Tyler court of appeals holds that administrative costs are not recoverable in a workers comp lien

In re Old Republic Risk Management, 2019 WL 2462486 (Tex. App.-Tyler 2019).

In this mandamus action, the appellate court considered the assertion by the workers compensation carrier that nurse case management fees and other administrative costs were recoverable for the workers comp lien. In the underlying personal injury case, the widow of a worker killed in the course and scope of his employment filed suit against third parties for an explosion at a plywood mill. Old Republic provided the workers compensation benefits for the deceased employee. Old Republic sent notice to the third parties for its lien, including figures from Paradigm, the carrier’s TPA. The widow settled with 2 of the 3 defendants, and went forward with the claims against the third defendant in federal court. Old Dominion attempted to intervene, but the federal court denied their motion.

The widow then filed suit against Old Dominion and its attorneys, alleging violations of the Insurance Code, fraud, conspiracy to assert a fraudulent lien, and other claims. Old Dominion filed a plea to the jurisdiction, arguing that all of the widow’s claims arose out of its handling of the workers comp claim, and that the Department of Workers Compensation had exclusive jurisdiction. The plea was denied, and Old Dominion filed this mandamus action.

The mandamus opinion holds that, pursuant to the Texas Labor Code, a workers comp carrier is only entitled to reimbursement for payment of benefits, which is defined as medical, income, death, or burial payments. While the court agreed that the Department of Workers Compensation had exclusive jurisdiction, and the trial court should have granted the plea to the jurisdiction, the court stated plainly that any attempt by Old Dominion to seek recovery for anything other than medical, income, death or burial payments was in violation of the Labor Code.