                                                                                 ACCEPTED
                                                                            03-14-00012-CV
                                                                                   3703647
                                                                  THIRD COURT OF APPEALS
                                                                             AUSTIN, TEXAS
                                                                        1/8/2015 4:20:48 PM
                                                                          JEFFREY D. KYLE
                                                                                     CLERK
                        NO. 03-14-00012-CV

                                                     FILED IN
                                              3rd COURT OF APPEALS
               IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
                        AUSTIN, TEXAS         1/8/2015 4:20:48 PM
____________________________________________________________
                                                JEFFREY D. KYLE
                                                      Clerk

              STATE OFFICE OF RISK MANAGEMENT
                           Appellant

                                  v.

                       KATINA A. EDWARDS
                            Appellee


                        On Appeal from the
             rd
          53 Judicial District Court of Travis County, Texas


                   APPELLANT’S REPLY BRIEF



                                       J. Red Tripp
                                       State Bar No. 00790257
                                       Assistant General Counsel
                                       State Office of Risk Management
                                       P.O. Box 13777
                                       Austin, Texas 78711-3777
                                       (512) 936-1516
                                       Fax (512) 370-9189
                                       Red.Tripp@sorm.state.tx.us
                                       Counsel for Appellant



                  ORAL ARGUMENT REQUESTED


                                  1
                         TABLE OF CONTENTS

                                                                  Page


Table of Contents…………………………………………………………..…….2

Index of Authorities…………………………………………………………..…..3

Reply Argument………………………………………………………………..…5

 I.     The Texas Department of Insurance, Division of Workers’
        Compensation (DWC), deprived SORM of its due process
        right to a fair hearing……………………………….……………………5

 II.    Appellant raised a Substantial Evidence Due Process Issue
        in its Original Petition. Appellant withdrew only its challenge
        to the issues of compensability and indemnity in its Amended
        Petition. Accordingly, venue is mandatory in Travis County,
        Texas…………………………………………………………………..…5

        a. Substantial Evidence Issue was Raised in the Original
           Petition…………………………………………………………….....5
        b. Venue Is Mandatory in Travis County…………………………….6
        c. De Novo Review Does Not Cure the Due Process
           Violation………………………………………………………………8

 III.    Appellant Is Not Required By Any Rule or Statute to File a
         Declaratory Judgment Action Against DWC To Resolve The
         Issues In This Case…………………………………………………...9

Conclusion and Prayer…………………………………………………………11

Certificate of Service……………………………………………………………12

Certificate of Compliance………………………………………………………13




                                    2
                   INDEX OF AUTHORITIES


CASES

Ross v. Kornrumpf, 46 Texas 390, 393 (1885) ………………………………6

Morales v. Liberty Mutual Insurance Co.,
     241 S.W.3d 514, 517 (Tex. 2007)…………………………….…………7

STATUTES

Tex. Gov’t Code Subchapter G, §2001.174(2)……………………..…7, 8, 11

Tex. Gov’t Code Subchapter G, §2001.175…………………………………10

Tex. Gov’t Code Subchapter G, §2001.176………………………….…….…7

Tex. Labor Code §410.252(b)(1)……………………………………………….7

Tex. Labor Code §410.253…………………………………………………….10

Tex. Labor Code §410.255……..…………………………………5, 7, 8, 9, 10

Tex. Labor Code §410.258(b)…………………………………………………10

Tex. Labor Code §410.301…………………………………………………8, 10




                              3
                           NO. 03-14-00012-CV


               IN THE THIRD COURT OF APPEALS
                        AUSTIN, TEXAS
____________________________________________________________

                STATE OFFICE OF RISK MANAGEMENT
                             Appellant

                                     v.

                          KATINA A. EDWARDS
                               Appellee


                          On Appeal from the
               rd
            53 Judicial District Court of Travis County, Texas


                      APPELLANT’S REPLY BRIEF



TO THE HONORABLE JUSTICES OF THE TEXAS THIRD COURT OF
APPEALS:

     COMES NOW, Appellant, State Office of Risk Management and files

this its Reply Brief to Appellee, Katina A. Edwards’ Response brief, and

would show as follows:




                                     4
                              REPLY ARGUMENT


I.      THE TEXAS DEPARTMENT OF INSURANCE, DIVISION OF
        WORKERS’ COMPENSATION (DWC), DEPRIVED APPELLANT
        OF ITS DUE PROCESS RIGHT TO A FAIR HEARING

        DWC deprived Appellant of its due process right to a fair hearing by

failing to require Appellee to provide evidence-based expert medical

evidence to prove her claim of occupational disease, thereby failing to

properly place the burden of proof on Appellee. Appellee has not provided

any argument contrary to Appellant’s position.          It must, therefore, be

presumed that Appellee concurs with Appellant’s position as to this Issue.

To the extent that a reply is necessary, Appellant incorporates, in full, its

argument as set forth in its original brief on the merits.

II.     APPELLANT RAISED A SUBSTANTIAL EVIDENCE DUE
        PROCESS ISSUE IN ITS ORIGINAL PETITION. APPELLANT
        WITHDREW ONLY ITS CHALLENGE TO THE ISSUES OF
        COMPENSABILITY AND INDEMITY IN ITS AMENDED PETITION.
        ACCORDINGLY, VENUE IS MANDATORY IN TRAVIS COUNTY,
        TEXAS

      a. Substantial Evidence Issue was Raised in the Original Petition

        Appellee acknowledges that Appellant timely filed its original petition,

but argues that Appellant’s Amended Petition untimely sought judicial

review under subchapter F and Tex. Labor Code §410.255.               However,

Appellant’s Amended Petition, filed on January 28, 2010, properly removed


                                        5
only the issues of compensability and disability from its appeal without

adding any new cause of action.1 To the extent Appellee asserts that it

was improper for Appellant to amend its original petition to more specifically

describe the relief sought on its substantial evidence cause of action, this

argument has been soundly rejected by the Texas Supreme Court since

the 1800s. See Ross v. Kornrumpf, 46 Texas 390, 393 (1885) (A new

cause of action is not set up by specifying more particularly the relief

sought).

    b. Venue Is Mandatory In Travis County

       Appellee acknowledges that Appellant is not seeking a reversal of the

DWC’s decision regarding compensability and disability;2 rather, Appellant

is asking this court to remand this matter to DWC for a new hearing in order

that DWC make a determination in compliance with its statutory provisions

and authority that is properly supported by the substantial evidence. This

dispute is not over whether or not Appellee is entitled to benefits - this

dispute is over whether or not the administrative agency followed the law in


1
   In its Original Petition to the Travis County District Court, Appellant stated that
“Defendant was not held to [her] burden of proof. Plaintiff is, therefore, aggrieved by the
improper application of the burden of proof…” CR at 5-6, and requested “such other and
further relief at law or in equity to which the Court finds it may be justly entitled.” CR at
7.
2
    Appellee’s Response issue acknowledges “…the Insurance Carrier’s legal
insufficiency argument of the evidence at the administrative level does not matter as to
compensability and disability issues…” Response Brief at viii.
                                             6
coming to its decision. This Court has the authority to remand specifically

for these reasons, but only under Tex. Gov’t Code §2001.174(2), after

which the DWC has the authority to either issue a new decision based

upon the existing record or reopen the record for new evidence. Thus, a

decision by this court to remand this matter to the DWC is not a de facto

reversal, nor is such a reversal sought by Appellant from the court.

     Appellee’s   proposition   that   Tex.   Labor   Code   §410.252(b)(1)

statutorily mandates venue in Fort Bend County, the county of Appellee’s

residence, regardless of whether the proper standard of review is de novo

or substantial evidence is without merit.     While Appellee contends that

venue is mandatory in her county of residence, Tex. Labor Code §410.255

provides otherwise. If a dispute does not concern compensability, income

or death benefits, the matter falls under Tex. Labor Code §410.255, which

instructs parties that judicial review is to be conducted under Subchapter G,

Chapter 2001, Government Code. Section 2001.176 of the Government

Code specifically places mandatory venue in Travis County. See Morales

v. Liberty Mutual Insurance Co., 241 S.W.3d 514, 517 (Tex. 2007).

     Appellee’s contention that “if courts allow parties to seek review in

Travis County on alleged legal errors, then almost every administrative




                                       7
hearing could be alleged to have jurisdictional grounds in Travis County,”3

is without merit. Appellant is requesting a remand back to DWC under Tex.

Gov’t Code §2001.174(2), because DWC did not properly apply the

established law and procedure in this claim. If an insurance carrier was to

file its petition in Travis County and the court determined that no legal or

procedural error occurred, then the petition would fail and the injured

worker would maintain their right to a jury trial in the county of their

residence with the burden on the insurance carrier on any remaining issues

concerning compensability, income or death benefits pursuant to Tex.

Labor Code §410.301. An insurance carrier’s appeal under Tex. Labor

Code §410.255 would fail if the DWC did not misapply the law or

procedure. Appellee’s contention that by granting Appellant’s request relief

almost every case could then be filed in Travis County would be true only if

“in almost every administrative hearing” the DWC misapplied the law or

committed another egregious legal or procedural error.        Appellee has

offered no evidence that this is the case.

     c. De Novo Review Does Not Cure the Due Process Violation

        Issues of due process, burden of proof, and evidence are not issues

of compensability, eligibility to or the amount of income or death benefits,


3
    Appellee’s Response Brief at 21.
                                       8
under Tex. Labor Code §410.255. Under Appellee’s construction of the

law, Appellant’s only remedy would be to try the issues of compensability

and disability before a jury with the burden of proof being placed upon the

Appellant, thereby allowing the a party to continue to benefit from the

DWC’s erroneous placement of the burden of proof at the administrative

level. Appellant would then have to prove that something did not happen,

which is antithetical to statute and logic. The real issue of procedural error

would never be addressed, nor corrected, contrary to Appellee’s contention

that “modified de novo review protects parties’ rights to have errors

corrected in court.”4 Accordingly, contrary to Appellee’s contentions, de

novo review does not cure the due process violation.

III.   APPELLANT IS NOT REQUIRED BY ANY RULE OR STATUTE TO
       FILE A DECLARATORY JUDGMENT ACTION AGAINST DWC TO
       RESOLVE THE ISSUES IN THIS CASE

       Appellant has never pled a declaratory judgment action in this

matter.5   While Appellee argues that Appellant could have brought a

Uniform Declaratory Judgment Act claim, Appellee offers no support for the

contention that this was required under law.



4
   Appellee’s Response Brief at 20.
5
   While Appellee appears to contend that a UDJA is the only vehicle under which
SORM can obtain relief, she never explains what justiciable controversy or legal
misinterpretation exists and how the Court’s ruling between DWC and SORM in this
case would resolve such controversy.
                                       9
      Appellee does not explain how DWC is an indispensable party to this

litigation. There is no statutory requirement that DWC be made a party

under Tex. Labor Code §401.255 or §401.301. A copy of plaintiff’s original

petition was filed with DWC simultaneously with the filing of the petition with

the court, pursuant to Tex. Labor Code §410.253 and in compliance with

Tex. Gov’t Code §2001.175. The statute provides that “The division may

intervene in a [judicial review proceeding] not later than the 30th day after

the date of receipt of the proposed judgment or settlement.” Tex. Labor

Code §410.258(b) (emphasis added). DWC was also sent a copy of the

Final Judgment. On August 13, 2013, SORM mailed DWC its proposed

judgment by certified mail, return receipt requested. The DWC admits in its

Petition in Intervention that it received the proposed order on August 14,

2013, and admits that it did not makes its request to intervene until more

than 30 days had passed.6 Though DWC did not timely intervene in this

lawsuit and thus was not a party to the lawsuit, it has now filed an amicus

brief to this Court.

      Appellee’s contention that, should this Court remand this case back

to DWC for proper application of the law, it would somehow “allow DWC to

continuously misapply and misinterpret the law without being held

6
  Texas Department of Insurance-Division of Workers’ Compensation’s Petition in
Intervention, Page 2, Section III.
                                         10
accountable…” is without merit, or explanation, and it is precisely the

consequence sought to be avoided in this matter.           Appellee does not

indicate what relief would be achieved by Appellant under a declaratory

judgment action that would not be accomplished by a remand to DWC for

rehearing and a correction of the due process violation.

                         CONCLUSION AND PRAYER

      WHEREFORE, Appellant timely requested substantial evidence

review, properly in Travis County and wherefore Appellant has shown that

its due process rights to a fair hearing were violated, Appellant requests

that this court grant its request to reverse the administrative order finding

that the Claimant sustained a compensable injury in the form of

hypersensitivity pneumonitis on June 17, 2008; and that she had disability

resulting from the compensable injury sustained on June 17, 2008, from

August 22, 2008, through May 12, 2009; specifically and only for the

purpose of remanding the case to the Texas Department of Insurance,

Division of Workers’ Compensation, for a proper application of the burden

of proof and evidence as permitted under Tex. Gov’t Code §2001.174(2).




                                     11
                                         Respectfully submitted,


                                         //s// J. Red Tripp
                                         J. Red Tripp
                                         State Bar No. 00790257
                                         Associate General Counsel
                                         State Office of Risk Management
                                         P.O. Box 13777
                                         Austin, Texas 78711-3777
                                         (512) 936-1516
                                         (512) 370-9189 fax
                                         Red.Tripp@sorm.state.tx.us
                                         Counsel for Appellant




                       CERTIFICATE OF SERVICE

     I hereby certify that a true and correct copy of Appellant’s Reply Brief

was served on Appellee via electronic service pursuant to the TRAP on the

8th day of January, 2015.

Bradley Dean McClellan
State Bar No. 13395980
Of Counsel, Law Offices of Richard Pena
1701 Director’s Blvd., Suite 110
Austin, Texas 78744
(512) 327-6884 office
(512) 694-8843 cell
(512) 327-8354 fax
brad.mcclellan@yahoo.com

                                         //s// J. Red Tripp
                                         J. Red Tripp



                                    12
                    CERTIFICATE OF COMPLIANCE

      I hereby certify that per TRAP 9.4(i)(3) the Appellant’s Reply Brief
contains 2,051 words pursuant to the word count on the computer program
used to prepare the document.

                                        //s// J. Red Tripp
                                        J. Red Tripp




                                   13
