March 2009 Cases Impacting Houston Appellate Lawyers

HBA Appellate Practice Section

April 16, 2009


SELECTED CASE SUMMARIES

March 12, 2009 – April 16, 2009


Presented by:

David J. Campbell

Briefing Attorney to the Hon. Terry Jennings

First Court of Appeals of Texas

davecampbell@alumni.utexas.net

SUPREME COURT OF TEXAS

Entergy Gulf States, Inc. v. Summers, No. 05-0272 (Apr. 3, 2009) (Justice Green).

Significance: This case allows premises owners to avail themselves of the exclusive remedy defense when they provide workers’ compensation benefits to subcontractors’ employees.

Holding: Entergy, as a premises owner, fits the statutory description of a “general contractor,” making Entergy an “employer” for purposes of the Workers’ Compensation Act. As a statutory employer, Entergy is entitled to assert the exclusive remedy defense.

Relevant Facts: John Summers, an IMC employee, was injured while working at Entergy’s Sabine Station plant. Summers applied for, and received, benefits under the workers’ compensation policy purchased by Entergy. He then sued Entergy. Entergy moved for summary judgment, arguing that it is immune from Summers’s common-law tort suit because it is his statutory employer. See Tex. Lab. Code § 408.001(a) (describing exclusive remedy defense available to statutory employers). Entergy argued that it qualifies as Summers’s statutory employer, and may therefore assert an exclusive remedy defense against Summers, because Entergy (1) provided workers’ compensation benefits to Summers (2) pursuant to a contract with IMC in which Entergy agreed to provide workers’ compensation coverage to IMC employees, and (3) Entergy is both a premises owner and general contractor. See id. §§ 406.121(1) (defining “general contractor” as “a person who undertakes to procure the performance of work or service, either separately or through the use of subcontractors”), 406.123(a), (e) (stating that when a general contractor enters into a written agreement to provide workers’ compensation coverage to a subcontractor and its employees, the general contractor is considered a statutory employer “only for purposes of the workers’ compensation laws of this state). The trial court granted Entergy’s motion for summary judgment, and the court of appeals reversed. The supreme court reversed the court of appeals, holding the exclusive remedy defense applied. Justice Hecht filed a lengthy concurrence, opining that the statutory provisions at issue are ambiguous, but that the majority interpretation is most consistent with the Workers’ Compensation Act as a whole. Justice Willett also filed a concurrence, pointing out with particularity why, in his view, the majority’s ultimate conclusion is right, and why each of Summers’s arguments flawed. Justice O’Neill, joined by Chief Justice Jefferson and Justice Medina, dissented.


HCBeck, Ltd. v. Rice, No. 06-0418 (Apr. 3, 2009) (Justice Green).

Significance: To qualify as a statutory employer and avail itself of the exclusive remedy defense, a contractor may provide workers’ compensation insurance by agreeing in writing to buy the insurance, compensating a subcontractor for buying the insurance, or “connecting the subcontractor” to the party that is paying for the work by contractually providing for that party to buy the insurance.

Holding: HCBeck “provided” workers’ compensation insurance as required under the Texas Labor Code to benefit from the exclusive remedy defense because the insurance plan incorporated into both its upstream contract with FMR and its downstream subcontract with Haley Greer included workers’ compensation coverage to Haley Greer’s employees and because the contracts specified that HCBeck was ultimately responsible for obtaining alternate workers’ compensation insurance if FMR were to terminate coverage.

Relevant Facts: HCBeck contracted with FMR to construct an office campus on FMR’s property. Haley Greer entered into a subcontract with HCBeck to provide services on the project. Charles Rice, an employee of Haley Greer, was injured while working on the project. As part of the FMR/HCBeck contract, FMR agreed to provide workers’ compensation insurance to the employees of both HCBeck and its subcontractors. Rice applied for and received workers’ compensation benefits under the policy paid for by FMR. He then filed a negligence suit against HCBeck. HCBeck obtained summary judgment on the ground that it had provided workers’ compensation coverage to Rice by contractually obligating FMR to obtain and pay for the workers’ compensation insurance. The court of appeals reversed, holding that “HCBeck’s contract with Haley Greer—which simply incorporated FMR’s [coverage] into the subcontract under the direct order of FMR in its contract with HCBeck—is insufficient to constitute ‘providing’ providing workers’ compensation insurance to Haley Greer.” The supreme court reversed the court of appeals’s judgment and rendered judgment in favor of HCBeck. Justice Johnson dissented, arguing that he would hold that to be a statutory employer, a general contractor must be more substantively involved in securing and maintaining the subcontractor’s worker’s compensation insurance than contracting for another to place and maintain insurance.


Genn v. Forrester, No. 08-0163 (Mar. 27, 2009) (per curiam).

Significance: A restricted appeal requires error that is apparent on the face of the record; error that is merely inferred will not suffice.

Holding: A district clerk’s notation stating that nothing in the record indicates that the required notice of a dismissal for want of prosecution was sent to the plaintiff is insufficient to affirmatively demonstrate that notice was not sent, and thus insufficient to establish reversible error in a restricted appeal.

Facts: The Forresters’s lawsuit was dismissed for want of prosecution. For their subsequent restricted appeal, the Forresters requested a supplemental clerk’s record containing documents that would have showed that the trial court failed to notify the Forresters of an impending dismissal for want of prosecution. The clerk provided a supplemental record stating, “NOTE: Unable to locate other items requested.” Reasoning that the clerk’s notation reveals that the trial court failed to notify the Forresters of its intent to dismiss the case, the court of appeals reversed the trial court’s judgment of dismissal and remanded the case for further proceedings. The supreme court reversed.


FIRST COURT OF APPEALS

Grant v. Laughlin Environmental, Inc., No. 01-07-00227-CV (Mar. 26, 2009) (Justice Jennings).

Significance: Under the unclean hands doctrine, a party that engages in unlawful or inequitable conduct, such as fraud, may not recover quantum meruit relief.

Holding: The trial court did not abuse its discretion in denying Grant a quantum meruit recovery because LEI presented ample proof that Grant had engaged in unlawful or inequitable conduct.

Facts: Grant signed a two-year compensation package agreement with LEI, but continued working for LEI after the agreement expired. During that time, Grant used LEI employees and equipment for his personal use. He also used LEI’s credit to make personal purchases. In Grant’s lawsuit against LEI, he asserted a number of claims, including a claim for quantum meruit recovery for bonus money to which he claimed he was entitled. Based on the jury finding that Grant’s conduct “constituted unclean hands,” the trial court denied the quantum meruit recovery.


Mireles v. Mireles, No. 01-08-00499-CV (Apr. 2, 2009) (Justice Jennings).

Significance: Extrinsic evidence may be used to collaterally attack a judgment when the trial court had no power to decide the case.

Holding: The trial court did not err in granting a petition to set aside a divorce on the grounds the underlying marriage was void, despite the respondents’ contention that the petitioner did not plead and prove the required facts for bill of review relief.

Facts: In 1998, Jennifer Jack married Andrew Mireles, and in 2005, they divorced. In 2007 Jennifer filed a bill of review, alleging that two years after divorcing Andrew, Jennifer “was shocked” to discover that Andrew Mireles “was born a female named Phyliss Ann Mireles.” Based on the parties’ agreement that Mireles was born a female, the trial court found that the underlying marriage was void and set aside the divorce decree. In affirming, the court of appeals noted that, while Jennifer labeled her action a “bill of review,” she “was actually attacking collaterally the divorce decree in order to have the underlying marriage declared void, rather than attempting to secure the rendition of a single, correct judgment in place of the earlier one.” Because a same-sex marriage is void in Texas, the court had no choice but to dismiss the divorce in light of the undisputed fact, established through extrinsic evidence, that this was a same-sex marriage.


FOURTEENTH COURT OF APPEALS

Afri-Carib Enterprises, Inc. v. Mabon Limited, No. 14-07-00650-CV (Mar. 31, 2009) (Justice Yates).

Significance: A party does not have constructive notice of a trial setting or default judgment when notice is sent to an attorney who is not authorized to practice law, even if the attorney was not authorized to practice law when hired.

Holding: Evidence was legally and factually sufficient to support the trial court’s finding that Mabon did not have notice of the trial setting.

Facts: Afri-Carib sued Mabon in 1996 for breach of contract. Mabon hired counsel and made an appearance. The case was called to trial nearly two years later, and neither Mabon nor its counsel appeared, so the trial court entered a default judgment against Mabon. Mabon filed a bill of review arguing that it did not receive personal notice of the trial setting or default judgment and that notice could not be imputed to Mabon based on notice its attorney received because the attorney’s license was suspended when the notices were sent. The trial court granted Mabon’s bill of review, set aside the default judgment, and granted summary judgment for Mabon in the underlying suit. The court of appeals reversed and remanded for further proceedings.