Dorsett Brothers Concrete Supply v. Travelers Indemnity Co.
Filing
9
OPINION AND ORDER granting 8 Motion for Summary Judgment. (Signed by Judge Melinda Harmon) Parties notified. (rhawkins, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DORSETT BROTHERS CONCRETE
SUPPLY, INC.,
Plaintiff,
VS.
TRAVELERS INDEMNITY CO.,
Defendants.
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CIVIL ACTION H-10-5098
OPINION AND ORDER
Pending before the Court in the above referenced cause,
alleging that Defendant Travelers Indemnity Co. (“Travelers”)
breached a contract between itself and Plaintiff Dorsett Brothers
Concrete Supply, Inc. (“Dorsett”) by failing to timely contest the
compensability of a claim filed by Dorsett employee Jose Jimenez
(“Jimenez”)under a workers compensation insurance policy issued by
Travelers, is Travelers’ motion for summary judgment (instrument
#8) on the grounds that any act or omission by Travelers was not
the cause of damages to Dorsett.
Dorsett has failed to file a
response.
Standard of Review
Summary judgment is proper when “the pleadings, the discovery
and disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.”
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Fed. R. Civ.
P. 56(c). The movant has the burden to demonstrate that no genuine
issue of material fact exists and that it is entitled to judgment
as a matter of law.
Celotex Corp. v. Catrett, 317, 323 (1986).
The substantive law governing the claims identifies the essential
elements and thus indicates which facts are material.
Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Where the non-movant bears the burden of proof at trial, the
movant need only point to the absence of evidence to support an
essential element of the non-movant’s case; the movant does not
have to support its motion with evidence negating the non-movant’s
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
case.
1994).
If the movant succeeds, the non-movant must come forward with
evidence such that a reasonable jury could return a verdict for the
nonmoving party.”
248.
Anderson v. Liberty Lobby, Inc., 477 U.S. at
The non-movant “must come forward with ‘specific facts
showing there is a genuine issue for trial.’” Matsushita Elec. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
“A factual
dispute is deemed ‘genuine’ if a reasonable juror could return a
verdict for the nonmovant, and a fact is considered ‘material’ if
it might affect the outcome of the litigation under the governing
substantive law.”
Cross v. Cummins Engine Co., 993 F.2d 112, 114
(5th Cir. 1993).
Summary judgment is proper if the non-movant
“fails to make a showing sufficient to establish the existence of
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an element essential to that party’s case.”
Celotex Corp., 477
U.S. at 322-23; Piazza’s Seafood World, LLC v. Odom, 448 F.3d 744,
752 (5th Cir. 2006).
Although the court draws all reasonable inferences in favor of
the non-movant, the non-movant “cannot defeat summary judgment with
conclusory, unsubstantiated assertions, or ‘only a scintilla of
evidence.’” Turner v. Baylor Richardson Med. Center, 476 F.3d 337,
343
(5th
Cir.
2007).
Conjecture,
conclusory
allegations,
unsubstantiated assertions and speculation are not adequate to
satisfy the nonmovant’s burden.
Little v. Liquid Air Corp., 37
F.3d 1069, 1079 (5th Cir. 1994); Ramsey v. Henderson, 286 F.3d 264,
269 (5th Cir. 2002).
evidence.
Nor are pleadings competent summary judgment
Little, 37 F.3d at 1075; Wallace v. Texas Tech. U., 80
F.3d 1042, 1045 (5th Cir. 1996); Adams Family Trust v. John Hancock
Life Ins. Co., 424 Fed. App’x 377, 81 & n.11 (5th Cir. May 11,
2011). A district court may not make credibility determinations or
weigh evidence when deciding a summary judgment motion.
Chevron
Phillips, 570 F.3d 606, 612 n.3 (5th Cir. 2009), citing EEOC v. R.J.
Gallagher Co., 181 F.3d 645, 652 (5th Cir. 1999).
Nor does the
court have to sift through the record in search of evidence to
support opposition to summary judgment.
Ragas v. Tennessee Gas
Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
A motion for summary judgment cannot be granted merely because
no opposition has been filed, even though a failure to respond
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violates a local rule.
Hibernia National Bank v. Administracion
Central Sociedad Anonima, 776 F.2d 1277, 1279 (5th Cir. 1985),
citing John v. State of La. (Bd. of Trustees for State Colleges &
Universities), 757 F.2d 698, 709 (5th Cir. 1985).
“The movant has
the burden of establishing the absence of a genuine issue of
material fact and, unless he has done so, the court may not grant
the motion regardless of whether any response was filed.
Id.,
citing id. at 708. A decision to grant summary judgment based only
on default is reversible error.
Id.
Background
Travelers issued an insurance program to Dorsett for the
period from August 1, 2007 to August 1, 2008. The program included
a Workers Compensation Policy (No. TC2KUB-750G8713-07) that covered
claims for employee injury arising out of work-related events.
Relating to the insurance program, Travelers and Dorsett entered
into an agreement, according to which Travelers would provide
certain insurance coverage and services for the policies issued in
exchange for Dorsett’s payment of premiums and reimbursement of
charges incurred and payments made on its behalf.
#8, Ex. A-1.
Under the agreement, workers compensation losses were subject to a
deductible of $250,000 per claim and Dorsett was required to
reimburse Travelers for expenses and loss payment up to that amount
for each claim.
Dorsett’s First Amended Petition (#1-4) asserts that on August
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24, 2007 Jimenez allegedly injured his back while on the job.
Dorsett claims there was no contemporaneous report of a workrelated injury and that Jimenez had had a pre-existing, non-workrelated injury at the time. Jimenez made a claim under the policy,
and served Travelers with a copy of the demand and claim, but
Dorsett
contended
challenged
the
that
amount
the
of
injury
damages
was
not
claimed.
Travelers of its objections to Jimenez’s claim.
work-related
Dorsett
and
informed
Travelers took no
action on the demand and claim for more than sixty days.
A Hearing Officer for the Texas Department of Insurance,
Division of Workers Compensation, and the appeals panel reviewed
the matter and concluded that Travelers had waived its right to
dispute the injury and the claim of injury by failing to act within
sixty days of receiving notice of the demand and claim, and they
awarded Jimenez compensation and payment on his claim, which would
continue as long as Jimenez has health care expenses related to the
injury that was the basis for the award.
Dorsett sued Travelers for breach of contract for its failure
to timely dispute Jimenez’s injury and claim of injury, which
purportedly caused actual damages to Dorsett.
Traveler’s Motion for Summary Judgment (#8)
Although Dorsett insists there was no obligation under the
agreement to object to the workers compensations claim filed by
Jimenez, it maintains that the Court need not reach this issue
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because the evidence establishes as a matter of law that any act or
omission by Travelers was not the cause of damages to Dorsett.
To prevail on a breach of contract claim a plaintiff must show
(1) a valid, enforceable contract, (2) privity of contract with the
defendant, (3) performance, tendered performance or valid excuse
from
performance
of
plaintiff’s
breach, and (5) resulting injury.
contractual
obligations,
(4)
Tejas Casing Ltd. v. IPSCO
Tubulars Inc., Civ. A. No. H-08-527, 2011 WL 832481, *3 (S.D. Tex.
Mar. 2, 2011), citing Wincheck v. American Express Travel Related
Services, 232 S.W. 3d 197, 202 (Tex. App.--Houston [1st Dist.] 2007,
no pet.).
element.
Travelers insists that Dorsett cannot satisfy the last
Dorsett seeks to recover as its total damages the amount
that it has reimbursed Travelers for indemnity, medical and expense
payments for Jimenez‘s injury of August 23, 2007.
Travelers argues that these damages did not result from the
manner in which the claim was untimely handled by Travelers.
Rather the Decision and Order issued on June 3, 2008 (#8-5)
determined the result of this dispute after a hearing on the merits
of the dispute.
Claimant Jimenez and Supervisor Omar Garza
testified on the record before the Hearing Officer at the Contested
Case Hearing, and the Hearing Officer found their testimony was
credible.
Id. at p. 2, ¶ 2; Transcript of Hearing, Ex. #8-3.
That testimony, not the date on which Travelers filed a contest,
was the reason that Jimenez was awarded workers compensation
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benefits.
Benefits were awarded because the administrative body
charged with determining compensability found that Jimenez suffered
a
compensable
injury
and
therefore
the
indemnification
which
Dorsett had paid to Travelers was not caused partly or entirely by
Travelers’ conduct.
Dorsett cannot prove causation.
A review of the record shows that even if Travelers had timely
filed its contest of compensability, the Hearing Officer would not
have determined that the injury was not compensable.
Claimant and
Travelers were both represented by able and experienced counsel,
all material witnesses1 to the compensability and thirty-day notice
defenses testified live at the hearing and were fully examined and
cross-examined subject to penalties of perjury, the Hearing Officer
questioned the witnesses repeatedly and evaluated their demeanor
and credibility. The Hearing Officer’s Decision and Order disposed
entirely of Dorsett’s argument here.
Despite the fact that she
found that Travelers waived the right to contest compensability
under Texas Labor Code § 409.021 and waived the 30-day notice
defense under Texas Labor Code § 409.022, her Decision and Order
clearly states in relevant part,
Even if the carrier had not waived the defense, the
claimant’s testimony, along with that of the plant
supervisor, Omar Garza, was sufficient to establish that
the claimant notified someone in a supervisory capacity
within thirty days of the date of injury. The claimant
1
Claimant Jimenez, Dorsett Supervisor Omar Garza, Dorsett
Assistant Safety Director Robert Blanco, and Dorsett Safety
Director Mike Nail.
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testified that he reported the injury to Mr. Garza the
day it happened. Mr. Garza indicated that it may have
been a day or two later, he wasn’t sure. However, he was
positive that the claimant did report it to him shortly
after it happened.
Moreover res judicata bars re-litigation of any claim that has
already been adjudicated or that arises out of the same subject
matter that could have been litigated in a prior action. To invoke
res judicata a party must demonstrate (1) a valid, prior final
judgment on the merits by a court of competent jurisdiction, (2)
the claim involves the same parties or those in privity with them,
and (3) the second claim is based on the same claims or causes of
action as the first, including claims that could have and should
have been raised in the first proceeding.
Igal v. Brightstar Inf.
Tech. Grp., 250 S.W. 3d 78, 86 (Tex. 2008)(applying res judicata to
a Texas Workforce Commission ruling).
Igal adopted the test of
United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422
(1966), to determine when res judicata bars relitigation of a
determination by an administrative agency.
Id.
A valid prior
final judgment exists when (1) an administrative agency is acting
in judicial capacity, (2) the agency resolves disputed issues of
fact properly before it, and (3) the parties have an adequate
opportunity to litigate the matter.
Id. at 86-87.
Here the
Hearing Officer was acting in her judicial capacity, she heard and
resolved disputed issues including injury, course and scope, and
compensability, and each party had a full and fair opportunity to
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litigate its claims through an adversarial process over which the
Hearing Officer fairly presided, so res judicata should apply to
her decision and bar Dorsett from relitigating the matter.
Court’s Decision
After carefully reviewing the record and the applicable law,
the Court concludes that Travelers has shown as a matter of law
that it is entitled to summary judgment.
Accordingly the Court
ORDERS that Travelers’ motion for summary judgment is GRANTED.
SIGNED at Houston, Texas, this
5th
day of
September , 2012.
___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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