Pansegrau v. National Union Fire Ins. Co. of Pittsburgh, Pa. ( 1994 )

United States Court of Appeals,
Fifth Circuit.
No. 93-1322.
Sue PANSEGRAU, Plaintiff-Appellee Cross-Appellant,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.,
Defendant-Appellant Cross-Appellee.
June 29, 1994.
Appeals from the United States District Court for the Northern
District of Texas.
Before GOLDBERG, DAVIS, and DeMOSS, Circuit Judges.
GOLDBERG, Circuit Judge:
In this Texas workers' compensation appeal, National Union
Fire Insurance Company ("National Union") seeks to have a judgment
in favor of plaintiff Sue Pansegrau ("Pansegrau") reversed on
various grounds. Pansegrau, for her part, cross-appeals the
decision of the district court to reduce the amount of her
judgment. Our interpretation of Texas workers' compensation law
reveals no basis for reversing the judgment in Pansegrau's favor.
It does, however, show that the district court's decision to reduce
Pansegrau's benefits was erroneous and should be reversed.
I. FACTS
In the early morning hours of March 8, 1990, Pansegrau, a
registered nurse, was on duty at St. Paul Hospital in Dallas,
Texas. While speaking with a co-worker, Pansegrau, without warning
and without discoverable cause, suddenly lost consciousness and
fell to the ground. She took no action to break her fall and the
1
left side of her head hit the hard tile floor. The impact of her
fall caused a basal skull fracture and a brain stem injury.
Pansegrau filed a claim for workers' compensation benefits.
After the Workers' Compensation Commission awarded her
compensation, the workers' compensation carrier, National Union,
appealed by filing the instant lawsuit in the federal district
court below. The court held separate trials on liability and
damages. After a trial on the question of National Union's
liability, the jury returned a verdict in favor of Pansegrau. The
jury found that Pansegrau's injury was sustained in the course of
her employment and that she was therefore entitled to compensation.
By consent of the parties, the question of damages was
referred to a magistrate. The district court adopted the
magistrate's findings that Pansegrau was only entitled to recover
$73,369.78 in damages. Although she had in fact incurred an
additional $281,706.78 in fair and reasonable medical expenses, the
court reasoned that she could only recover a part of her total
medical expenses because the other expenses had either been paid by
Pansegrau's health insurance carrier or were written off by the
health care providers as a professional courtesy to her husband who
is himself a doctor. The magistrate concluded: "Since plaintiff
has never been charged for any expenses associated with services
rendered ... she is not entitled to recover damages for such
medical expenses."
On appeal, National Union disputes the finding of liability
and argues that Pansegrau has failed to show her injury occurred
2
"in the course of employment" so as to entitle her to workers'
compensation benefits under Texas law. National Union also alleges
sundry other legal errors by the district court. Pansegrau, on
cross-appeal, claims that she is entitled to recover the additional
past medical expenses.
II. ANALYSIS
A. National Union's Allegations of Error
National Union contends that the district court erroneously
interpreted the requirements for a valid workers' compensation
claim. Initially, National Union alleges that there was not
sufficient evidence to support the jury's findings. The disputed
findings include that Pansegrau's injury was sustained "in the
course of employment" and that Pansegrau did not make an election
of remedies when she pursued and accepted benefits from her
employer's group health insurance carrier. Further, National Union
alleges that the district court erroneously refused to give a jury
instruction explaining the "in the course of employment" phrase and
erred in awarding lifetime benefits to Pansegrau as a matter of
law. As we show below, National Union's contentions do not justify
reversal of the trial court.1
1. Idiopathic Falls
An injured employee in Texas may recover workers' compensation
benefits if the injury was sustained "in the course of employment."
1
National Union also argues that the district court made
additional procedural mistakes in conducting the trial. Having
reviewed the record and the merits of these contentions, we find
no reason to reverse the trial court's decision based on these
points of error.
3
Tex.Rev.Civ.Stat.Ann. art. 8309, § 1(4), (Vernon 1967) (repealed
1991).2 The statute defines "injury sustained in the course of
employment," to include:
injuries of every kind and character having to do with and
originating in the work, business, trade or profession of the
employer received by an employee while engaged in or about the
furtherance of the affairs or business of his employer.
Id. Texas courts have culled two essential requirements out of
this statutory definition: the injury (1) must have occurred while
the claimant was engaged in the business of his or her employer;
and (2) must originate in and have to do with the employer's
business. Texas Employers Insurance Association v. Page, 553
S.W.2d 98, 99 (Tex.1977).
National Union concedes that Pansegrau meets the first
requirement; she was on duty and engaged in her employer's
business at the time she suffered her injuries. The controversy in
this case concerns the interpretation of the requirement that "the
injury originated in the employer's work, trade, business or
profession." Id. National Union argues that Pansegrau's injury
did not originate in the hospital's business or in her profession
as a nurse. The evidence shows that she was standing up and
talking when she lost consciousness, fell down, and hit her head on
the floor. The doctors who testified to Pansegrau's injuries could
not identify a particular reason for the original loss of
2
The statute in effect at the time of Pansegrau's injury in
1990 was the old workers' compensation law, Tex.Rev.Civ.Stat.Ann.
art. 8306, et seq. (Vernon 1967) (repealed 1991, now Art. 8308-
1.01, et seq. (Vernon Supp.1992)). Although it has no effect on
this case, the definition of this term was reworded in the new
statute but was not substantively changed.
4
consciousness. They did testify, however, that her current
disabilities are a direct result of her head hitting the hard tile
floor.
National Union argues that Texas requires a causal connection
between the employee's work conditions and the injury. The injury,
it asserts, must result "from a risk or hazard which is necessarily
or ordinarily or reasonably inherent in or incident to the conduct
of such work or business." American General Ins. Co. v. Williams,
149 Tex. 1, 227 S.W.2d 788, 790 (1950); see also City of Garland
v. Vasquez, 734 S.W.2d 92, 96 (Tex.App.—Dallas 1987, writ ref'd
n.r.e.). Because there was no evidence linking Pansegrau's loss of
consciousness to any particular risk or condition inherent to her
position as a nurse at St. Paul Hospital, National Union claims
that Pansegrau's injuries did not arise out of her employment.
Based upon the causal connection requirement, National Union
contends that the district court made two separate errors in the
conduct of the trial below. First, it argues that there was
insufficient evidence to support the jury's finding that
Pansegrau's injury occurred in the course of her employment. Next,
National Union contends that the trial court should have issued a
jury instruction which embodied National Union's interpretation of
the causal connection requirement. We conclude that National
Union's interpretation of the causality requirement is
jurisprudentially incorrect and therefore find no merit to its
allegations of error.
The case law interpreting and implementing the Texas worker's
5
compensation statute has provided compensation to employees who
fall on the job for unknown reasons and are injured as a result.
See Garcia v. Texas Indemnity Ins. Co., 146 Tex. 413, 209 S.W.2d
333, 336 (1948) (granting workers' compensation benefits following
an idiopathic fall3); Page, 553 S.W.2d at 102 (same).4 This line
of cases extends the principle that a "pre-disposing bodily
infirmity will not preclude compensation." INA of Texas v. Howeth,
755 S.W.2d 534, 536 (Tex.App.—Houston [1st Dist.] 1988, no writ).
In idiopathic fall cases, although the condition which caused the
fall is unknown, if the worker was injured by the fall itself, he
or she can claim compensation for injuries sustained as a result.
Our decision in this case follows a series of Texas decisions
in which the employee was allowed to collect for injuries that
occurred after an unexplained fall. The principle found its
earliest incarnation in Garcia where the Texas Supreme Court
allowed an injured employee to recover workers' compensation
benefits after he suffered what the court assumed was an epileptic
attack and fell and hit his head on a steel post. 209 S.W.2d at
336. The court held that even if the fall was precipitated by some
underlying idiopathic condition and even if "[t]he risk may be no
different in degree or kind than those to which he may be exposed
3
An idiopathic fall is one for which there is no known
cause.
4
This result is consistent with the intention of Texas
courts to liberally construe the workers' compensation statute in
favor of employees. Yeldell v. Holiday Hills Retirement &
Nursing Center, Inc., 701 S.W.2d 243, 245 (Tex.1985); Montgomery
County v. Grounds, 862 S.W.2d 35, 43 (Tex.App.—Beaumont 1993,
writ denied).
6
outside of his employment[, t]he injury is compensable, not because
of the extent or particular character of the hazard, but because it
exists as one of the conditions of the employment." Id. at 337.
While it seemed the court considered the presence of a steel post
as a key factor in this case, later decisions interpreting Garcia
have not emphasized this element in their analysis of idiopathic
falls.
Following Garcia, a Texas court of appeals allowed recovery
when an employee's idiopathic condition caused him to lose
consciousness and fall to the floor where he received a fatal head
injury. General Ins. Corp. v. Wickersham, 235 S.W.2d 215, 219
(Tex.Civ.App.—1950, writ ref'd n.r.e.). The Wickersham court held
that "[w]e can find no sound reason for denying a recovery where
the fall is to the floor, when recovery is allowed where the fall
is from a ladder, or platform or similar place." Id.; see also
American General Ins. Co. v. Barrett, 300 S.W.2d 358, 363
(Tex.Civ.App.1957, writ ref'd n.r.e.) (idiopathic fall case holding
that a "hard-surfaced road was an instrumentality essential to the
work of the employer and falling against it was a hazard to which
Barrett was exposed because of his employment").
In Page the Texas Supreme Court faced a situation where a
bank guard walking across a level parking lot fell when his right
knee buckled. The court made clear that where an employee falls to
the ground due to some unidentified cause, there remains a question
of fact as to "whether the injury originated out of Page's
employment, that is whether there was a sufficient causal
7
connection between the conditions under which his work was required
to be performed and his resulting injury." Page, 553 S.W.2d at
102. The crux of this holding is that where an employee has an
idiopathic condition which precipitates a fall onto level ground,
the employee can still assert a causal connection between the
injury and a condition of employment despite the fact that no one
has been able to identify the cause of the fall. For this reason,
in an idiopathic fall case such as this, summary judgment (or
directed verdict) against the employee on this basis is
inappropriate. Id.
A fair reading of the case law compels the conclusion that as
long as the employee traces the cause of her injuries to the fall
itself rather than the underlying condition, the injuries are
compensable. Pansegrau demonstrated that an idiopathic condition
caused her to fall while on the job. She showed that her injuries
were a result of that fall and not the underlying condition which
triggered the fall. She has therefore provided sufficient evidence
for a jury to find that the injuries arose out of her employment.
In sum, the case law supports Pansegrau's theory of recovery and
demonstrates no reasonable basis for reversing the judgment in her
favor.
2. Election of Remedies
An injured employee's application for health insurance
benefits may, under a limited set of circumstances, constitute an
election of remedies that will relieve the worker's compensation
carrier from liability. The doctrine applies to bar a claimant
8
from seeking relief when the employee:
(1) ... successfully exercises an informed choice (2) between
two or more remedies, rights, or states of facts (3) which are
so inconsistent as to (4) constitute manifest injustice.
Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851 (Tex.1980).
National Union alleges that Pansegrau made an election of remedies
and the jury's finding to the contrary was unsupported by the
evidence.5
The record in this case shows that Pansegrau by way of her
husband, Dr. Don Pansegrau, initially sought coverage for her
injury through workers' compensation. National Union denied the
claim on April 9, 1990 as non-work related. Faced with mounting
medical bills, Pansegrau's husband filed claims with her employer's
group health insurance carrier. The health insurance carrier
eventually paid out more than $250,000 in claims to reimburse
Pansegrau's medical expenses. National Union asserts that by
accepting health insurance benefits, Pansegrau made an informed
decision to forgo any claim to workers' compensation.
The case law, however, shows that Pansegrau's claim is not
barred by the election of remedies defense. National Union cannot
prove the required elements of this defense. Texas courts
following Bocanegra have held that "there is no election, that is,
no inconsistency in choices, when one first pursues a right or
5
National Union also argues that Pansegrau ratified an
election made by her health insurance carrier because she
accepted the payments by that carrier for her medical expenses.
Because, as shown below, the election of remedies argument fails,
the ratification defense similarly cannot carry any force. There
can be no ratification of an election if there has been no
election.
9
remedy which proves unfounded and then pursues the one that is
allowed." Plate & Platter, Inc. v. Wolf, 780 S.W.2d 453, 456
(Tex.App.—Dallas 1989, writ denied). Pansegrau opted to receive
payments from her employer's health insurance to cover her medical
expenses only after she was denied workers' compensation benefits
by National Union. She could not, therefore, have made an informed
decision to relinquish her rights to pursue the workers'
compensation benefits because those benefits were not an option at
the time she elected to receive payment from the group health
carrier. See Allstate Ins. Co. v. Perez, 783 S.W.2d 779, 781
(Tex.App.—Corpus Christi 1990, no writ) (election of remedies
unavailable as a defense where cause of injury was uncertain and
where workers' compensation carrier denied liability); see also 75
Tex.Jur.3d Work Injury Compensation § 358 (1991) ("Where a
workman's employer carried, in addition to workers' compensation
coverage, a group insurance policy with another company for the
benefit of its employees, which excluded incapacity resulting from
an injury compensable under the workers' compensation laws, and the
workman claimed and received benefits under the group policy,
neither the doctrine of election of remedies nor that of estoppel
was applicable to bar the workman's claim for compensation against
the workers' compensation insurance carrier.").
Moreover, National Union has not shown that Pansegrau "took
those actions knowing the effect, that is that [she] weighed the
advantages of choosing health insurance over workers' compensation,
and then chose health insurance benefits." United States Fire Ins.
10
Co. v. Pettyjohn, 816 S.W.2d 839, 842 (Tex.App.—Fort Worth 1991).
Pansegrau's decision was not informed, nor, for that matter, was it
even a decision. The jury's finding that there was no election of
remedies was therefore supported by substantial evidence.
3. Permanent Injury
National Union additionally challenges the jury's award of
lifetime benefits to Pansegrau alleging that the finding of total
and permanent loss of the use of her right leg and right arm do not
support such an award. According to National Union, article 8306
§ 10(b)6 of the Texas workers' compensation statute permits
compensation for a permanent injury only if the injury is listed in
section 11a of that article.7 Compensation is otherwise given
6
Section 10(b) provides:
If the injury is one of the six (6) enumerated in
Section 11a of this article as constituting conclusive
total and permanent incapacity, the association shall
pay the compensation for the life of the employee, but
in no other case of total permanent incapacity shall
the period covered by such compensation be greater than
four hundred and one (401) weeks from the date of
injury. For the purpose of this section only, the
total and permanent loss of use of a member shall be
considered to be the total and permanent loss of the
member.
7
Section 11a provides:
Injuries constituting total and permanent incapacity.
In cases of the following injuries, the incapacity
shall conclusively be held to be total and permanent,
to-wit:
(2) The loss of both feet at or above the ankle.
(3) The loss of both hands at or above the wrist.
(4) A similar loss of one hand and one foot.
11
under the general scheme, which limits medical payments to 401
weeks.
National Union claims that the jury finding that Pansegrau
suffered the total loss of use of her right leg and right arm was
insufficient to justify an award under the specific language of
section 11a of the statute. That language specifies that an
employee's injuries are to be considered conclusively permanent and
total where the worker loses a foot "at or above the ankle" and a
hand "at or above the wrist". Because the jury only found that
Pansegrau suffered the loss of use of her right leg and right arm
instead of her foot and hand, National Union maintains that the
court improperly determined that she had a permanent and total
injury under Section 11a justifying the payment of lifetime
benefits under Section 10(b).
Texas courts addressing this specific issue have refused to
construe the statute in the manner requested by National Union. In
Texas General Indemnity Co. v. Martin, 836 S.W.2d 636, 638
(Tex.App.—Tyler 1992, no writ), a Texas court of appeals adverted
to the portion of 11a which states that "[t]he above enumeration is
not to be taken as exclusive" and inferred that a "total and
permanent loss of use of a leg at or above the ankle necessarily
inflicts loss of use of the attached foot at or above the ankle.
If the leg cannot be used, neither can the foot." Id. at 638
The above enumeration is not to be taken as exclusive
but in all other cases the burden of proof shall be on
the claimant to prove that his injuries have resulted
in permanent, total incapacity.
12
(emphasis added); see also Texas Employers' Ins. Ass'n v.
Gutierrez, 795 S.W.2d 5, 7 (Tex.App.—El Paso 1990, writ denied)
("the finding of "total loss of use of her right leg' encompasses
the loss of the foot at or above the ankle").8 We conclude that
the district court properly determined that the severity of
Pansegrau's injury justified payment of lifetime benefits.
B. Pansegrau's Allegations of Error in Reducing the Judgment
The magistrate judge found that although an additional
$281,706.78 of Pansegrau's medical expenses were "medically
necessary" and "fair and reasonable," Pansegrau could not recover
these charges from National Union because they were either paid by
her health insurance or written off by the health care providers as
a courtesy to her husband. The magistrate judge concluded that
because she was not charged for these expenses, the court would not
allow her to recover damages for these expenses.
In her cross-appeal, Pansegrau argues that she is entitled to
recover the additional expenses disallowed by the lower court. We
agree. We are bound by the decision in Standard Fire Ins. Co. v.
Ratcliff, 537 S.W.2d 355 (Tex.Civ.App.—Waco 1976, no writ), which
8
National Union cites to the decision in Northwestern
National Casualty Co. v. McCoslin, 838 S.W.2d 715 (Tex.App.—Waco
1992, writ denied), to support its argument. However, that case
ignores the language of the statute itself which states that the
enumeration is not exclusive, fails to acknowledge the prior
authority cited above, and involved an individual who, despite
the injuries to his legs, was able to "run, walk, stoop over,
squat, climb stairs, ride a bike, play basketball, and drive a
car." Id. at 716. Also, we decline to take McCoslin as
persuasive authority because that decision fails to interpret the
provisions of the workers' compensation act liberally. See
Yeldell, supra note 3.
13
considered a workers' compensation claimant who had received
payment for her injuries from her health insurance carrier. The
court held that the employee could additionally recover a judgment
against the workers' compensation carrier because Texas law places
an unqualified obligation upon those carriers to provide medical
services to injured employees. "The rule is well established in
workmens' compensation cases that where the claimant's medical
expenses were paid by a third party, the claimant is not deprived
of his right to recover the value of such services by the workmens'
compensation carrier." Ratcliff, 537 S.W.2d at 359 (citing Cooper
v. Argonaut Ins. Co., 430 S.W.2d 35, 38 (Tex.Civ.App.—Dallas 1968,
writ ref'd n.r.e.); Northwestern National Ins. Co. v. Kirchoff 427
S.W.2d 638, 642 (Tex.Civ.App.—Houston 1968, no writ)). This
holding was recently reaffirmed in Cigna Ins. Co. of Texas v.
Evans, 847 S.W.2d 417, 423 (Tex.App.—Texarkana 1993, no writ).9
Finding no contrary authority, we hold that the district court
erred in reducing Pansegrau's recovery by the amount paid by her
employer's insurance carrier.
Similarly, those expenses which were written off by the
health care providers should not have been deducted from
Pansegrau's recovery. Such a reduction contradicts the line of
9
Other authority for this rule includes the following
statement from Texas Jurisprudence: "The fact that a workers'
compensation claimant has received or will receive from a
collateral source payments that may have some tendency to
mitigate the consequences of the injury that he or she otherwise
would suffer may not be taken into consideration in assessing the
recovery to which the claimant may be entitled." 75 Tex.Jur.3d
Work Injury Compensation § 358 (1991).
14
Texas cases which allows recovery for nursing services provided at
no cost by family members. See e.g. Houston General Ins. Co. v.
Hamilton, 634 S.W.2d 18, 20 (Tex.App.—Beaumont 1982, writ dism'd
w.o.j.) ("The fact that his mother and grandfather would have
helped him anyway without pay is immaterial.").
To the extent that there is a problem with "double recovery"
here, it may be addressed by an assignment by Pansegrau of her
workers' compensation recovery to the private health insurance
company that paid her bills or the providers that wrote off her
care. The workers' compensation statute specifically provides for
an assignment under the circumstances of this case: "In the event
the association denies liability in a claim and an accident or
health insurance company provides benefits to the employee for
medical aid, hospital services, nursing services or medicine, then
the right to recover such amount may be assigned by the employee to
the health or accident insurance company." Tex.Rev.Civ.Stat.Ann.
art. 8306, § 3(c) (Vernon Supp. 1994) (repealed 1991). None of the
parties with potential rights of subrogation or assignment,
however, are a party to this action.
The magistrate judge found that an additional $281,706.78 in
past medical expenses were necessary, fair, and reasonable but were
not included in Pansegrau's award. We believe the district court
erred in making these deductions and conclude that the amounts
should be reinstated.
III. CONCLUSION
The decision of the trial court finding National Union liable
15
for Pansegrau's medical expenses is AFFIRMED. The decision
reducing the award by the amount of expenses paid by the health
insurance carrier or written off as professional courtesy is
REVERSED and we REMAND this case back to the district court with
instructions to enter judgment in the appropriately adjusted
amount.
16