In dispute with its insured and another insurer, Texas Mutual has persuaded the Austin Court of Appeals to reverse a trial court order granting summary judgment to the insured and to render judgment in its favor.
Texas Mutual Insurance Company v. Hofer Builders, Inc. and Hartford Underwriters Insurance Company (No. 03-21-00086-CV) arose out of a workers’ compensation policy issued by Texas Mutual to a construction subcontractor, Hofer. Hofer does business in multiple states and has one place of business in Texas. A general contractor, for which Hartford wrote workers’ compensation insurance, hired Hofer for a job in Louisiana. Hofer recruited a resident of Florida to work on the job. The worker moved from Florida to Louisiana but was promptly injured on the Louisiana construction worksite. Hartford paid benefits under Louisiana law and then, along with Hofer, sued Texas Mutual for reimbursement under a standard form endorsement that covered Texas employees working in other states under limited conditions. The trial court granted summary judgment for Hofer and Hartford. On appeal, the Austin Court of Appeals reversed and remanded. On remand, the trial court again granted summary judgment for Hofer and Hartford. Texas Mutual appealed for a second time.
The court of appeals reversed and rendered judgment for Texas Mutual. The issue before the court was whether Hofer’s employee’s employment was principally located in Texas, in which case the policy endorsement would apply (there was no dispute that the injury would have been compensable had it occurred in Texas). Pursuant to § 406.072, Labor Code, “the principle location of a person’s employment is where: (1) the employer has a place of business at or from which the employee regularly works; or (2) the employee resides and spends a substantial part of the employee’s working time.” Since the employee never set foot in Texas, the question became whether he regularly worked “at or from” Hofer’s Texas location. In their motion for summary judgment, Hofer and Hartford argued that Texas was the principal location of employment by virtue of Hofer’s single business location in the state. Texas Mutual contended that the employee’s work occurred entirely in Louisiana and, therefore, the employee lacked significant contacts with Texas and the policy endorsement did not apply.
The court’s analysis required an interpretation of § 406.072(1), Labor Code, the “place of business [in Texas] at or from which the employee regularly worked” criterion. This involved the court in some dictionary references for the terms “business,” “place,” “at,” and “from which.” As a matter of the plain meaning of the statute, the court concluded that the employee’s employment was not principally located in Texas. The employee: (1) never came to Texas; (2) worked entirely “at” the Louisiana construction site; and (3) did not work “from” Hofer’s Texas office because he never had a physical presence there. “To hold otherwise,” the court noted, “would require us to ignore the statutory language and the intent of our workers’ compensation laws,” that is, to benefit Texas employees and relieve employers of “the burden of providing insurance to employees of other states” (citations omitted.)
The court observed further that its interpretation was consistent with other sections of the workers’ compensation law which refer to the employee’s physical location in the state. If it determined otherwise, the court would distort the meaning and purpose of the policy endorsement limiting coverage to Texas employees. “Under their proposed interpretation,” the court stated, “Texas Mutual’s policies issued to employers with offices only in Texas would cover the employers’ nationwide business. But the endorsement expressly provides that ‘[e]mployees hired or recruited by you outside Texas to work in another state are specifically excluded from the terms and provisions of this policy’ and that Texas Mutual is ‘not authorized to provide workers’ compensation insurance in any jurisdiction other than Texas.’”
This is another very strong opinion from the Austin Court of Appeals that reinforces the integrity of the workers’ compensation system. It is clear that the justices understand the statutory scheme and the public policy it embodies.
