Texas Dept. of Insurance, Worker's Comp Division v. Roel De Los Santos , 446 S.W.3d 800 ( 2014 )

Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-13-00419-CV
TEXAS DEPARTMENT OF INSURANCE, Workers’ Compensation Division,
Appellant
v.
De Los Santos
Roel DE LOS SANTOS,
Appellee
From the 229th Judicial District Court, Duval County, Texas
Trial Court No. DC-11-147
Honorable Ana Lisa Garza, Judge Presiding
Opinion by: Rebeca C. Martinez, Justice
Concurring Opinion by: Patricia O. Alvarez, Justice
Sitting: Marialyn Barnard, Justice
Rebeca C. Martinez, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: August 27, 2014
AFFIRMED AS MODIFIED
The Texas Department of Insurance, Division of Workers’ Compensation (“the Division”)
appeals from a trial court judgment awarding Roel De Los Santos lifetime income benefits. The
Division argues that the evidence is insufficient to support the award of lifetime income benefits
and that the trial court lacked jurisdiction to order the Subsequent Injury Fund to pay lifetime
income benefits. We modify the judgment to delete the language ordering the Subsequent Injury
Fund to pay the lifetime income benefits. As modified, we affirm the judgment of the trial court.
04-13-00419-CV
BACKGROUND
On June 17, 1987, De Los Santos, a heavy equipment operator, sustained a work-related
injury to his left wrist. De Los Santos underwent five surgeries on his left hand, which was
completely fused twice. He returned to work with the same employer approximately two and a
half years later. Although pain prevented him from gripping the knob of the equipment he
operated, he was able to use his left palm, and primarily operated equipment using his right
dominant hand.
On July 25, 1994, De Los Santos was injured in a work-related motor vehicle accident that
fractured his right radius bone and trapezoid wrist bone. After seeing two different physicians, De
Los Santos was referred to his original surgeon, Dr. David Parker, who performed a limited right
wrist fusion on August 26, 1994 and also removed his right pisiform (a small wrist bone) on
January 13, 1995.
De Los Santos continued to complain of pain over the next two years, and on June 16,
1997, Dr. Parker performed a right-side carpal tunnel release. On July 6, 1998, Dr. Edwin
Melendez performed an ulnar nerve transposition on De Los Santos, repositioning his ulnar nerve
under the muscles at the elbow. Following this surgery, De Los Santos developed a number of
complications. Dr. Melendez suspected that De Los Santos was suffering from Reflex
Sympathetic Dystrophy, also known as Complex Regional Pain Syndrome (“CRPS I”). Another
physician, Dr. Dennis Lee, performed a bone scan on November 10, 1998 and ruled out CRPS I.
Dr. Melendez subsequently referred De Los Santos to a pain management clinic, where he was
treated from 1999-2009.
Thereafter, De Los Santos and/or his medical records were evaluated by four different
physicians, whose opinions differed regarding whether De Los Santos suffered from CRPS I and
as to the severity of his impairment, if any. Dr. Barton Huddleston did not treat De Los Santos,
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but conducted a peer review for Texas Mutual Insurance Company of De Los Santos’s medical
records and found that the medical records lacked critical findings needed to support a diagnosis
of CRPS I. He noted that the records reflected considerable pre-existing conditions in both wrists
and that De Los Santos did not have a complete loss of use of hands at or above the wrist. In June
2001, Dr. Charles Kennedy evaluated De Los Santos and found CRPS I in De Los Santos’s right
“upper limb.” In 2003, Dr. Ahmad Khalifa conducted a peer review for Texas Mutual Insurance
Company. Dr. Khalifa found that a diagnosis of CRPS I was not supported, and had previously
been ruled out. He diagnosed De Los Santos with “postoperative right ulnar neuropathy.” In his
opinion, De Los Santos’s complaints of pain were not related to the compensable injury, which
had completely healed. In 2010, Dr. Daniel Boudreau, the designated doctor, examined De Los
Santos. He reported, “[e]xtent of injury is right wrist injury and Reflex Sympathetic Dystrophy
Severe both hands and arms.” Dr. Kennedy evaluated De Los Santos again in 2012. In his report,
Dr. Kennedy opined that De Los Santos has “minimal use of his hands, which do not allow for any
type of meaningful employment.”
After exhausting his Workers’ Compensation temporary benefits, De Los Santos sought
lifetime income benefits (“LIBs”) from Texas Mutual Insurance Company in a contested case
hearing pursuant to section 410.026 of the Texas Labor Code. The issues before the Division
were: (1) whether De Los Santos was entitled to LIBs based on the total and permanent loss of use
of both his hands; and (2) whether the compensable injury extended to include CRPS I to both
hands, arms, right shoulder, anxiety, insomnia, and sexual dysfunction. The Division found: (1)
De Los Santos was not entitled to collect LIBs from Texas Mutual Insurance Company because
he had not established a total and permanent loss of use of both hands; and (2) his 1994
compensable injury did not extend to include the subsequent conditions he alleged in seeking LIBs.
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After the Division’s Appeals Panel upheld the Hearing Officer’s denial of LIBs, De Los
Santos filed suit against Texas Mutual Insurance Company for judicial review. The Division
exercised its statutory right to intervene in the suit to defend its decision. A bench trial was
conducted at which De Los Santos testified, and the trial court reviewed his medical records and
the deposition testimony of Dr. Kennedy. The trial court reversed the decision of the Appeals
Panel and entered judgment in favor of De Los Santos. The trial court found that the 1994
compensable injury extends to include CRPS I to both the right hand, upper arm extremity, and
right shoulder, and insomnia due to pain.1 The trial court further found that De Los Santos had
permanently lost the use of both hands such that he was prevented from procuring and retaining
employment requiring their use. The trial court issued a final judgment and order finding that De
Los Santos is entitled to LIBs and ordering the Division’s Subsequent Injury Fund to pay them to
him from August 26, 1994 through the present and continuing into the future in accordance with
Texas law. Attorney’s fees were also awarded. The Division timely appealed.
STANDING
Before addressing the Division’s complaints on appeal, we must first resolve De Los
Santos’s contention that the Division lacks standing to challenge the trial court’s judgment
awarding LIBs. De Los Santos asserts that there is no procedure by which the Division may
independently challenge the determination of his entitlement to LIBs, and therefore this appeal
should be dismissed for lack of subject matter jurisdiction. In support, De Los Santos relies on
Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492 (Tex. 2013). The Division contends that Adcock
is distinguishable. We agree.
1
The trial court found that the compensable injury does not extend to include anxiety or sexual dysfunction.
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The narrow issue presented in Adcock was whether the Workers’ Compensation Act
permits the “reopening” or periodic revisiting of a claimant’s continuing eligibility for LIBs. Id.
at 494. In that case, the insurance carrier sought a new contested case hearing on the claimant’s
continuing eligibility for LIBs based on the carrier’s belief that the claimant may have regained
the use of his extremities. Id. at 493-94. The proceeding was brought over ten years after the LIB
determination even though the carrier had never sought judicial review of the LIB award. Id. The
court held that the claimant’s LIB determination could not be reopened and withdrawn based on
changed circumstances. Id. at 497. The court did not hold, as De Los Santos claims it did, that
the Division is prohibited from seeking judicial review of a LIB determination under Section
410.301. See TEX. LAB. CODE ANN. § 410.301 (West 2006) (permitting judicial review of issues
regarding income benefits). In fact, the issue of appellate review was not even before the court in
Adcock.
Here, the Division was an intervenor in the underlying proceeding and is therefore a proper
party. See id. § 410.254 (West 2006); Tex. Workers’ Comp. Comm’n v. Hartford Acc. & Indem.
Co., 952 S.W.2d 949, 953 (Tex. App.—Corpus Christi 1997, pet. denied). As such, the Division
has standing to challenge the trial court’s final judgment ordering that De Los Santos is entitled to
LIBs. See TEX. LAB. CODE ANN. § 410.301. We therefore reject De Los Santos’s complaint, and
hold that the Division has standing to challenge the trial court’s judgment.
SUBSEQUENT INJURY FUND
In its first issue, the Division argues that the trial court lacked jurisdiction to order the
Subsequent Injury Fund (“the Fund”) to pay De Los Santos LIBs before he presented his LIB
request to the Fund and pursued any disagreement with the determination of his LIB payments
through a separate proceeding, as required by Chapter 410 of the Labor Code. Specifically, the
Division argues that although the trial court had the authority to determine whether De Los Santos
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was entitled to LIBs following the Division’s final administrative disposition of his claim against
Texas Mutual Insurance Company, it lacked jurisdiction to order the Fund to pay LIBs to De Los
Santos. See, e.g., TEX. LAB. CODE ANN. § 410.257(d), (f) (West 2006) (judgment entered by a
court on judicial review of the appeals panel decision may not order reimbursement from the
subsequent injury fund; noncomplying order is void). The Division contends that the proper
procedure would have been for De Los Santos to present the trial court’s final judgment to the
Fund for payment. See, e.g., Lumbermens Mut. Cas. Co. v. Portillo, No. 13-10-00470-CV, 2011
WL 2976869, at *2 (Tex. App.—Corpus Christi July 21, 2011, no pet.) (mem. op.) (once the trial
court renders judgment regarding impairment rating, “[i]t is then incumbent upon [the insurance
carrier] to present that judgment to the [Fund]” for reimbursement); 28 TEX. ADMIN. CODE §
116.11 (2014) (Tex. Dep’t of Ins., Div. of Workers’ Comp.) (request for reimbursement from the
Subsequent Injury Fund).
The issue before us appears to be one of first impression. In determining whether the trial
court was authorized to order the Fund to pay LIBs directly to De Los Santos, we acknowledge
that the Workers’ Compensation Commission and the Fund are creatures of statute. See Second
Injury Fund v. Keaton, 345 S.W.2d 711, 713 (Tex. 1961). As such, we must be “mindful of the
principle that, when the Legislature has enacted a comprehensive statutory scheme, we will refrain
from imposing additional claims or procedures that may upset the Legislature’s careful balance of
policies and interests.” Ritchie v. Rupe, No. 11-0447, ---S.W.3d---, 2014 WL 2788335, at *14
(Tex. 2014) (citing Adcock, 412 S.W.3d at 493 (noting that the Texas Workers’ Compensation Act
“is a comprehensive statutory scheme, and therefore precludes the application of claims and
procedures not contained within the Act.”)). Under Labor Code section 402.061, which authorizes
the Workers’ Compensation Commission to adopt regulations to enforce the Texas Workers’
Compensation Act, the Workers’ Compensation Commission has adopted regulations to
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implement the Fund. See TEX. LAB. CODE ANN. § 402.061 (West 2006); 28 TEX. ADMIN. CODE
§§ 131.2-131.4 (2014).
The Fund is a dedicated account in the general revenue fund used only for purposes
specified by statute. See TEX. LAB. CODE ANN. § 403.006 (West Supp. 2014); Vista Med. Ctr.
Hosp. v. Tex. Mut. Ins. Co. 416 S.W.3d 11, 22 n.17 (Tex. App.—Austin 2013, no pet.). Section
403.006 provides that the Fund is liable for reimbursement of insurance carriers for overpayment
of benefits as well as the payment of compensation as provided by Section 408.162. TEX. LAB.
CODE ANN. § 403.006(b)(1)-(4) (West Supp. 2014). Section 408.162 provides that:
(a) If a subsequent compensable injury, with the effects of a previous injury, results
in a condition for which the injured employee is entitled to lifetime income benefits,
the insurance carrier is liable for the payment of benefits for the subsequent injury
only to the extent that the subsequent injury would have entitled the employee to
benefits had the previous injury not existed.
(b) The subsequent injury fund shall compensate the employee for the remainder of
the lifetime income benefits to which the employee is entitled.
Id. § 408.162(a), (b) (West 2006).
Although Section 408.162(b) provides that the Fund is responsible for compensating the
employee for the remainder of LIBs not owed by the insurance carrier, the statute does not specify
the manner in which such payment is to be made. The Administrative Code, however, is more
illustrative. Section 131.3 provides that when an insurance carrier reasonably believes that an
injured employee may be eligible for LIBs from the Fund, the insurance carrier shall petition the
commission for payment of LIBs from the Fund. 28 TEX. ADMIN. CODE § 131.3(a) (2014) (Tex.
Dep’t of Ins., Div. of Workers’ Comp.) (Lifetime Income Benefits). No other rules in the
Administrative Code speak to payment of LIBs. De Los Santos does not provide any authority
indicating that the trial court has the authority to order the Fund to pay LIBs. Thus, it appears that
payment of LIBs will not be made by the Fund absent a proper request. We therefore agree with
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the Division that the trial court cannot order the Fund to pay LIBs directly to De Los Santos absent
proper presentment. See Adcock, 412 S.W.3d at 493 (court is precluded from applying claims and
procedures not contained within the Workers’ Compensation Act). Accordingly, we hold that the
trial court erred in ordering the Fund to pay LIBs. The Division’s first issue is sustained.
SUFFICIENCY OF THE EVIDENCE
The Division next argues that the evidence is legally and factually insufficient to support
the trial court’s determination that De Los Santos is entitled to LIBs because the medical testimony
was conclusory and failed to establish that De Los Santos’s compensable injuries caused him to
lose the use of both of his hands.
Standard of Review
When the trial court is the trier of fact, a legal sufficiency challenge to the trial court’s
findings of fact is reviewed under the same standard that is applied in reviewing evidence
supporting a jury’s answer. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). A legal
sufficiency challenge may only be sustained when: (1) the record discloses a complete absence of
evidence of a vital fact; (2) the court is barred by rules of law or rules of evidence from giving
weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital
fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a
vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998). We review
the evidence in the light most favorable to the verdict, crediting favorable evidence if a reasonable
fact-finder could, and disregarding contrary evidence unless a reasonable fact-finder could not.
City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005).
In reviewing a factual sufficiency challenge, we examine all the evidence to determine if
the evidence supporting the finding is so weak or the evidence to the contrary is so overwhelming
that the judgment should be set aside and a new trial ordered. Cain v. Bain, 709 S.W.2d 175, 176
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(Tex. 1986). We will reverse only if the finding is so against the great weight and preponderance
of the evidence as to be manifestly unjust. Id. at 176.
The Division’s decision on issues involving compensability of the injury and eligibility for
and the amount of income and death benefits is reviewed by the district court under a modified de
novo review. Tex. Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 515 (Tex. 1995). Under
the “modified de novo” standard, the parties try, before the trial court, only those issues finally
decided by the Division’s Appeals Panel. TEX. LAB. CODE ANN. § 410.304(b) (West 2006); Tex.
Prop. & Cas. Guar. Ass’n v. Nat’l Am. Ins. Co., 208 S.W.3d 523, 530 (Tex. App.—Austin 2006,
pet. denied). The appealing party bears the burden of proof by a preponderance of the evidence.
TEX. LAB. CODE ANN. § 410.303 (West 2006). When a court is the trier of fact, it is to consider
the decision of the Division’s Appeals Panel. Id. § 410.304(b) (West 2006). However, the court
is not required to accord the Division’s decision any particular weight. Id. § 410.304(b) (West
2006). In addition, the opinion of the designated doctor regarding impairment is accorded no
special weight. Garcia, 893 S.W.2d at 515.
Lifetime Income Benefits
“Lifetime income is the greatest income benefit a worker can receive under the Workers’
Compensation Act.” Ins. Co. of State of Pennsylvania v. Muro, 347 S.W.3d 268, 271 (Tex. 2011);
TEX. LAB. CODE ANN. § 408.161 (West 2006). As the name implies, these benefits are payable
until the injured employee’s death. TEX. LAB. CODE ANN. § 408.161(a). Pursuant to Section
408.161 of the Labor Code, a person is eligible for lifetime income benefits if he sustains loss of
use of both hands at or above the wrist. TEX. LAB. CODE ANN. § 408.161(a)(3); Region XIX Serv.
Ctr. v. Banda, 343 S.W.3d 480, 485 (Tex. App.—El Paso 2011, pet. denied). Under the statute,
“the total and permanent loss of use of a body part is the loss of that body part.” TEX. LAB. CODE
ANN. § 408.161(b). “Total loss of use of a member of the body exists whenever by reason of injury
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such member no longer possesses any substantial utility as a member of the body or the condition
of the injured member is such that the worker cannot get and keep employment requiring the use
of such member.” Galindo v. Old Republic Ins. Co., 146 S.W.3d 755, 759 (Tex. App.—El Paso
2004, pet. denied); Navarette v. Temple Indep. Sch. Dist., 706 S.W.2d 308, 310 (Tex. 1986). The
loss of use must also be permanent for a claimant to qualify for LIBs. Galindo, 146 S.W.3d at
759.
Analysis
At the bench trial, the trial court considered De Los Santos’s medical records as well as the
testimony of De Los Santos and Dr. Kennedy. Dr. Kennedy is a board certified orthopedic surgeon
who twice examined De Los Santos and reviewed his extensive medical records. Dr. Kennedy
testified that the hallmark of CRPS is excessive pain and hypersensitivity. Upon examining De
Los Santos, Dr. Kennedy noticed signs of visible pain and observed that De Los Santos has
difficulty grasping things because he cannot close his hands all the way down. According to Dr.
Kennedy, “there is no question in my mind that [De Los Santos] has CRPS.”
Dr. Kennedy stated that he is a proponent of getting people back to work because work is
good for them, both psychologically and physically. Dr. Kennedy noted that De Los Santos is a
high school graduate who attempted to retrain in accounting after sustaining his injuries, but his
hands gave him so much trouble that he had to discontinue writing and data entry and was not able
to maintain employment in the field. Although many sufferers of CRPS improve over time, Dr.
Kennedy noted that De Los Santos’s function level deteriorated significantly from 2001 to 2012.
Dr. Kennedy testified that De Los Santos performs minimal activity around his house, including
very light house work, such as washing dishes and occasionally emptying the garbage. He has to
hire someone to mow the grass. In Dr. Kennedy’s opinion, De Los Santos, due to an injury to both
hands that happened at different times, totally lost the use of both of his hands, such that he cannot
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get and keep employment requiring the use of his hands. Dr. Kennedy verified that De Los Santos
cannot even perform light duty sedentary work because of the damage to his hands.
The Division argues that Dr. Kennedy’s testimony is (1) conclusory and fails to establish
the requisite causation, and (2) cannot support a finding that De Los Santos’s hands no longer
possess any substantial utility. First, Dr. Kennedy did not, as the Division contends, focus solely
on whether De Los Santos could work as a heavy equipment operator or perform manual labor.
Rather, Dr. Kennedy acknowledged that De Los Santos retrained in data entry and attempted to
work in that field but was unable to do so due to trouble with his hands. In addition, Dr. Kennedy
established a causal connection between De Los Santos’s initial injuries and his subsequent
conditions, i.e., CRPS I. See City of Laredo v. Garza, 293 S.W.3d 625, 632 (Tex. App.—San
Antonio 2009, no pet.) (expert testimony is required to support a diagnosis of CRPS I). Dr.
Kennedy explained that the 1994 compensable injury caused De Los Santos to lose the use of his
hands such that he could no longer perform work requiring the use of his hands. Because there
was no evidence that De Los Santos suffered from another condition or sustained a subsequent
injury that could be attributable to his CRPS, there was no need for Dr. Kennedy to rule out other
plausible causes of De Los Santos’s CRPS. Thus, the medical testimony presented at trial was
sufficient to meet the applicable causation standard. See Transcontinental Ins. Co. v. Crump, 330
S.W.3d 211, 227 (Tex. 2011) (compensable injury must be substantial factor in bringing about the
subsequent condition in question).
Second, we cannot agree that the fact that De Los Santos is able to perform certain tasks,
such as carrying groceries and opening doors, undermines the trial court’s finding that De Los
Santos’s hands lack substantial utility. In El Paso Ind. Sch. Dist. v. Pabon, 214 S.W.3d 37, 41-42
(Tex. App.—El Paso 2006, no pet.), evidence was presented that the workers’ compensation
claimant was able to perform the duties of a paraprofessional position, which required the use of
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her hands, including grasping and fine manipulation. 2 Nonetheless, the court of appeals held that
such evidence did not necessitate a finding that the claimant’s hands had some substantial utility,
as would preclude an award of lifetime income benefits for loss of both hands at or above the wrist,
because other evidence demonstrated that the claimant could not grasp objects, had constant pain
in her hands, and could not perform housework or other ordinary tasks. Id. at 42. Likewise, in
this case, there was testimony that De Los Santos suffers from CRPS, the hallmark of which is
excessive pain and hypersensitivity. He has difficulty grasping things, which precludes him from
working in manual labor. In addition, he is unable to perform sedentary work, such as data entry,
due to persistent pain in both hands. Accordingly, we conclude that a preponderance of the
evidence supports the trial court’s finding that De Los Santos’s hands lacked substantial utility
such that he is unable to procure and retain employment requiring their use. See Travelers Inc. Co
v. Seabolt, 361 S.W.2d 204, 206 (Tex. 1962) (“Although a member may possess some utility as a
part of the body, if its condition be such as to prevent the workman from procuring and retaining
employment requiring the use of the injured member, it may be said that a total loss of the use of
a member has taken place.”).
Based on the evidence presented at trial, considering the evidence and inferences
supporting the trial court’s finding, and disregarding all evidence and inferences to the contrary,
we conclude more than a scintilla of evidence exists to support the trial court’s finding that De Los
Santos was entitled to LIBs. See Dallas Nat’l Ins. Co. v. De La Cruz, 412 S.W.3d 36, 43 (Tex.
App.—El Paso 2013, pet. abated). The Division’s legal sufficiency challenge is therefore
overruled.
2
The claimant did not qualify for the position, however, due to her inability to pass a written test. Id. at 41.
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Likewise, a review of all of the evidence presented demonstrates that while there are some
contradictory statements in the exhibits that support and challenge the extent of De Los Santos’s
injuries, the verdict is not so against the great weight of the evidence as to be clearly wrong and
unjust. Accordingly, the Division’s factual sufficiency complaint is overruled.
CONCLUSION
We modify the trial court’s judgment to delete the language ordering the Subsequent Injury
Fund to pay LIBs; specifically, paragraphs 12(d) and (e) of the judgment are modified to read as
follows:
(d) Roel De Los Santos is entitled to LIBs from August 26, 1994 through the
present and continuing into the future in accordance with Texas law;
(e) Roel De Los Santos is entitled to LIBs accrued in the past along with the
annual 3% increase pursuant to Texas Labor Code § 408.161(c), offset by any
income benefits already paid to Roel De Los Santos by defendant Texas Mutual
Insurance Company[.]
As modified, the judgment of the trial court is affirmed.
Rebeca C. Martinez, Justice
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