American Zurich Insurance Company v. Daniel Samudio

We deny rehearing, withdraw our previous opinion, vacate our previous judgment, and issue this opinion and judgment in their stead.

In this worker’s compensation suit, appellant, American Zurich Insurance Company, appeals a summary judgment that found in favor of appellee, Daniel

2

Samudio. In five issues on appeal, Zurich argues that (1) the trial court failed to

comply with the judgment and mandate of the Texas Supreme Court; (2) the trial

court’s judgment is inconsistent with and beyond the scope to give full effect to the

Texas Supreme Court’s judgment and mandate; (3) the trial court erred in

implicitly finding that there had been a substantial change of condition or in

placing the burden of proof on Zurich to negate the existence of a substantial

change of condition; (4) the trial court erred in implicitly finding that the remedy

of remand was not available in this case; and (5) the trial court erred in awarding

fee-shifted attorneys’ fees.

We reverse and remand.

Background

In October 2001, Samudio, an employee of HC Beck, Ltd., suffered a

compensable injury when he fell from a ladder. He had four surgeries, including a

spinal fusion and a laminectomy. Samudio made a worker’s compensation claim

for impairment benefits, and the Texas Department of Insurance Division of

Workers’ Compensation (“Division”) appointed Dr. Machado as the designated

doctor who would evaluate Samudio and assign an impairment rating that would

determine the length and amount of impairment benefits paid. In a letter dated

May 11, 2004, Dr. Machado reported to the Division that Samudio had an

impairment rating of 20% based on the Guides to the Evaluation of Permanent

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Impairment, published by the American Medical Association (“Guides”). Dr.

Machado’s letter included a report, which stated, “According to the TWCC

Advisory 2003-10, a multilevel fusion meets the criteria for [diagnosis-related

estimate (DRE)] Category IV of the lumbar spine. I am therefore awarding him a

20% whole person impairment.”

After Zurich’s expert, Dr. Obermiller, disputed Dr. Machado’s impairment

rating,1 the Division asked Dr. Machado for clarification on “segmental instability”

and whether Samudio needed to be re-examined. In response, Dr. Machado

referenced the Division’s Advisories 2003-10 and 2003-10b in that they “both state

that when examining an injured worker who has had spinal surgery, the rating is to

be determined by preoperative x-ray tests for motion segment integrity. If those xrays

are not available, the type of surgery can be used to rate the individual.2 In

this case, the preoperative films do not appear to be motion studies; therefore, I

believe I was correct in using the type of surgery to determine the impairment

rating.”

1 Dr. Obermiller wrote that Dr. Machado’s 20% impairment rating was “not in

accordance with the [Guides].” He also pointed out that Dr. Machado’s report

noted Samudio had a “30% compression of the superior end plate,” and for this to

be a DRE IV, Samudio would have had to have a “greater than 50% compression

fracture.”

2 Samudio did not have preoperative x-ray tests for motion segment integrity.

4

Samudio and Zurich proceeded to a benefit review conference but were

unable to resolve the impairment rating, among other issues. The parties then

proceeded to a contested case hearing before the Division on October 19, 2005. In

its Decision and Order, the Hearing Officer stated that Dr. Machado, “initially

certified that Claimant was at maximum medical improvement (MMI) on October

21, 2003 with 20% impairment pursuant to the [Guides].” The Hearing Officer

clarified that “Dr. Machado placed Claimant in DRE Category IV for multilevel

fusion pursuant to TWCC Advisory 2003-10 and 2003-10b.” The Hearing Officer

further stated, “[Dr. Machado] explained in a December 27, 2004 letter that there

were no pre-operative x-rays for motion segment integrity and he noted that a

March 20, 2002 x-ray showed a 50% compression deformity of the L-1 vertebral

body and 30% compression deformity of the L-2. Dr. Machado declined to change

the impairment rating in response to letters of clarification.” The Hearing Officer

concluded that Samudio had a 20% impairment rating.

Zurich appealed the Hearing Officer’s decision to the Division’s appeals

panel and was notified in February 2006 that the Hearing Officer’s decision was

final. In March 2006, Zurich filed suit for judicial review of the Division’s

decision to the trial court. Zurich argued that Dr. Machado’s 20% impairment

rating was invalid because it was derived from the Division’s Advisories 2003-10

and 2003-10b and not the Guides. Zurich further argued that the proceedings

5

should be abated until the Austin Court of Appeals issued an opinion in Texas

Department of Insurance Workers Compensation Division v. Lumbermens Mutual

Casualty Company, that the 20% impairment rating should be set aside, and that

Samudio’s impairment rating should be 10%.

After the Austin Court of Appeals issued the opinion in Lumbermens, which

held that the Advisories were inconsistent with the Guides and thus invalid,3

Samudio sought dismissal in the trial court of Zurich’s suit based on lack of

jurisdiction. Samudio argued that “Zurich’s claims raised no justiciable

controversy because (i) the Texas Labor Code required a court to adopt one of the

impairment ratings that the parties had presented to the Division and (ii) the only

rating that any party had ever presented to the Division was Dr. Machado’s

impairment rating.” The trial court granted Samudio’s motion to dismiss for want

of jurisdiction and granted attorneys’ fees to Samudio pursuant to section 408.221

of the Labor Code.4

Zurich appealed the trial court’s order granting Samudio’s plea to the

jurisdiction. This Court affirmed, holding that because Zurich requested relief that

the trial court had no jurisdiction to grant, such as allowing “the fact finder to craft

3 Texas Dep’t of Ins. Workers Comp. Div. v. Lumbermens Mut. Cas. Co., 212

S.W.3d 870, 875–76 (Tex. App.—Austin 2006, pet. denied).

4 TEX. LAB. CODE ANN. § 408.221(c) (West 2015).

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a new impairment rating,” and that the trial court did not have jurisdiction to

remand the case to the Division, the trial court properly granted Samudio’s plea to

the jurisdiction. See American Zurich Ins. Co. v. Samudio, 317 S.W.3d 336, 348–

49 (Tex. App.—Houston [1st Dist.] 2010, pet. granted), rev’d, American Zurich

Ins. Co. v. Samudio, 370 S.W.3d 363, 368 (Tex. 2012).

The Texas Supreme Court disagreed, holding that section 410.3015 is not a

jurisdictional limit and that the “trial court may remand to the Division to allow it

to determine a valid impairment rating if the court concludes that no valid

impairment rating was presented to the agency in the underlying contested case.”

American Zurich, 370 S.W.3d at 368. The supreme court stated that the trial court

is “deciding a purely legal question: whether the proffered rating was made in

accordance with statutory requirements.” Id. It concluded that, “If the trial court

determines that no rating made in conformance with the Guides was presented to

the agency, it should remand to the Division for a new impairment determination.”

Id. at 369.

After remand to the trial court, on December 12, 2013, Zurich filed an

amended traditional motion for summary judgment asserting that the evidence

presented to the Division conclusively established that Dr. Machado assigned

5 Section 410.301 provides that “Judicial review of a final decision of the appeals

panel regarding compensability or eligibility for or the amount of income or death

benefits shall be conducted as provided by this subchapter.” TEX. LAB. CODE

ANN. § 410.301(a) (West 2015).

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Samudio a 20% impairment rating based on the Division’s Advisories 2003-10 and

that Dr. Machado’s impairment rating was “the only basis for the Hearing Officer’s

decision and order finding that Mr. Samudio had a 20% impairment rating.”

Zurich explained that Lumbermens held that Advisories 2003-10 and 2003-10b

were invalid, and therefore, “Dr. Machado incorrectly calculated the defendant’s

impairment rating because he relied on an invalid and illegal Division advisory.”

See 212 S.W.3d at 875–76 (holding that Advisories were invalid from issuance).

Zurich asserted that remand was the appropriate remedy so that “Mr. Samudio

[would] receive a valid impairment rating calculated under the appropriate version

of the Guides.”

On January 9, 2014, Samudio’s counsel filed a suggestion of death, stating

that Samudio died on or about August 7, 2013, and noted that “Defendant believes

that the proper Defendant is now the Estate of Daniel Samudio.”6 In response,

Zurich filed an amended petition naming Keith Morris, administrator of the Estate

of Daniel Samudio, deceased, as defendant. On May 7, 2014, Keith Morris, as

Administrator of the Estate of Daniel Samudio, Deceased, filed his original

answer.

6 Although the defendant-appellee is now the Estate of Samudio, we will refer to

Samudio for consistency.

8

On May 22, 2014, Samudio filed an amended traditional and no-evidence

motion for summary judgment, contending that the evidence demonstrated that

“Samudio had a compression fracture greater than 50%, which entitled him to a

20% impairment rating under the AMA Guides.”7 Samudio reached this

conclusion by relying on an affidavit from Dr. Jose Rodriguez, who had treated

and performed multiple surgeries on Samudio. Samudio asserted that “Because it

is . . . Zurich’s burden to establish Mr. Samudio’s condition and impairment rating,

and they cannot, Mr. Samudio is entitled to summary judgment.”

Zurich responded to Samudio’s amended motion for summary judgment,

stating that “[n]either party contends in their cross-motions for summary judgment

that Dr. Machado’s certification of MMI and impairment rating is valid.” Zurich

further argued that Dr. Rodriguez’s evidence of impairment was invalid and

inadmissible because it was not presented to the Division.

Without stating its reasons, the trial court granted Samudio’s amended

motion for summary judgment. After a hearing on whether Samudio was entitled

to attorneys’ fees, the trial court signed a final judgment on February 27, 2015,

awarding attorneys’ fees through trial and conditional appellate attorneys’ fees.

7 Pursuant to the Guides, a claimant could reach DRE IV for the lumbosacral spine

by either loss of motion segment integrity or a structural inclusion. Lumbermens

Mut. Cas., 212 S.W.3d at 872–73. One of the structural inclusions for DRE IV

category for the lumbosacral spine is (1) greater than 50% compression of one

vertebral body without residual neurologic compromise. Id. at 873.

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Zurich filed a “Motion to Modify the Judgment, Enter an Alternative Judgment, or

for New Trial,” arguing that the trial court exceeded the scope of the Supreme

Court’s order on remand by “refusing to conclude that no impairment rating made

in conformance with the AMA Guides was presented to the agency” and that the

trial court erred in “awarding fee-shifted attorney’s fees because the fees reflected

in this court’s order are not supported by factually sufficient evidence.” The

appellate record does not contain an order on Zurich’s motion and thus it was

overruled by operation of law. See TEX. R. CIV. P. 329b(c). Zurich timely

appealed.

Standard of Review

We review de novo the trial court’s ruling on a motion for summary

judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d

844, 848 (Tex. 2009). When both sides move for summary judgment and the trial

court grants one motion and denies the other, we review the summary-judgment

evidence presented by both sides and determine all questions presented. Mann

Frankfort Stein & Lipp Advisors, 289 S.W.3d at 848; Comm’rs Court of Titus Cty.

v. Agan, 940 S.W.2d 77, 81 (Tex. 1997). In such a situation, we render the

judgment as the trial court should have rendered. Mann Frankfort Stein & Lipp

Advisors, 289 S.W.3d at 848; Agan, 940 S.W.2d at 81.

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The party moving for traditional summary judgment bears the burden of

showing that no genuine issue of material fact exists and that it is entitled to

judgment as a matter of law. TEX. R. CIV. P. 166a(c); see also Provident Life &

Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215–16 (Tex. 2003). A plaintiff

moving for summary judgment must conclusively prove all essential elements of

its claim. See Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). A

matter is conclusively established if reasonable people could not differ as to the

conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168

S.W.3d 802, 816 (Tex. 2005). If the movant meets its burden, the burden then

shifts to the nonmovant to raise a genuine issue of material fact precluding

summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.

1995). The evidence raises a genuine issue of fact if reasonable and fair-minded

jurors could differ in their conclusions in light of all of the summary-judgment

evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.

2007). A defendant moving for summary judgment must conclusively negate at

least one essential element of each of the plaintiff’s causes of action or

conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc.

v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). When a trial court’s order granting

summary judgment does not specify the grounds relied upon, the reviewing court

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must affirm summary judgment if any of the summary judgment grounds are

meritorious. See Star–Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).

Impairment Rating

In its first and second issues on appeal, Zurich argues that the trial court

failed to comply with the judgment and mandate of the Texas Supreme Court and

that its “judgment is inconsistent with and beyond the scope of that which was

necessary to give full effect to the Supreme Court’s judgment and mandate in this

case.” In essence, Zurich argues that “[t]he summary judgment evidence proved,

as a matter of law, that Dr. Machado’s impairment rating had not been made in

conformance with the Guide.”

The supreme court’s opinion gave the following guidance to the trial court

upon remand: (1) “[I]n considering whether an impairment rating submitted to the

Division is valid, a reviewing court is not making a ‘determination of impairment.’

Instead, the court is deciding a purely legal question: whether the proffered rating

was made in accordance with statutory requirements;” (2) “section 410.3[06](c)

limits the evidence that a trial court may consider in reviewing an impairment

rating assigned by the Division and precludes the court from assigning a rating that

was not presented to the agency;” and (3) “[i]f the trial court determines that no

rating made in conformance with the Guides was presented to the agency, it should

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remand to the Division for a new impairment determination.” American Zurich,

370 S.W.3d at 368–369.

Section 410.306(c) provides, “Except as provided by Section 410.307,

evidence of extent of impairment shall be limited to that presented to the division.

The court or jury, in its determination of the extent of impairment, shall adopt one

of the impairment ratings under Subchapter G, Chapter 408.” TEX. LAB. CODE

ANN. 410.306(c) (West 2015). Section 408.124(b) requires that “the division shall

use [the Guides].” TEX. LAB. CODE ANN. § 408.124(b) (West 2015). Here, it is

undisputed that the only doctor who gave an impairment rating to the Division was

Dr. Machado.8 Dr. Machado initially stated to the Division that Samudio had a

20% impairment rating in accordance with the Guides. After the Division asked

for clarification, Dr. Machado stated that he used Advisories 2003-10 and 2003-

10b in determining the impairment rating. Specifically, Dr. Machado wrote,

TWCC Advisory 2003-10 and Advisory 2003-10b both state that

when examining an injured worker who has had spinal surgery, the

rating is to be determined by preoperative x-ray tests for motion

segment integrity. If those x-rays are not available, the type of

surgery can be used to rate the individual. In this case, the preoperative

films do not appear to be motion studies; therefore, I believe

I was correct in using the type of surgery to determine the impairment

rating.

8 Samudio’s brief asserts that, in its motion to dismiss for lack of jurisdiction, one of

its arguments was that “the only rating that any party had ever presented to the

[Division] was Dr. Machado’s impairment rating.” Samudio further states, “the

only impairment rating in evidence at the contested case hearing was Dr.

Machado’s 20% impairment rating.”

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In its Decision and Order, the Hearing Officer likewise stated that Dr.

Machado “initially certified that Claimant was at maximum medical improvement

. . . with 20% impairment pursuant to [the Guides]. . . . Dr. Machado placed

Claimant in DRE Category IV for multilevel fusion pursuant to TWCC Advisory

2003-10 and 2003-10b.” Samudio even admits in its brief that Dr. Machado had

improperly relied on the Advisories. We agree. Because Dr. Machado based

Samudio’s impairment rating on the Advisories, the rating did not comply with

statutory requirements, and therefore, is invalid. See American Zurich, 370 S.W.3d

at 368; Lumbermens, 212 S.W.3d at 875–76 (holding that Advisories were

inconsistent with Guides and thus invalid); DeLeon v. Royal Indem. Co., 396

S.W.3d 527, 528 (Tex. 2012) (affirming court of appeals opinion that claimant had

no valid impairment rating based on the Guides); Bell v. Zurich Am. Ins. Co., 311

S.W.3d 507, 509–10 (Tex. App.—Dallas 2009, pet. denied) (holding that

examining doctor may not base impairment rating on Advisories); TEX. LAB. CODE

ANN. §§ 408.124(b) (impairment rating must comply with Guides), 410.306(c)

(stating that court shall adopt impairment rating under Subchapter G, Chapter 408).

Acknowledging that Dr. Machado based Samudio’s impairment rating on

the Advisories, Samudio argued in its summary judgment motion and on appeal

that Dr. Rodriguez, a surgeon who performed Samudio’s spinal fusion, provided an

affidavit confirming that Dr. Machado’s 20% impairment rating was valid. Dr.

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Rodriguez’s affidavit averred that Samudio suffered from a compression fracture

of greater than 50% and therefore would nonetheless be entitled to a 20%

impairment rating.

However, as the Texas Supreme Court emphasized, “section 410.3[06](c)

limits the evidence that the trial court may consider in reviewing an impairment

rating assigned by the Division and precludes the court from assigning a rating that

was not presented to the agency. . . .” American Zurich, 370 S.W.3d at 369; TEX.

LAB. CODE ANN. § 410.306(c) (stating that “evidence of extent of impairment shall

be limited to that presented to the division”). Here, it is undisputed that Dr.

Rodriguez’s affidavit was not presented to the Division. Because Dr. Rodriguez’s

affidavit was not presented to the Division, the trial court could not consider it.

See Bell, 311 S.W.3d at 512 (noting that doctor’s answer to deposition on written

questions that answered impairment rating based on Guides was not before the

Division); Ausaf v. Highlands Ins. Co., 2 S.W.3d 363, 367 (Tex. App.—Houston

[1st Dist.] 1999, pet. denied) (amended certification of maximum medical

improvement not admissible in district court because it was not evidence presented

to Division); Deleon v. Royal Indem. Co., 396 S.W.3d 597, 602 (Tex. App.—

Austin 2010, pet. granted) (holding that trial court erred in admitting doctor’s

deposition on written questions not presented to Division, but that error harmless

because impairment rating based on Advisories and thus invalid), rev’d on other

15

grounds, DeLeon v. Royal Indemnity Co., 396 S.W.3d 527 (Tex. 2012). Zurich

likewise relies on deposition testimony that Dr. Machado gave on September 24,

2007, which was taken after the Division’s hearing. For the same reasons, the trial

court could not consider the deposition evidence. See TEX. LAB. CODE ANN.

§ 410.306(c).

Samudio relies on Old Republic Insurance Company v. Rodriguez, 966

S.W.2d 208, 210 (Tex. App.—El Paso 1998, no pet.) to argue that section

410.306(c) does not bar Samudio from offering Dr. Rodriguez’s affidavit as

summary judgment evidence. In Old Republic, the claimant appealed the

Division’s impairment rating to the trial court, but before trial, the claimant’s

doctor died. Id. at 209. The claimant presented the testimony of Dr. Moreno, who

had not testified before the Division. Id. In determining whether the trial court

erred in allowing Dr. Moreno to testify at trial when he had not testified before the

Division, the appellate court stated that after reviewing the record, they found that

Dr. Moreno did not testify about the claimant’s extent of impairment, which is

“forbidden by [section 410.306].” Id. at 210. “Rather, Dr. Moreno explained the

procedures used during medical examinations to assess impairment ratings,

discussed the American Medical Association guidelines for impairment ratings,

and explained how the guidelines are used by doctors to arrive at the percentage

impairment ratings employed in workers’ compensation cases.” Id.

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In contrast to Old Republic, Samudio relies on Rodriguez’s affidavit and

medical report to show that Samudio had a compression fracture of greater than

50%, and thus, Dr. Machado’s 20% impairment rating is valid. This evidence that

Samudio presented at summary judgment is precisely the type of evidence that the

statute forbids, and therefore, the trial court could not consider it. See TEX. LAB.

CODE ANN. § 410.306(c).

Samudio also argues on appeal that “Dr. Ronald F[raser], in another report

presented to the Division, noted that Samudio ‘sustained a compression fracture at

L1 and L2’” and that Dr. Fraser “noted that Samudio’s fracture had rapidly

degenerated from the time of his injury and, by April 2002, was at 50% and

continuing to degenerate.” Samudio did not rely on Dr. Fraser’s report to support

his amended motion for summary judgment. A movant’s summary judgment

motion must expressly present all issues that would establish its right to summary

judgment, or these grounds cannot be assigned as error on appeal. See Greathouse

v. Alvin Indep. Sch. Dist., 17 S.W.3d 419, 426 (Tex. App.—Houston [1st Dist.]

2000, no pet.) (holding that because summary judgment cannot be affirmed on

ground not presented to trial court, appellate court would not consider issue); see

also Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993) (holding that

“summary judgment cannot be affirmed on grounds not expressly set out in the

motion or response”); TEX. R. CIV. P. 166a(c) (“Issues not expressly presented to

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the trial court by written motion, answer or other response shall not be considered

on appeal as grounds for reversal.”); McConnell v. Southside Independent School

Dist., 858 S.W.2d 337, 341 (Tex. 1993) (“In determining whether grounds are

expressly presented, reliance may not be placed on briefs or summary judgment

evidence.”).

Even if we considered Dr. Fraser’s report, we would still conclude that to the

extent the trial court relied on Dr. Fraser’s report, the trial court erred because Dr.

Fraser expressly stated that he was not providing an impairment rating. As we

have already concluded that Dr. Machado submitted an invalid rating, and all of

the parties agree that Dr. Machado was the only doctor to submit an impairment

rating, the trial court was still left with no valid rating.

Accordingly, we conclude that the trial court erred in granting summary

judgment for Samudio. We further conclude that Zurich demonstrated as a matter

of law that the Division did not enter a valid impairment rating.

We sustain Zurich’s first and second issues on appeal.

Substantial Change of Condition

In its third issue on appeal, Zurich argues that the trial court erred in

implicitly finding that a substantial change of condition occurred pursuant to Texas

Labor Code section 410.307 or in placing the burden of proof on Zurich to negate

the existence of a substantial change of condition.

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In his amended motion for summary judgment, Samudio argued that he “is

entitled to summary judgment because Zurich has no evidence to establish that Mr.

Samudio did not have a substantial change in his condition.”

In the district court, extent of impairment evidence is limited to evidence

that was presented to the Division, “[e]xcept as provided in Section 410.307.”

TEX. LAB. CODE ANN. § 410.306(c). Under section 410.307, if the court, after a

hearing, finds a substantial change of condition, then extent of impairment

evidence is not limited to that presented to the Division. See TEX. LAB. CODE ANN.

§ 410.307 (West 2015). Section 410.307 is a rule of evidence that applies to

modified de novo judicial review. See Lumbermens Mut. Cas. Co. v. Manasco,

971 S.W.2d 60, 63 (Tex. 1998) (“Under section 410.307, the evidence on judicial

review regarding the extent of impairment is not limited to that presented to the

Commission if the court, after a hearing, finds a substantial change of condition.”).

Here, the record demonstrates that neither party attempted to show that

Samudio had a substantial change of condition, nor did the trial court hold a

hearing on substantial change of condition. Thus, to the extent that the trial court

allowed the parties to present new evidence pursuant to this section, the trial court

erred. Because section 410.307 requires the trial court to hold a hearing on a

substantial change of condition and make a finding, and the record does not

19

contain evidence of either requirement being met, we conclude that the trial court

could not have granted summary judgment on this issue.

We sustain Zurich’s third issue.

Remedy of Remand

In its fourth issue on appeal, Zurich argues that the trial court erred in

implicitly finding that the remedy of remand was not available in this case. Zurich

argued that the live controversy is “whether the impairment rating adopted by the

Division in this case is correct” and that the “resolution of this controversy affects

Zurich’s substantive right to seek reimbursement from the Texas Subsequent

Injury Fund of the benefits that Zurich has paid Samudio.” See TEX. LAB. CODE

ANN. § 410.209 (West 2015).

On appeal, Samudio argues for the first time that the trial court could not

remand because Samudio had received all of his benefits. Samudio asserts that as

of June 23, 2009, he had received all of the benefits that he could have received

and Zurich could no longer get those benefits returned from him. In his amended

motion for summary judgment, Samudio relied on State Bar of Texas v. Gomez to

argue that because Dr. Machado and Samudio are both decased, a justiciable

controversy no longer exists between the parties and therefore the remedy of

remand is no longer available. 891 S.W.2d 243 (Tex. 1994). Samudio

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acknowledges that Zurich’s sole remedy is against the Texas Subsequent Injury

Fund.

Section 410.209 provides, “[t]he subsequent injury fund shall reimburse an

insurance carrier for any overpayments of benefits made under an interlocutory

order or decision if that order or decision is reversed or modified by final

arbitration, order, or decision of the commissioner or a court.” TEX. LAB. CODE

ANN. § 410.209.

At least one court of appeals has already addressed Samudio’s complaint

that a live controversy does not exist. See Lumbermens Mut. Cas. Co. v. Portillo,

13–10–00470–CV, 2001 WL 2976869, at *2 (Tex. App.—Corpus Christi July 21,

2011, no pet.) (mem. op.). In Portillo, the claimant argued in its plea to the

jurisdiction that the judgment that the insurance company sought would be

advisory because “‘it would not have a practical affect [sic] on a now existing

controversy between the parties.’” 2001 WL 2976869, at *2. In a footnote, the

Corpus Christi Court of Appeals noted that the insurance company’s pleadings did

not seek reimbursement from the claimant, but rather its sole recourse was to seek

reimbursement from the Subsequent Injury Fund. See id. 2001 WL 2976869, at *2

n.5. Disagreeing with the claimant, the court of appeals held that the judgment the

insurance company sought, a judgment reversing or modifying the Division’s

decision on the claimant’s impairment rating, “would not be merely advisory”

21

because it is a statutory prerequisite for the insurance company to seek

reimbursement for any overpayment with the Subsequent Injury Fund. Id.

We agree with the court of appeals to the extent that the insurer must be

allowed to comply with the statutory prerequisite, and we are mindful that the

Texas Supreme Court gave guidance to the trial court by stating that if the trial

court determined that the impairment rating was invalid, it would have to remand

to the Division.9 Because Zurich seeks reimbursement from the Subsequent Injury

Fund, we conclude that there is a justiciable controversy.

Samudio next argues on appeal that even if the trial court erred in finding

that Samudio had a 20% impairment rating, the error was harmless. Samudio’s

arguments are based on his belief that even if Dr. Machado’s impairment rating of

20% was invalid, the only other doctor who can give an impairment rating is Dr.

Rodriguez, who stated in an affidavit that Dr. Machado’s 20% rating was valid.

While we agree that the Worker’s Compensation Act does not address a situation

in which the designated doctor and claimant have died during the course of

appellate proceedings, we are nevertheless constrained by the Division assigning

an invalid impairment rating, and the Texas Supreme Court’s conclusion that, if no

rating was made in conformance with the Guides and presented to the agency, the

9 According to Samudio, he had received all of his benefits as of June 23, 2009.

Thus, while this proceeding was before the Texas Supreme Court, Zurich had

already paid Samudio all of the benefits to which he was entitled.

22

trial court “should remand to the Division for a new impairment determination.”

American Zurich, 370 S.W.3d at 369. Because Dr. Machado’s impairment rating

was invalid, we conclude that the trial court rendered an improper judgment. See

TEX. R. APP. P. 44.1(a)(1). To the extent that the trial court implicitly determined

that it could not remand the case, the trial court erred. See American Zurich, 370

S.W.3d at 368 (“[A] trial court may remand to the Division to allow it to determine

a valid impairment rating if the court concludes that no valid impairment rating

was presented to the agency in the underlying contested case.”).

We sustain Zurich’s fourth issue.

Attorneys’ Fees

In its fifth issue, Zurich argues that the trial court erred in awarding feeshifted

attorneys’ fees in this case. Zurich argues generally that because of the

arguments outlined in its appellate brief that “the trial court erred in concluding

that Samudio has a valid, 20 percent impairment rating,” Samudio is not a

prevailing party and Zurich is “not liable for the payment of fee-shifted attorneys’

fees.” Zurich also argues that the trial court’s fee award includes “$49,000 in feeshifted

attorneys’ fees arising out of work performed by Samudio’s attorneys in

connection with the first appeal.”

Because we have sustained Zurich’s first, second, third, and fourth issues,

we must also reverse the trial court’s award of attorney’s fees because Samudio is

23

not the prevailing party. See TEX. LAB. CODE ANN. § 408.221 (West 2015)

(insurance carrier responsible for claimant’s attorney fees if claimant prevails on

an issue on which judicial review is sought by insurance carrier).

We reverse the trial court’s order granting summary judgment to Samudio.

Because a valid impairment rating was not presented to the Division, we remand

the matter to the trial court.