                              NO. 07-02-0486-CV

                          IN THE COURT OF APPEALS

                   FOR THE SEVENTH DISTRICT OF TEXAS

                                 AT AMARILLO

                                   PANEL A

                             SEPTEMBER 30, 2003

                      ______________________________


                           PAUL NUNN, APPELLANT

                                       V.

                     CITY OF VERNON, TEXAS, APPELLEE


                     _________________________________

         FROM THE 46TH DISTRICT COURT OF WILBARGER COUNTY;

                 NO. 22,588; HONORABLE TOM NEELY, JUDGE

                      _______________________________



Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.


                           MEMORANDUM OPINION


      Following a summary judgment that he take nothing, appellant Paul Nunn

challenges the judgment denying his motion for summary judgment and granting the

motion for summary judgment of appellee City of Vernon Employee Benefit Trust
(Employee Benefit Trust). Presenting three issues, Nunn contends (1) the Health Plan’s

exclusion of medical care for workers’ compensation expenses applies only to injuries

which are actually covered by workers’ compensation insurance coverage; (2) the

Employee Benefit Trust failed to establish that the affirmative defense of failure to exhaust

administrative remedies barred his claim; and (3) the trial court could not have denied his

motion for summary judgment based on the defense of sovereign immunity. Based upon

the rationale expressed herein, we reverse and render in part and reverse and remand in

part.


        Nunn, a member of the Fire Department of the City of Vernon, was injured while

working at an off-duty job. Because his off-duty employer was not a subscriber under the

Workers’ Compensation Act, Nunn sought coverage for his medical expenses under the

Health Plan provided by the City of Vernon and administered by the City of Vernon

Employee Benefit Trust. After Nunn’s request for payment of the medical expenses was

denied by the plan administrator, without requesting that the plan administrator review the

initial denial and without submission of the claim to the Trustees for their determination,

Nunn filed suit seeking a declaratory judgment that his claim was covered by the Plan,

notwithstanding that his injury was sustained while working for a part-time employer.


        Both parties moved for summary judgment. By his traditional motion for partial

summary judgment, Nunn contended he was entitled to a partial summary judgment

because the Plan did not exclude coverage for benefits while injured working for a non-

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subscriber. Also, Nunn contended his suit was not barred by sovereign immunity which

had been raised by the Employee Benefit Trust by its pleading. Responding and also

moving for summary judgment, the Employee Benefit Trust presented two grounds by its

traditional motion for summary judgment being:1


      First Ground: The Plan of the Employee Benefit Trust specifically excludes
      from coverage workers’ compensation related claims; and

      Second Ground: Nunn failed to exhaust the remedies under the Plan for
      filing this cause of action leaving Nunn with no right under the Plan to bring
      this lawsuit.

After hearing both motions for summary judgment, the trial court granted the motion of

Employee Benefit Trust, denied Nunn’s motion and, without stating any reasons or

grounds, rendered judgment that Nunn have and recover nothing against Employee

Benefit Trust.


                                  Standard of Review


      In our analysis, we apply the standard of review set out in Davis v. First Indem. of

America Ins. Co., 56 S.W.3d 106, 108-09 (Tex.App.--Amarillo 2001, no pet.). Also, where

as here, both parties move for summary judgment and the trial court grants one motion and

denies the other, on appeal, we review the summary judgment evidence of both sides and

determine all questions presented and render judgment the trial court should have


      1
       By its pleading, Employee Benefit Trust alleges Nunn failed to exhaust his
administrative remedies.

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rendered. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999); see also Greg

Lair, Inc. v. Spring, 23 S.W.3d 443, 446 (Tex.App.--Amarillo 2000, pet. denied).


       Considering Nunn’s issues in logical rather than sequential order, we first consider

his second issue by which he contends Employee Benefit Trust failed to establish that the

affirmative defense of failure to exhaust administrative remedies bars his claim as a matter

of law. We agree.


       Employee Benefit Trust did not use the phrase “administrative remedies” had not

been exhausted in its motion as a ground.           It labeled the issue as exhaustion of

“administrative remedies” in its pleading and brief herein.2 Even though a comparison may

constitute a distinction without a difference, in our opinion, the cases applicable to actions

on contracts containing “conditions precedent” are more appropriate for purposes of our

analysis. In Love of God Holiness v. Union Standard, 860 S.W.2d 179, 180 (Tex.App.--

Texarkana 1993, writ denied), in a suit on an insurance contract, the court held:


       [c]onditions precedent are stipulations that call for the performance of some
       act or the occurrence of some event before an agreement is enforceable.
       Examples of conditions precedent in insurance contracts are the giving of
       notice of claim or loss, the timely filing of proof of loss, reporting the loss to
       proper authorities, filing suit within a specified time, timely forwarding suit
       papers to a liability insurer, and the like.




       2
      Appellee’s brief does not cite any cases or other authority in support of its
exhaustion of administrative remedies argument.

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      Among other provisions, Article VI of the Plan provides in part:


      [n]o action may be brought for benefits provided by this Plan or any
      amendment or modification thereof, or to enforce any right thereunder, until
      after the claim has been submitted to and determined by the Trustees. . . .
      Any legal action must commence within twelve (12) calendar months
      immediately following the date of such Trustees’ decision.


Applying the definition in Union Standard, 860 S.W.2d at 180, these contractual provisions

constitute conditions precedent.


      In State Farm General Insurance Company v. Lawlis, 773 S.W.2d 948, 949

(Tex.App.--Beaumont 1989, no writ), in granting a mandamus, the court held a condition

precedent to sustaining suit on a policy was valid; however, it also held the proper remedy

of the insurer for enforcement of the condition precedent was an abatement “rather than

bar.” Then, in Vanguard Underwriters Ins. Co. v. Smith, 999 S.W.2d 448, 450 (Tex.App.--

Amarillo 1999, no pet.), the insurance company sought an abatement of the suit until the

insured complied with the appraisal provision of the contract. Similar to the provision

noted above, paragraph 11 of that policy provided:


       Suit Against Us. No suit or action can be brought unless the policy
       provisions have been complied with. Action brought against us must be
       started within two years and one day after the cause of action accrues.


Concluding the provisions of the insurance contract were clear and unambiguous, we

conditionally granted a mandamus to compel an appraisal.


                                            5
       According to the summary judgment evidence, Nunn did not submit his claim to the

Trustees for determination before he filed his suit for declaratory judgment. Concluding

provisions of Article VI of the Plan as noted above constitute conditions precedent, Nunn’s

action was subject to abatement. However, as noted in Union Standard, Employee Benefit

Trust was not entitled to a judgment that Nunn take nothing. Accordingly, Nunn’s second

issue is sustained in part and overruled in part.


       By its first ground of its motion for summary judgment, Employee Benefit Trust

contended the Plan specifically excluded coverage for the claim because it was excluded

as a workers’ compensation related claim. In response, by his first issue, Nunn contended

the medical plan exclusion for medical care for workers’ compensation expenses applied

only to injuries which were actually covered by workers’ compensation insurance coverage

which was directed to the first ground of Employee Benefit Trust. As discussed in our

analysis of Nunn’s second issue, Article VI of the plan expressly provided no action could

be brought for benefits until “after the claim has been submitted and determined by the

Trustees.” Also, Article VII of the Plan empowers the Trust Committee to construe the

provisions of the agreement which, when exercised in good faith, is binding upon the City,

employees, and beneficiaries. Because the provisions of Article VI require submission of

the claim to the Trustees, a judgment denying the claim on its merits before a decision by

the Trustees is premature. Our disposition of issue two pretermits our consideration of

Nunn’s first and third issues.


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       Accordingly, rendering the judgment the trial court should have rendered, judgment

is hereby rendered denying the motions for summary judgment of both parties, and the

summary judgment that Nunn take and recover nothing is reversed and the cause is

remanded to the trial court for further proceedings consistent with this opinion.



                                                Don H. Reavis
                                                   Justice




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