      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                      NO. 03-07-00171-CV



      Texas Department of Insurance, Division of Workers’ Compensation, Appellant

                                                 v.

               The Insurance Company of the State of Pennsylvania, Appellee


     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
     NO. D-1-GN-04-003939, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING



                                          OPINION


               The Division of Workers’ Compensation, Texas Department of Insurance, (Division)1

appeals a final summary judgment declaring that The Insurance Company of the State of

Pennsylvania (ICSP) is entitled to reimbursement from the subsequent injury fund pursuant to

section 410.209 of the labor code and ordering that reimbursement be made. See Tex. Lab. Code

Ann. § 410.209 (West 2006). In two issues, the Division asserts that the district court erred in

granting summary judgment because (1) ICSP could not obtain declaratory relief from the

district court because “the same issue involved in the declaratory judgment action” was already




       1
         The statutory responsibilities now vested in the Division were formerly vested in the
Texas Workers’ Compensation Commission. Effective September 1, 2005, the legislature abolished
the Commission and transferred its statutory responsibilities and rules to the Division. See Act of
May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 607, 608.
Relevant events in this case occurred both before and after that date. For clarity, we will use “the
Division” to refer to both the former and successor entities.
pending before another court; and (2) the judgment made the basis of ICSP’s reimbursement claim

under section 410.209 was “void” because ICSP failed to comply with labor code section 410.258

before obtaining it. See id. § 410.258 (West 2006). Additionally, the dissent sua sponte disputes

whether the district court had subject-matter jurisdiction over ICSP’s claims. We conclude that the

district court had subject-matter jurisdiction and that it did not err in granting summary judgment.

Accordingly, we will affirm the judgment.

               The underlying facts are undisputed.            ICSP, a workers’ compensation

insurance carrier, was ordered by a Division hearing officer to pay benefits to an injured worker.

ICSP began paying benefits. ICSP challenged the hearing officer’s decision in the Division’s

appeals panel, which affirmed the decision. ICSP then brought a suit for judicial review in

Dallas County district court. On November 15, 2000, the Dallas County district court rendered

final summary judgment (the 2000 judgment) reversing the appeals panel order on the ground of

no compensable injury (i.e., ICSP owed no benefits after all). The claimant did not appeal, and it

is undisputed that the 2000 judgment is final for appellate purposes.

               ICSP subsequently requested the Division to reimburse it for the benefit payments

it had made before the 2000 judgment.            Section 410.209 of the labor code entitles a

workers’ compensation carrier that has paid benefits under an “interlocutory order or decision” of

the Division to be reimbursed from the subsequent injury fund for any such payments if that order

or decision is ultimately “reversed or modified by final arbitration, order, or decision of the

commissioner or a court.” Id. § 410.209. The Division refused to reimburse ICSP. It took the

position that ICSP had not complied with section 410.258 of the labor code before obtaining the



                                                 2
2000 judgment and that this failure rendered the judgment “void” for purposes of seeking

reimbursement under section 410.209. Section 410.258 provides:


       (a)    The party who initiated a proceeding under this subchapter or Subchapter G
              [governing suits for judicial review from appeals panel decisions] must file
              any proposed judgment or settlement made by the parties to the proceeding,
              including a proposed default judgment, with the division not later than the
              30th day before the date on which the court is scheduled to enter the
              judgment or approve the settlement. The proposed judgment or settlement
              must be mailed to the division by certified mail, return receipt requested.

       (b)    The division may intervene in a proceeding under Subsection (a) not later
              than the 30th day after the date of receipt of the proposed judgment or
              settlement.

       (c)    The commissioner shall review the proposed judgment or settlement to
              determine compliance with all appropriate provisions of the law. If the
              commissioner determines that the proposal is not in compliance with the law,
              the division may intervene as a matter of right in the proceeding not later than
              the 30th day after the date of receipt of the proposed judgment or settlement.
              The court may limit the extent of the division’s intervention to providing the
              information described by Subsection (e).

       (d)    If the division does not intervene before the 31st day after the date of receipt
              of the proposed judgment or settlement, the court shall enter the judgment or
              approve the settlement if the court determines that the proposed judgment or
              settlement is in compliance with all appropriate provisions of the law.

       (e)    If the division intervenes in the proceeding, the commissioner shall inform
              the court of each reason the commissioner believes the proposed judgment
              or settlement is not in compliance with the law. The court shall give full
              consideration to the information provided by the commissioner before
              entering a judgment or approving a settlement.

       (f)    A judgment entered or settlement approved without complying with the
              requirements of this section is void.




                                                 3
Id. § 410.258. The Division maintained that section 410.258 required ICSP to send it a copy of the

proposed summary-judgment order it was seeking from the Dallas County district court at least

30 days before that court signed the order. While ICSP had provided the Division 21 days’ notice,

it had not given the agency the full 30 days’ notice the Division contended was required.

                ICSP responded to the Division’s refusal in two ways. It first filed a “Motion to Re-

Enter Judgment” in the Dallas County district court that had rendered the 2000 judgment. ICSP’s

motion, filed almost three years after the 2000 judgment, does not seek any substantive change in

the 2000 judgment but only to re-enter the same judgment at a later date. The effect of re-entering

the judgment would be to moot the Division’s complaint regarding section 410.458 because it

would be undisputed that the Division would have had more than 30 days’ notice of the proposed

new judgment. See id. § 410.258(a). This motion has remained pending.

                ICSP subsequently filed a separate suit in Travis County district court against the

Division. ICSP asserted a cause of action under the Uniform Declaratory Judgments Act2 for

a declaration enforcing what ICSP claimed were its rights to reimbursement under labor code

section 410.209. This Court has held that section 410.209 (or a predecessor) waives sovereign

immunity and creates a statutory right of reimbursement that the carrier can enforce through a

UDJA action. See Texas Workers’ Comp. Comm’n v. Continental Cas. Co., 83 S.W.3d 901, 904-05

(Tex. App.—Austin 2002, no pet.); Everest Nat’l Ins. Co. v. Texas Workers’ Comp. Comm’n,

80 S.W.3d 269, 272-75 (Tex. App.—Austin 2002, no pet.); Texas Workers’ Comp. Comm’n v. Texas

Builders Ins. Co., 994 S.W.2d 902, 905-07 (Tex. App.—Austin 1999, pet. denied). ICSP’s


       2
           See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (West 2008).

                                                  4
declaratory-judgment suit was later transferred to Travis County, and it is from those proceedings

that the present appeal arose.

                ICSP moved for summary judgment on its UDJA claim. To establish a right to

reimbursement under section 410.209, ICSP was required to prove that (1) it was required to pay

workers’ compensation benefits by an “interlocutory order or decision” of the Division; (2) it paid

benefits under the interlocutory order; (3) the order was ultimately “reversed or modified”; and (4) by

a “final . . . order or decision of . . . the commissioner or a court.” See Tex. Lab. Code Ann.

§ 410.209. In support of its summary-judgment motion, ICSP presented evidence that (1) a Division

hearing officer had ordered it to pay benefits and that the appeals panel had affirmed the order;

(2) ICSP had paid benefits pursuant to those orders; (3) ICSP had sued for judicial review of

the appeals panel decision in Dallas County district court and obtained the 2000 judgment reversing

the appeals panel order; and (4) the 2000 judgment was final for appellate purposes. Proof of the

latter element included the Division’s admissions that the 2000 judgment was a “final decision of

a court” and a “final order of a court.”

                In response, the Division did not attempt to controvert any of these elements

and, in fact, conceded that the 2000 judgment was “final and valid” with respect to ICSP’s liability

for paying workers’ compensation benefits on behalf of the claimant. Instead, as its sole ground in

opposition to summary judgment, the Division asserted that ICSP’s noncompliance with the

notice requirements of labor code section 410.258 rendered the 2000 judgment “void” under

subsection (f) of section 410.258. And section 410.209, the Division further contended, must be

construed in light of section 410.258 to preclude reliance on a “final . . . order or decision of . . . a



                                                   5
court” that is “void” under section 410.258(f) as a basis for reimbursement from the subsequent

injury fund. This is so, the Division asserted, even when the order or decision is otherwise “final

and valid” as between the workers’ compensation carrier and the injured worker. See Newsom

v. Ballinger Indep. Sch. Dist., 213 S.W.3d 375, 379 (Tex. App.—Austin 2006, no pet.) (holding

that finality of judgment for purposes of appeal was not contingent on compliance with

section 410.258, as “[a] judgment can become final even if it is void”) (citing Middleton v. Murff,

689 S.W.2d 212, 213 (Tex. 1985) (per curiam)). The Travis County district court granted

summary judgment for ICSP.

               On appeal, the Division brings forward its contentions regarding labor code

section 410.258. It also argues—for the first time—that ICSP cannot obtain the declaratory relief it

seeks in the present proceeding because “the same issue involved in the declaratory judgment action

before this Court” was already pending before the Dallas County district court when ICSP filed its

declaratory action. See Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891,

895 (Tex. 1970). It elaborates that “[t]he Dallas district court’s disposition of ICSP’s Motion to Re-

enter Judgment will decide the same issue raised in ICSP’s declaratory judgment action, namely

whether the November 15, 2000, judgment is the Dallas court’s final judgment.” Specifically, the

Division reasons, the Dallas County district court will have to determine whether it still retains

plenary power over the 2000 judgment, see Metropolitan Transit Auth. v. Jackson, 212 S.W.3d 797,

803 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (holding that non-compliance with

section 410.258 rendered prior judgment “void” such that trial court’s plenary power did not

expire), or whether, as the Division contends, the 2000 judgment was final for appellate purposes



                                                  6
(even if “void” under section 410.258) such that its plenary power has expired, see Newsom,

213 S.W.3d at 379.

                Before reaching ICSP’s appellate contentions, however, we must first address a

threshold question of subject-matter jurisdiction that the dissent has raised sua sponte. The dissent

asserts that ICSP’s declaratory-judgment action runs afoul of the concept that a trial court has no

subject-matter jurisdiction to entertain a declaratory-judgment action to “interpret a prior judgment.”

That limitation is not implicated here.

                The concept that trial courts lack subject-matter jurisdiction to entertain

declaratory actions to interpret or construe a prior judgment is based on three related and overlapping

principles. First, trial courts lack subject-matter jurisdiction over a suit to interpret a prior

final judgment because there is no justiciable controversy—the underlying controversy has

already been resolved by the final judgment. See Martin v. Dosohs I, Ltd., 2 S.W.3d 350, 353-54

(Tex. App.—San Antonio 1999, pet. denied) (holding no justiciable controversy existed when

plaintiffs sought to clarify their rights regarding easements and a well as determined by a previously

entered partition order). Second, a trial court’s subject-matter jurisdiction cannot be invoked by the

assertion of an ostensible cause of action under the UDJA to interpret a final judgment because the

Act, when authorizing courts to declare parties’ rights under statutes, ordinances, contracts, etc., did

not include “judgments” among the instruments that courts may construe. See Speaker v. Lawler,

463 S.W.2d 741, 742 (Tex. Civ. App.—Beaumont 1971, writ ref’d n.r.e.). Third, it has been held

that a declaratory-judgment action to “interpret” a prior judgment, even if not explicitly praying

for its invalidation, would amount to an impermissible “collateral attack” on the prior judgment.



                                                   7
Rapid Settlements, Ltd. v. SSC Settlements, LLC, 251 S.W.3d 129, 140-41 (Tex. App.—Tyler 2008,

no pet.); Martin, 2 S.W.3d at 353-54. The concern in the latter category of cases has been that

declaratory actions to “interpret” prior judgments, if permitted, would enable litigants to circumvent

the procedural limitations on direct and collateral attacks on judgments. See Bonham State Bank

v. Beadle, 907 S.W.2d 465, 468 (Tex. 1995); Rapid Settlements, 251 S.W.3d at 140-41; Speaker,

463 S.W.2d at 743.

               These concerns are not implicated by ICSP’s declaratory-judgment action here. The

justiciable controversy underlying the 2000 judgment in ICSP’s suit for judicial review concerned

whether ICSP was liable to pay workers’ compensation benefits on behalf of the claimant. In

contrast, the controversy underlying ICSP’s declaratory-judgment action concerns ICSP’s rights vis-

à-vis the Division under a different provision of the workers’ compensation act, section 410.209.

Although the existence, content, and finality of the 2000 judgment are among the elements that ICSP

must prove to recover under section 410.209, it remains that the justiciable controversy underlying

its declaratory-judgment claim concerns the existence of a statutory right that is distinct from the

rights and duties that were determined by the 2000 judgment. Cf. Bonham State Bank, 907 S.W.2d

at 467-69 (holding bank’s assertion of right to offset one final judgment against another presented

a justiciable controversy and court of appeals incorrectly had likened suit to suits seeking

interpretation of a prior judgment); Martin, 2 S.W.3d at 353-54. Furthermore, ICSP’s declaratory-

judgment action is not in the nature of a collateral attack on the 2000 judgment. To the contrary,




                                                  8
ICSP relies on the 2000 judgment as the basis for its claim to reimbursement under section 410.209.3

And whether ICSP is entitled to reimbursement turns on construction of statutes—i.e., the

relationship, if any, between sections 410.209 and 410.258 and whether the latter applies here—and

not construction of the 2000 judgment, per se. See Tex. Civ. Prac. & Rem. Code Ann. § 37.004

(West 2008) (“A person . . . whose rights, status, or other legal relations are affected by a

statute . . . may have determined any question of construction or validity arising under the . . . statute

. . . and obtain a declaration of rights, status, or other legal relations thereunder.”).

                ICSP’s declaratory-judgment action does not seek to impermissibly “interpret a

prior judgment,” and we hold that the Travis County district court possessed subject-matter

jurisdiction to adjudicate it. We now turn to the Division’s appellate challenges.

                Regarding the Division’s first issue, in which it contends ICSP cannot obtain

declaratory relief to enforce its rights under section 410.209 because its claim presents “the same

issues” pending in the Dallas County district court, the Division waived this ground by failing to

raise it in its response to ICSP’s motion for summary judgment. See City of Houston v. Clear Creek

Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). As for the Division’s second issue, concerning

whether ICSP can obtain reimbursement under labor code section 410.209 when it did not comply

with section 410.258, the undisputed summary-judgment evidence reflects that ICSP’s summary-

judgment motion against the injured worker was contested. Consequently, under the precedent

of this Court, ICSP was not required to comply with section 410.258 before obtaining the


        3
          Nor does the Division attempt to collaterally attack the 2000 judgment in this proceeding.
Instead, as noted, it acknowledges that the judgment is final and valid as between ICSP and the
claimant, but disputes whether the judgment can be a basis for recovery under section 410.209.

                                                    9
2000 judgment. See Texas Prop. & Cas. Ins. Guar. Ass’n for Petrosurance Cas. Co. v. Brooks,

269 S.W.3d 645, 648-51 (Tex. App.—Austin 2008, no pet.) (section 410.258 does not apply “to

judgments entered by the trial court that were not submitted or proposed to the court by agreement

of the parties or [as] the result of a default by the defendant”).

                The district court below did not err in granting summary judgment in favor of ICSP.

We affirm the judgment.




                                                __________________________________________

                                                Bob Pemberton, Justice

Before Justices Patterson, Puryear and Pemberton;
  Dissenting Opinion by Justice Puryear

Affirmed

Filed: February 12, 2010




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