State News : Texas

You Can't Do That! 

Trial judge abused discretion by refusing to abate personal injury suite and consolidating it with judicial review of TDI-DWC decision

This month the 14th Court of Appeals in Houston agreed with arguments by Stone Loughlin & Swanson, LLP and other firms that Harris County District Court Judge Fredericka Phillips abused her discretion by (1) refusing to abate a personal injury action pending judicial review of a TDI-DWC decision on the worker’s employment status and (2) consolidating the two actions. 

In our law firm’s 20-year history we’ve seen some bizarre workers’ compensation claims, but this one might just take the cake. It's through-the-looking-glass procedural history began when, in September 2021, 16-year-old Romny Sanchez joined his uncle, Leonel Yanez, on a job providing remediation services to victims of Hurricane Ida in Louisiana. Both men were injured while riding as passengers in a van driven by Joe Saavedra, who fell asleep and crashed into a light pole. Saavedra was an employee of All Repair and Restoration, LLC, and Sanchez and Yanez filed a personal injury suit against All Repair in Harris County district court alleging everything but the kitchen sink -- asserting claims for negligence, vicarious liability, fraud, civil conspiracy, gross negligence, intentional infliction of emotional distress, and violations of the Fair Labor Standards Act and the Texas Payday Act. All Repair asserted the affirmative defense that Sanchez and Yanez were its employees and their exclusive remedy is workers’ compensation benefits under All Repair’s policy with National Casualty Company. 

Sanchez and Yanez disputed that they were All Repair’s employees, so National, represented by this firm, initiated dispute resolution proceedings at the TDI-DWC to determine their employment status. Even though the facts were largely the same for both men, the Division refused National’s request to hear the cases together. Instead, it insisted on conducting two separate contested case hearings by two different ALJs. And, as could be predicted, the ALJs reached different conclusions. The ALJ presiding over Yanez’ case concluded that he was All Repair’s employee, but the ALJ presiding over Sanchez’ case concluded that he was not All Repair’s employee. All Repair then filed a petition for judicial review of the decision regarding Sanchez. 

At Sanchez’ request, and over the objections of National and All Repair, Judge Phillips consolidated the two actions and denied a motion to abate the personal injury action pending resolution of the judicial review action. National and All Repair then took the extraordinary step of filing a petition for writ of mandamus with the court of appeals. 

The court of appeals found that Judge Phillips abused her discretion on both counts. It directed her to vacate her order of consolidation because, among other things, “a vast portion of the evidence to be expected in the personal injury suit is likely to be inadmissible in the judicial review suit due to the limited nature of the proceeding.” It also directed her to abate the personal injury suit pending the outcome of the petition for judicial review, citing its prior decisions in In re Tyler Asphalt & Gravel Co. and In re Luby’s Cafeterias, Inc. which hold that abatement is required under such circumstances. 

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