The Texas Property and Casualty Insurance Guaranty Association, representing the impaired Reliance National Insurance Company, appealed a district court ruling favoring Doris J. Toberny regarding a decision by the Division of Workers' Compensation. The Company contested four issues: (1) the Division's calculation of Toberny's impairment rating; (2) the inclusion of her pre-existing scoliosis and degenerative disc disease as compensable injuries; (3) her entitlement to supplemental income benefits for the ninth and tenth quarters; and (4) the obligation to pay her attorney's fees. The court affirmed the lower court's judgment.
Toberny, an exhibit decorator, sustained a back injury on May 10, 2000, following an incident at work. Initial care included therapy, but after it failed, she underwent significant spinal surgery that corrected her scoliosis and resulted in partial impairment, rendering her unable to work. The Company initially accepted the claim but later disputed the nature of her injuries, asserting they were limited to a sprain or strain. In June 2002, a physician assessed her condition, concluding she had reached maximum medical improvement (MMI) and assigned a 15-percent impairment rating, which the Company contested. Another physician assigned a higher 25-percent rating, leading the Company to pay supplemental income benefits for eight quarters. Subsequently, the Company sought to dispute the relationship of her injuries to the compensable claim and requested to discontinue benefits.
On October 4, 2005, the Division rejected the Company's request for a review conference, emphasizing that injured workers are responsible for pursuing injury extent issues. A benefit-review conference was later held on March 3, 2006, but the parties did not reach an agreement, leading to a contested-case hearing on April 25, 2006. The hearing officer determined that Toberny's pre-existing scoliosis and degenerative disc disease were not aggravated by her work injury, and her surgery was solely for pre-existing conditions. The officer noted that the Company had delayed disputing Toberny's impairment rating until September 21, 2005, despite having previously filed a dispute in December 2001. The hearing officer ruled that the Company waived its right to contest the impairment rating since it did not file a dispute by March 3, 2004, as required by former rule 130.102(g). Consequently, Toberny was awarded continued supplemental income benefits for the ninth and tenth quarters. The Division accepted the hearing officer's decision as final. The Company then sought judicial review, filing a motion for summary judgment. The trial court affirmed the Division's final order, upholding that (1) the deadline in former rule 130.102(g) was valid, (2) Toberny's injury did not encompass her scoliosis and degenerative disc disease, (3) the Company waived its right to contest compensability, (4) Toberny's impairment rating was determined to be 25 percent, (5) she was entitled to supplemental income benefits for two quarters, and (6) she was awarded $19,000 in attorney's fees, with an additional $15,000 for potential appeal fees. The Company has since appealed. The review standard for this appeal is "substantial evidence," which restricts the court from re-evaluating the evidence but allows for reversal if the Division's findings violate statutory provisions, exceed authority, involve procedural errors, lack substantial evidence, or are deemed arbitrary or capricious.
The Division's order is presumed valid, placing the burden of proof on the Company to demonstrate a lack of substantial evidence supporting it, as established in *City of El Paso v. Public Util. Comm'n*. Legal conclusions from the agency are reviewed for errors of law, while findings of fact are assessed for substantial evidence. Substantial evidence does not require overwhelming proof; instead, it should be reliable enough for reasonable minds to arrive at the agency's conclusion, even if evidence leans against it, per *Heat Energy Advanced Tech. Inc. v. West Dallas Coal*. The focus is on the reasonableness of the agency's order rather than its correctness. Questions of law regarding substantial evidence receive no deference from the trial court. Claims of an agency exceeding its statutory authority are reviewed de novo, and agencies can only adopt rules consistent with their statutory authority, which can be express or implied. The evaluation of whether an agency has overstepped its rule-making powers depends on whether the rules align with the Act's overarching objectives.
The Company presents three arguments challenging Toberny's impairment rating of 25 percent: (1) the invalidity of former rule 130.102(g), arguing it imposes an unauthorized burden on workers' compensation participants; (2) the assertion that the Company did not waive its right to contest Toberny's MMI and impairment rating due to a 'pending dispute'; and (3) the claim that the evidence definitively shows the impairment rating was based on non-compensable conditions. The Company references *Fulton v. Associated Indemnity Corp.* to support its argument regarding the invalidity of rule 130.102(g), which it claims contradicts statutory provisions concerning impairment rating finality. Rule 130.102 relates to workers' eligibility for supplemental income benefits, requiring a minimum impairment rating of 15 percent post-MMI. According to former rule 130.102(g), a worker's MMI date and impairment rating become final if no dispute exists at the end of the first quarter of benefits.
The Company contends that former rule 130.102(g) is invalid as it effectively establishes a 'statute of limitations' for disputing Maximum Medical Improvement (MMI) and impairment ratings. The Company claims this rule prevents carriers from challenging these ratings after the first quarter of supplemental income benefits, thereby imposing an undue burden not envisioned by statute, similar to a previously invalidated rule in Fulton. In Fulton, the court struck down a regulation that restricted a worker's ability to contest an impairment rating beyond 90 days of its assignment, linking MMI and impairment ratings as integral, thereby limiting a worker's rights to challenge the finality of MMI.
The court referenced the Texas Supreme Court's affirmation of the Workers' Compensation Act's framework surrounding MMI, which mandates a determination within two years post-injury. During this period, a worker may receive temporary income benefits, which the court recognized as critical. The ruling in Fulton highlighted that rules cutting off these benefits prematurely could be considered arbitrary, undermining the statutory balance established in Garcia.
Key principles from Fulton include: a liberal interpretation of the Workers' Compensation Act to support worker compensation and a prohibition against agency-imposed restrictions that deviate from the Act's explicit language. Despite the Company's arguments, the court determined that former rule 130.102(g) aligns with the Act's goals by providing finality for injured workers, thereby facilitating their compensation and adhering to the Division's statutory authority.
The validity of former rule 130.102(g), now 130.102(h), is upheld in this case, as it does not conflict with the legislature’s 2003 amendment concerning the finality of impairment ratings, which applies only to ratings made after June 20, 2003. Since Toberny's maximum medical improvement (MMI) and impairment ratings were designated in 2002, the statute does not apply, and thus the rule's compatibility with it is not addressed. The Company argues it has a 'pending dispute' regarding Toberny's impairment rating, asserting that its initial dispute from July 17, 2002, remains unresolved despite a significant lapse of time and the designation of a second doctor for a new rating. The Company references various Division appeals panel decisions to support its claim, asserting that these past disputes were deemed 'pending' even after doctor evaluations. However, the court notes that the lack of affirmative evidence indicating a continuing dispute in this case distinguishes it from the cited panel decisions. Furthermore, a prior panel's ruling that the passage of time does not conclude a dispute is deemed inapplicable here, as it pertained to a worker's contest rather than the Company's situation.
The Company failed to provide evidence of a pending dispute regarding Toberny's Maximum Medical Improvement (MMI) or impairment rating between the first impairment-rating dispute in 2002 and the end of the first quarter of her supplemental income benefits over two years later. The Division's determination that no such pending dispute existed under former rule 130.102(g) was upheld. The Company argued that Toberny's impairment rating was not valid because it was based solely on non-compensable conditions, requesting a remand for a new dispute-resolution process. However, the Division's ruling that the Company waived its right to contest the rating was affirmed, as the rule was valid.
Additionally, the Company contended that the compensable injury did not encompass specific diagnosed conditions and that expert testimony was necessary to prove causation. The appeal was evaluated under the substantial-evidence standard, but this issue was rendered moot by the waiver established by former rule 130.102(g).
Regarding supplemental income benefits, which are available to injured workers with an impairment rating of 15 percent or greater, the Division's determination of a 25 percent rating for Toberny was affirmed. Consequently, the Company’s claims that Toberny was not entitled to benefits for the ninth and tenth quarters were overruled. Furthermore, Toberny was awarded attorney's fees since she prevailed in her judicial review and the subsequent appeal.
The trial court's judgment was affirmed, with all four of the Company's issues on appeal being overruled.
A worker attains maximum medical improvement when her condition stabilizes, two years post-injury regardless of stabilization, or later for those with spinal surgery if determined by the Division under labor code section 408.104. A doctor issues an impairment rating based on statutory guidelines, expressed as a percentage of whole-body impairment from a compensable injury. The Company references the Supreme Court case State Office of Risk Management v. Lawton, asserting that the carrier can contest the extent of a worker's injury without a deadline set by the labor code, which only specifies a 60-day period for contesting the compensability of the injury. The Supreme Court's ruling supports Division rules that may impose additional burdens on carriers. However, the extent of injury discussed in Lawton is not relevant to the current appeal, and it remains unclear if it allows the Company to contest future medical bills based on extent. Additionally, the Company cites labor code section 408.125(c) to argue that disputes over impairment ratings remain pending indefinitely until resolved by the Division. This section mandates that a designated doctor's findings are presumptively adopted unless evidence contradicts them. The Division found no pending dispute in this case, inferring from the Company's lack of diligence that no formal dispute existed. Lastly, the Company does not challenge the attorney's fees awarded by the trial court.
