant has exhausted all applicable administrative remedies under Chapter 410 of the Texas Labor Code. A UDJA claim is sui generis; and, all other things being equal, the district court's subject matter jurisdiction over it exists independently of any administrative remedies. Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891, 895 (Tex.1970); Cobb, 190 S.W.2d at 713; see Texas Mun. Power Agency v. Public Util. Comm'n, 100 S.W.3d 510, 520 (Tex. App.--Austin 2003, pet. denied). Even if the UDJA claims in this matter could not be brought independently, the claims certainly could be brought within the jurisdiction created by the exhausted administrative dispute. The Third Court of Appeals in Mid-Century Insurance Company v. Texas Workers’ Compensation Commission, 187 S.W.3d 754 (Tex. App.—Austin 2006, no pet.), determined that a rule exceeded the statutory authority of the DWC and noted that: Mid-Century Insurance Company (Mid-Century) sought a declaration that this rule exceeds the Division's statutory powers and is thus invalid. See Tex. Civ. Prac. & Rem. Code Ann. § 37.004 (West 1997). Id. at 756. Without declaratory actions, the statutes could be ignored by the DWC and the Commissioner with enforcement only on a piece-meal basis by litigants who are able to challenge improper agency actions. 39 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Whether the District Court, or any Court, ultimately rules in Appellant’s favor or not—the District Court certainly can declare rights of the interested parties, an injured worker and an insurance carrier, directly affected by the applicable state agency and agency head, under the statutes as a matter of law especially where administrative remedies have been exhausted. See Tex. Workers' Compensation Ins. Fund v. Tex. Workers' Compensation Comm'n, 124 S.W.3d 813 (Tex. App.--Austin 2003, pet. denied). 17. ENFORCABILITY: UDJA is Especially Necessary where the DWC Refuses to Recognize Chapter 410 District Court Rulings as Legally Binding The DWC’s position on individual Chapter 410 judicial review cases is that mere district court reversals of a final DWC decision under Chapter 410 of the Texas Labor Code are not binding as to the DWC’s interpretation even if it is improper as to any other case. The DWC Appeals Panel has reiterated:28 that the decision of a [city 1] District Court had no effect "beyond its factual context" and did not bind the Texas Workers' Compensation Commission (Commission) as a matter of stare decisis in the Commission's interpretation of the 1989 Act. This shows the Catch-22 that the DWC places all parties under that the DWC and Commissioner’s disregard for a court decision beyond “its factual content” 28DWC APPEAL NO. 050140, 2005 TX Wrk. Comp. LEXIS 57 (decided March 14, 2005) 40 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief unless, as here, the DWC and Commissioner are made parties or intervene. This matter is of significant public importance and concerns the very line drawn as to the entry into course and scope of employment by Texas peace officers. Only after the appellate decision upholding declaratory judgment in Lumbermens become final did the DWC Appeals Panel follow the declaration:29 Lumbermens Mutual Casualty Company filed suit against the Division seeking in part a declaratory judgment that the Advisories are inconsistent with 28 TEX. ADMIN. CODE § 130.1 (Rule 130.1) and that their issuance and application is outside the Division's statutory authority. The Advisories have been declared invalid and their application an ultra vires act. Lumbermens, supra. Therefore, the adoption of an IR that is based on the Advisories is legal error and must be reversed. Prior Appeals Panel decisions applying the Advisories to rate impairment for spinal fusion surgery have been overruled by the Lumbermens case. The DWC will follow a declaratory judgment as to statutory rights and its prior errors, but will not apply a District Court’s reversal of a single workers’ compensation dispute decision beyond the single workers’ compensation claim. The DWC’s own decisions signify why declaratory judgments are allowed and clearly necessary in this matter. 29DWC Appeals Panel No. 071023-s, decided July 23, 2007, 2007 TX Wrk. Comp. LEXIS 54. 41 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief Here are several more final DWC decisions from over the years refusing to follow the law in District Court cases: (1) DWC APPEAL NO. 94994, 1994 TX Wrk. Comp. LEXIS 6081, September 9, 1994: “. . . nor is the Commission joined as a party. The decision is without effect, therefore, beyond its factual context, and certainly the Commission is not bound by such a general judgment of a district court, through stare decisis, in its interpretation of the Section 409.021.” (Emphasis added.) (2) DWC APPEAL NO. 951802, 1995 TX Wrk. Comp. LEXIS 4964, December 13, 1995, emphasizing: “We do not consider the Appeals Panel bound by this district court opinion in a case involving other parties and in which the commission did not participate.” (3) DWC Appeal No. 990005, 1999 TX Wrk. Comp. LEXIS 3029, decided February 19, 1999: “The Appeals Panel is not bound by a district court opinion in a case involving other parties and in which the Commission did not participate. Texas Workers' Compensation Commission Appeal No 94994, decided September 9, 1994.” (Emphasis added.) 42 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief The DWC and the Commissioner should be a party to a proceeding in which legal determinations are sought to bind the DWC and the Commissioner to follow the law. This underlying legal questions have not been declared and determined and are not yet up on appeal, but the declarations sought under the statutes are critical to resolving this matter. 18. Declaratory Judgment Prevents Continued Erroneous Statutory Interpretation by the DWC and the Commissioner In the workers’ compensation area, after final administrative decisions as here, both insurance carriers and injured workers’ have sought declaratory rulings concerning the validity and applicability of the DWC and the Commissioner statutes and rules. See Mid-Century, supra; Fulton v. Associated Indemnity Company, 46 S.W.3d 364 (Tex. App—Austin 2002, pet. denied); Houston General Insurance Co. v. Association Casualty Insurance Co., 977 S.W.2d 634 (Tex. App.—Tyler, no pet.). Venue of the main action shall establish venue of a counterclaim, cross claim, or third-party claim properly joined under the Texas Rules of Civil Procedure or any applicable statute. TEX. CIV. PRAC. & REM. CODE §5.062(a); Howell v. Texas Workers' Compensation Com'n, 143 S.W.3d 416, 433 (Tex. App.--Austin 2004, pet. denied). A declaratory judgment simply declares the rights, status, or other legal relations of the parties; and under Tex. Civ. Prac. & Rem. Code §37.003(a), (b), 43 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief a trial court has the “power to declare rights, status, and other legal relations whether or not further relief is or could be claimed,” and declaration has the “force and effect of a final judgment or decree”. Howell at 432. Without the DWC and the Commissioner present, Appellant’s pleadings and claims for relief would have little effect if not arguably result in an inability to be enforced against the DWC and the Commissioner at all if in fact the DWC and the Commissioner are not a party. CONCLUSION This Court should allow Rosendo Morales to proceed with the declaratory judgment claim and keep as parties both the DWC and the Commissioner, in his official capacity. The jurisdiction exists due to the live controversy, exhaustion of administrative remedies, and the state agency and state official are necessary parties for proper enforceability of the statutes and to ensure proper compliance with statutory terms alleged to be violated. Otherwise only the few who continue to fight will have a chance for justice on a piece by piece basis and the harm may occur again and again. The purpose of the Declaratory Judgment Act is to make the laws clear to all affected and to make sure the laws are properly applied and not violated by the state agency and the head of the state agency. The Judiciary oversees the Executive Branch 44 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief both to uphold its proper actions but to also to protect Texans’ rights to make sure the laws are properly applied and correctly interpreted and rightly enforced. PRAYER Rosendo Morales, Appellant, respectfully prays and ask that this Court reverse the ruling of the District Court on the plea to the jurisdiction granted to the DWC and the Commissioner, and this Court should not allow the dismissal of the DWC and the Commissioner, and that this Court determine that the District Court has jurisdiction to determine the declaratory judgment matters sought by Appellant including against the DWC and the Commissioner. Appellant ask for all other relief to which he is entitled including costs of court. Respectfully, /s/ Brad McClellan Bradley Dean McClellan State Bar No. 13395980 Of Counsel, Law Offices of Richard Pena, P.C. Richard Pena Law Offices of Richard Pena, P.C State Bar No. 00000073 1701 Directors Blvd., Suite 110 Austin, Texas 78744 Brad.McClellan@yahoo.com (512) 327-6884 telephone (512) 327-8354 facsimile Attorney for Appellant 45 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief CERTIFICATE OF COMPLIANCE I certify that I have 10,480 word count checked by the word program in compliance with the Texas Rules of Appellate Procedure. /s/ Brad McClellan Bradley Dean McClellan CERTIFICATE OF SERVICE I certify that a copy of the foregoing Appellants’ Brief was served on the through counsel of record by the method indicated below on May 27, 2015. Adrienne Butcher, Assistant Attorney General Via efiling/eservice Administrative Law Division Office of the Attorney General of Texas P.O. Box 12548 (MC-018), Capital Station Austin, Texas 78711-2548 512-475-4208 Facsimile: (512) 320-0167 adrienne.butcher@texasattorneygeneral.gov Attorneys for DWC and Commissioner Courtesy copy provided to other Defendant Via efiling/eservice below Scott Placek & Matthew Foerster Arnold & Placek, LLC 203 East Main Ave, Ste. 203 Round Rock, TX 78664 Attorneys for Defendant /s/ Brad McClellan Bradley Dean McClellan 46 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief APPENDIX 1. Order Granting Plea to the Jurisdiction of the DWC 2. First Amended Petition and Suit for Declaratory Judgment including the Final DWC Decision and Order 3. AMA Guides Sections for Spine Impairments 47 No. 03-14-00808-CV Rosendo Morales Appellant’s Brief CAUSE NO.269,135.8 ROSENDO MORALES, $ IN THE DISTRICT COURT OF Plaintffi $ $ v. $ ho @ $ .4r TEXAS MUTUAL INSURANCE $ G, {lr: |*rt (-t II coMPANY, $ I q lm Defendant, $ BELL COUNTY, .E* X & $ -r f5ilq ilt 4 '_ $ f'ry TEXAS DEPARTMENT OF INSURANCE. $ r\, nu ,\**,, C'I DIVISION OF WORKERS' $ @ COMPENSATION and COMMISSIONER $ ROD BORDELON,IN HIS OFFICIAL $ CAPACITY, $ Defendants. $ l46THJUDICIAL DISTRICT ORDER On November 2l , 2014, the parties in the above-referenced case appeared before the Court for a hearing on Defendants Division of Workers' Compensation and Commissioner Rod Bordelon's Plea to the Jurisdiction, filed July 29, 2014. After considering the parties' arguments, the applicable law, and the pleadings and record in this case, the Court finds that Defendants Division of Workers' Compensation and Commissioner Rod Bordelon's Plea to the Jurisdiction is meritorious and should be granted. Accordingly, the Court GRANTS Defendants Division of Workers' Compensation and Commissioner Rod Bordelon's Plea to the Jurisdiction. Defendants Division of Workers' Compensation and Commissioner Rod Bordelon are hereby DISMISSED from this case, and all requested relief against them is DENIED. t qii'ilrrTF SCAN /4-B U pfl"{L lllllrilrilltl 287 ORIGINf,, Filed 5l??12O1 4 2:1 9:08 PM cAusE No. 269,135-8 s E IN THE DISTRICT COURT ROSENDO MORALES, Plaintiff s V. s I s BELL COUNTY, TEXAS TEXAS MUTUAL INSURANCE CO., Defendant $ & $ Texas Department of lnsurance-Division of s Workers' Compensation and Commissioner s Rod Bordelon, in his officialcapacity, s Defendants $ t46th tuolclAL DlsrRlcr FIRST TORY J & REOUEST FOR DISCLOSURE PLAINTIFF, ROSENDO MORALES, in the above-entitled and numbered cause, files this Plaintiff's First Amended petition, Request for Declaratory Judgment and Request for Disclosure, and shows the Court: I. DISCOVERY CONTROL PIAN 1. plaintiff requests discovery to be conducted under Level 2 Discovery Control Plan-By Rule. See TEX. R. ClV. P. $190.3. II. INTRODUSTION & PARTIES Z. This is a suit for judicial review lawsuit of a final administrative decision of the Texas Department of tnsurance-Division of Workers' Compensation and for a declaratory judgment concerning the Texas Workers' Compensation Act. 3. plaintiff is Rosendo Morales, a severely injured worker, who resided and resides in Bell County. 4. Defendant is the TEXAS MUTUAL lnsurance company, the lnsurance carrier for purposes of Workers' Compensation. Texas MUtual has been served and has answered. Cause No. 269,135-8 Morales v. Texas Mutual lns, Co & OWC Plaintlff s 1't Amended Jeltrqn-&-EED ssF#t trq' 47 5. Texas Department of lnsurance, Division of Workers' Compensation and Commissioner Rod Bordelon, in his official capacity, which are necessary parties because statutory construction of the agency's interpretation and improper application of the Workers' Compensation Act (the Texas WC Act) is challenged, are defendants, the DWC and the Commissioner herein. Texas Department of lnsurance - Division of Workers' Compensation, DWC, is a Eovernmental unit organized and existing under the law of the State of Texas, and Commissioner Rod Bordelon, in his official capacity, in his official capacity as the Commissioner of the Workers' Compensation Division are located at the Texas Department of lnsurance- Division of Workers' Compensation, 7551 Metro Center Drive, Suite 1.00, Austin, TX, 78744. plaintiff requests service on the DWC and the Commissioner at the above address' III. JURISDICTION & VENUE 6. This Court has jurisdiction under Texas Labor Code Section 410.252 because Rosendo Morales, the injured worker and Plaintiff, resided in Bell County at the time of his injury' IV. BRIEF STATEMENT OF FACTS 7. Rosendo Morales the injured worker and Claimant, suffered a compensable injury on November 22, 2O1O, while in the course and scope of his employment with Perry & Perry Builders lnc., Employer, which provided workers' compensation insurance on the date of inlury through Texas Mutual lnsurance Company' B. Mr. Morales reached maximum medical improvement by statute on December 26, 2012. g. After a Texas Department of lnsurance-Division of Workers' Compensation (DWC) contested case hearing, the challenged disputed issue was: "1. What is the Claimant's impairment rating?" The final DWC determination was a 13% impairment rating as determined Cause No. 269,135-8 Morales v. Texas Mutual lns. Co & DWC Plaintiff s l"Amended JeIiIlQn4-B.EO 48 by the designated doctor, and plaintiff disputes and disagrees with this rating including that it is erroneous. See attached plaintiff Exhibit "A" DWC hearings decision of october 24, invalid and 2013, and notice of becoming the final administrative decision on January 27,201'4' V.RELIEFsoUcHTAsToWoRKERS,CoMPENSATIoNCLAIM 10. Rosendo Morales is aggrieved by and seeks relief from and reversal of the final DWC rating decision and order and contested case hearing decision and order on the impairment issue (see attached Exhibit A), and specifically Rosendo Morales requests this Court to determine that his impairment rating is either 35% as assigned by Dr. Weeks or a32Yo based on Dr. Weeks alternative rating for the cervical spine injury. 11. Further the erroneous 13% impairment rating assigned by the designated doctor is invalid and the designated doctor is not entitled to presumptive weight on judicial review. VI. DECIARATORY JUDGMENT tZ. Rosendo Morales asserts the need for declaratory relief in this matter under the Uniform Declaratory Judgments Act including under Texas Civil Practice & Remedies Code section 37.OO4. Rosendo Morales further requests a declaratory judgment ruling that spine impairment ratings under the Texas Workers' Compensation Act must take into consideration spinal surgeries and the effects of spinal surgeries when the surgeries occur prior to maximum medical improvement being reached. This legal question of whether spinal surgery occurring before MMt must be considered in assigning an impairment rating was left open in Severiano DeLeon v. Royol lndemnity Company,396 S,W.3d 597, 2010 Tex' App. LEXIS 565 (Tex' App'-' Austin 20IQl rev'd on other grounds Severiano DeLeon v. Royal lndem. Co., 396 S.W.3d 527, 2012 Tex. LEXIS 972, 55 Tex. Sup. Ct. J' 108 (Tex' 2012). Cause No. 269,135-8 Morales v. Texas Mutual lns' Co & DWC Plainti s 1" Amend 49 13. plaintiff requests this Court declare that under Texas Labor Code Sections 401'01L and Chapter 408 concerning impairment ratings that the DWC designated doctor's report is legally type invalid because while clearly aware or the pre-MMl surgery completely ignored the serious of a spinal fusion surgery. This requires a declaration of the parties' rights under the Texas Workers, Compensation Act. The date of maximum medical improvement under the Texas Workers' Compensation Act means: (30) "Maximum medical improvement" means the earlier of: (A) the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticiPated; (B) the expiration of 104 weeks from the date on which income benefits begin to accrue; or (C) the date determined as provided by Section 408'104' The Legislature has defined "impairment" as "any anatomic or functional abnormality or loss existing after maximum medical improvement that results from a compensable injury and is reasonably presumed to be permanent." Under Section 401.011 (23) the Legislature's definitions are as follows: (23) "lmpairment" means any anatomic or functional abnormality or loss existing after maximum medical improvement that results from a compensable injury and is reasonably presumed to be permanent' (24) "lmpairment rating" means the percentage of permanent impairment of the whole body resulting from a compensable injury' The Court should declare and enforce against the DWC Defendants and Texas Mutual that an "impairment" must be from an examination done after MMI has been reached and must be based upon the doctor's evaluation of the injured worker's condition after MMI including full considerationofthesurgeriesandtheeffectsof surgerypriortoMMl beingreached, TheDWC Defendants and Texas Mutual have misinterpreted and failed to properly apply the law. The Cause No. 269,135-8 Morales v. Texas Mutual lns. Co & DWC Plaintifl s 1" Amended Petit 50 not ignore and must consider an DWC Defendants and Texas Mutual may pre-MMl rating that does not follow the Texas Workers' Compensation Act which requires This Court surgeries and the effects of the surgery to be considered in assigning an impairment. should so declare and enforce. 14. Further, plaintiff requests this Court to declare that the statutory version of the AMA Guides adopted under Texas Labor Code Section 408.124(c), specifically the fourth edition of the "Guides to the Evaluation of Permanent lmpairment," published by the American Medical Association (the AMA Guides). The DWC Defendants and Texas Mutual have misinterpreted and failed to properly apply the AMA Guides and Defendants may not ignore and must consider invalid an impairment rating that does not follow the AMA Guides which require pre- MMI surgeries and the effects of the surgery to be considered in assigning an impairment. This Court should so declare and enforce. 15. Mr. Morales requests this Court to declare that spinal surgeries and the effects of surgery occurring before maximum medical improvement is reached must be considered in assigning an impairment rating to injured workers under the Texas Workers' Compensation Act' Answering this statutory and administrative rule interpretation will affect the validity of the impairment ratings for spinal injuries under the Texas Workers' Compensation Act. 15. The DWC Defendants and Texas Mutual have not properly applied or interpreted the statutory provisions affecting the DWC Defendants, Texas Mutual lnsurance Company and injured workers with regards to spinal surgeries occurring before maximum medical improvement and the required consideration of such surgeries in assigning impairment ratings under the Texas Workers' Compensation Act and the applicable administrative rules concerning Cause No. 269,135-8 Morales v. Texas Mutual lns. Co & owc plaintiff s 1" Amen 51 maximum medical improvement, spinal surgeries, and impairment ratings. 17. This Court should declare that the Texas Workers' Compensation Act and the AMA Guides require that impairment ratings must take into consideration spinal surgeries and the effects of spinal surgeries occurring prior to an injured worker reaching maximum medical improvement and that any impairment ratings that do not consider such surgeries are legally invalid' lf a conflict exists between the Texas Workers'Compensation Act and the AMA Guides, this Court should declare the Texas Workers'Compensation Act controls and requires pre-MMl surgeries and their effects to be considered in determining an impairment and impairment rating of a worker including Mr. Morales. 18. plaintifl Rosendo Morales, is entitled to recover reasonable and necessary attorney fees that are equitable and just under Texas Civil Practice & Remedies Code section 37.009 because this is a suit in part for declaratory relief including the construction, validity, and the correct application of several statutes and administrative rules. Plaintiff also requests this Court award attorney fees pursuant to the Texas Workers' Compensation Act. VII. REQUEST FOR DISCLOSURE TO AtL DEFENDANTS 19. Under the authority of Texas Rule of Civil Procedure 194, Plaintiff Rosendo Morales requests that Defendants DWC and Commissioner Bordelon and Defendant Texas Mutual tnsurance Company disclose, within 30 days of the service of this request or 50 days if served with the original petition, the information or material described in rule 794.2. VIII. PRAYER For these reasons, Rosendo Morales asks the Court to grant the relief requested herein including for the Court to determine that he is entitled to a 35% impairment rating or Cause No. 269,L35-8 Morales v. Texas Mutual lns. Co & DWC Plaintiff s 1st Amended Petition EIED 52 alternatively a31%rating. Mr. Morales asks this Courtto declare that spinal surgeries and the effects of such surgeries occurring prior to maximum medical improvement must be considered in assigning impairment ratings under the Texas Workers' Compensation Act and under the AMA Guides and that any impairment ratings that do not consider such surgeries are invalid' Mr. Morales asks the Court to set aside as null and void the final DWC decision and order. Mr' Morales also asks that the Court rule in his favor and enter judgment for the relief requested herein and to award his reasonable and necessary attorney fees as allowed under the declaratory judgment act and under the Texas Workers' Compensation Act, court costs and all other relief to which he is entitled. Respectfully submitted, /s/ Brad McClellan Bradley Dean McClellan State Bar No. L3395980 Of Counsel, The Law Offices of Richard Pena, P.C. 170l. Directors Blvd., Suite 110 Austin, Texas 78744 Brad. McClella n @va hoo.com Fax 512.3?7.8354 Telephone 512.327.5884 ATTORNEYS FOR ROSENDO MORALES CERTIFICATE OF SERVICE I certify that on May 22,201.4, a true and correct copy of the above and below was served on: Attention: Matthew Foerster Via eservice and email Arnold & Placek, LLC 203 East Main Ave, Ste. 203 Round Rock, TX 78664 Fax: 512 347.772.1 Attorneys for Defendant /s/ Brad McClellan Brad McClellan Cause No. 269,135-8 Morales v, Texas Mutual lns. Co & DWC Plaintiff s 1st Amendedfelilion EBED 53 TH)ffiS DEPARTNfl HNT OF IN$UHAN#E Drvr$rol{ SF WORKER$' f; SNfl PHNSATIOF{ Sl prefitre hablnr c$fl una persona de hahla hispnna flcerca de ests corr.fi$ encia o d* su reclaruo, sirvase llamar sl l-fr0{h251-7gl! .ianuary ?,'l , 2Qt4 L}T}T OFtsTfiE$ OP RICHARD PENJ{ Appenlll{ur EHJhI}I,BY D. }{CCLEI,LAN L?mt sIHEssoEs fifl;vD gTE rLo Dochet No: 1LtS6576*02-Al AIJStrlit, fH ?fi?44*;tr"14{ Carrier No: 99LUUUUtldUlrH / Ernployeer fln*$tlflfl Mt"lt}Br ErC HrnpNoyen FERRY & PERRY BUTTHfiR$ INC Date of Injury: ll50% 10 5 12 B. Fracture of posterior element (pedicle, lamina, articular process, transverse process) 4 2 5 Note: An impairment due to compression of a vertebra and one due to fracture of a posterior element are combined using the Combined Values Chart (p. 322). Fractures or compressions of several vertebrae are combined using the Combined Values Chart. e. Reduced dislocation of one vertebra. 5 3 6 If two or more vertebrae are dislocated and reduced, combine the estimates using the Combined Values Chart (p. 322). An unreduced dislocation causes impairment until it is reduced; the physician should then evaluate the impairment on the basis of the subject's condition with the dislocation reduced. If no reduction is possible, the physician should evaluate the impairment on the basis of the range of motion and the neurologic findings according to criteria in this chapter and the nervous system chapter. II. Intervertebral disk or other soft-tissue lesion A. Unoperated on, with no residual signs or symptoms 0 0 0 B. Unoperated on, stable, with medically documented injury, pain, and rigidityt associated with none to minimal degenerative changes on structural tests, such as those involving roentgenography or magnetic resonance imaging. 4 2 5 e. Unoperated on, stable, with medically documented injury, pain, and rigidityt associated with moderate to severe degenerative changes on structural tests; includes unoperated on herniated nucleus pulposus with or without radiculopathy 6 3 7 D. Surgically treated disk lesion without residual signs or symptoms; includes disk injection 7 4 8 E. Surgically treated disk lesion with residual, medically documented pain and rigidity 9 5 10 F. Multiple levels, with or without operations and with or without residual signs or symptoms Add 1% per level G. Multiple operations with or without residual symptoms: 1. Second operation Add 2% 2. Third or subsequent operation Add 1% per operation III. Spondylolysis and spondylolisthesis. not operated on A. Spondylolysis or grade I (1 %-25% slippage); or grade II (26%-50% slippage) spondylolisthesis, accompanied by medically documented injury that is stable, and medically documented pain and rigidity with or without muscle spasm 6 3 7 B. Grade III (51 %-75% slippage) or grade IV (76%-100% slippage) spondylolisthesis, accompanied by medically documented injury that is stable and medically documented pain and rigidity with or without muscle spasm 8 4 9 IV. Spinal stenosis. segmental instability. spondylolisthesis. fracture. or dislocation. operated on A. Single-level decompression without spinal fusion and without residual signs or symptoms 7 4 8 B. Single-level decompression with residual signs or symptoms 9 5 10 e. Single-level spinal fusion with or without decompression without residual signs or symptoms 8 4 9 D. Single-level spinal fusion with or without decompression with residual signs or symptoms 10 5 12 E. Multiple levels, operated on, with residual, medically documented pain and rigidity with or without muscle spasm Add 1% per level 1. Second operation Add 2% 2. Third or subse quent 0 peration Add 1% pero peration *Instructions: 1. Identify the most significant impairment of the primarily involved region. 2. The diagnosis-based impairment estimates and percents shown above should be combined with range of motion impairment estimates and with whole-person impairment estimates involving sensation, weakness, and conditions of the musculoskeletal, nervous, or other organ systems. 3. List the diagnosis-based, range of motion, and other whole-person impairment estimates on the Spine Impairment Summary Form (Fig. 80, p. 134). tTbe words "with medically documented injury, pain, and rigidity" imply not only that an injury or illness has occurred, but also that the condition is stable, as shown by the evaluator's history, examination, and other data, and that a permanent impairment exists, which is at least partly due to the condition being evaluated and not only due to preexisting disease. Glossary D efinitions related to impairment assume importance, because terms associated with impairment evaluations may have special Evaluation ofpermanent impairment is acquisition and analysis of information, including clinical evaluation, that is carried out according to Chapters 1 and 2 and meanings in a legal context beyond their usual mean- other applicable parts of the Guides. ings in medical communications. This glossary pro- Impairment rating consists of analyzing data accumu- vides a guide to the terms that should be used in lated in the course of an impairment evaluation and reporting, analyzing, understanding, and discussing comparing those data with Guides criteria to estimate impairment evaluations and estimates carried out the extent of the impairment. Impairment ratings according to Guidescriteria. It also defines important prepared according to Guides criteria are estimates of terms in the fields of disability, workers' compensa- impairment. tion, and short- and long-term disability and consid- ers Social Security System disability determinations Impairment reporting is explaining the information and the Americans with Disabilities Act ofl992. acquired in the course of evaluating, analyzing, and estimating the exten t of an impairmen t. An impairment report should be prepared according to Terms Used in Assessments According to the procedures described in Chapter 2 and other Guides applicable parts of the Guides. 1. Impairment: Impairment is the loss, loss of use, or 2. Apportionment: This is an estimate of the degree to derangemen t of any body part, system, or function. which each of various occupational or nonoccupa- tional factors may have caused or contributed to a Permanent impairment is impairment that has become particular impairment. For each alleged factor, two static or well stabilized with or without medical treat- criteria must be met: ment and is not likely to remit despite medical treatment. a. The alleged factor could have caused or contributed A permanent impairment is considered to be to the impairment, which is a medical determination unlikely to change substantially and by more than 3% (see "causation;' p. 316). in the next year with or without medical treatment. b. In the case in question, the factor did cause or If an impairment is not permanent, it is inappropriate contribute to the impairment, which usually is a to characterize it as such and evaluate it according to nonmedical determination. The physician's analysis Guides criteria. and explanation of causation is significant. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4066810. Public record. Not legal advice.