Without express statutory provision, the Texas Office of Risk Management is off the hook for fees

A state agency's liability under the Texas Labor Code is limited to those damages authorized by the Texas Tort Claims Act.

Case name: State Office of Risk Management v. Davis, No. 08-08-00307-CV (Tex. Ct. App. 05/19/10).

Ruling: The Texas Court of Appeals found that a lower court erred by ordering the State Office of Risk Management to pay an employee's attorney's fees. It deleted the attorney's fees award but upheld the lower court's judgment in all other respects.

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What it means: A state agency's liability under the Texas Labor Code is limited to those damages authorized by the Texas Tort Claims Act. Because the Tort Claims Act does not expressly provide for the recovery of attorney's fees, the SORM cannot be ordered to pay them.

Summary: The claimant was injured while working as a nurse at the El Paso State Center. She was awarded supplemental income benefits from the State Office of Risk Management for 13 consecutive quarters, but her entitlement to further benefits was in dispute. After an appeals panel upheld the denial of benefits, the claimant appealed, and a jury verdict was entered in her favor. She was awarded the requested supplemental income benefits as well as attorney's fees. The Court of Appeals upheld the benefits award but determined that the award of attorney's fees was erroneous because Texas law does not expressly provide for such fees.

The court explained that attorney's fees aren't recoverable in Texas unless provided for by statute or by contract between the parties. As an "insurer" under the Labor Code, the SORM could be liable for reasonable and necessary attorney's fees incurred by the employee as a result of the insurer's dispute. However, the statute also states that a state agency's liability is limited to those damages authorized by the Texas Tort Claims Act, which does not expressly provide for the recovery of attorney's fees.

Concluding, "We do not believe that the legislature has expressly waived SORM's sovereign immunity for attorney's fees under the Labor Code," the court deleted the attorney's fees portion of the judgment.

Read more at the WorkersComp Forum homepage.

August 2, 2010

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