Accident Fund Insurance Company of America v. Oncor Electric Delivery Company LLC et al

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ACCIDENT FUND INSURANCE
COMPANY OF AMERICA,
Plaintiff,
v.
ONCOR ELECTRIC DELIVERY
COMPANY, LLC, et al.,
Defendants.
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Civil Action No. 3:25-CV-0375-X
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiff Accident Fund Insurance Company of America’s
(Accident Fund) motion for partial summary judgment and Defendants Wade
Barrow, Victor Quintanilla, and Oscar Rosales’s motion for summary judgment
(collectively, “Defendants”). (Docs. 29, 39). After careful consideration, the Court
DENIES Accident Fund’s motion for partial summary judgment and GRANTS
Defendants’ motion for summary judgment.
I. Factual Background
In 2016, Defendants Quintanilla and Rosales were working as excavators for
Alvarenga Underground Construction, LLC (Alvarenga LLC). While the men were
working in a trench, a guy wire previously installed by Oncor Electric Delivery
Company LLC (Oncor) electrocuted both men.
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Accident Fund, Alvarenga LLC’s workers’ compensation insurance carrier,
paid $69,004.48 in workers’ compensation benefits to Quintanilla and $133,845.29 to
Rosales.
In 2017, Quintanilla and Rosales filed suit against Oncor in the 160th Judicial
District of Dallas County, Texas. In 2018 Accident Fund intervened, seeking to
recover its subrogation lien for workers’ compensation benefits paid to the men. The
parties entered the following pre-trial stipulation that was later incorporated into the
judgment: “[Accident Fund] has a right of reimbursement in the foregoing respective
amounts out of any recovery by the respective Plaintiffs from Defendant in this case
pursuant to Tex. Labor Code § 417.002 as a result of this payment.”1
The jury found Oncor negligent, and apportioned responsibility of 48% to
Oncor, 49% to Alvarenga LLC, 2% to Quintanilla, and 1% to Rosales. Following an
unsuccessful appeal by Oncor, Oncor tendered funds to Quintanilla and Rosales’s
attorney, Wade Barrow, totaling $701,571.11 for Quintanilla and $1,148,128.01 for
Rosales, along with $10,610.33 for taxable costs. Barrow offered to pay Accident Fund
the subrogation lien amounts reduced by 49% for Alvarenga LLC’s negligence,
one-third for attorney’s fees, and a proportionate share of the expenses. Accident
Fund counteroffered but refused to discount for Alvarenga LLC’s negligence in its
calculation. Barrow rejected this offer, and Accident Fund filed this action asserting
claims for conversion and breach of contract.
1 Doc. 8 ¶8. (emphasis added).
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II. Legal Standard
Summary judgment is appropriate only if, viewing the evidence in the light
most favorable to the non-moving party, “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.”2 “A fact is material if it ‘might affect the outcome of the suit’” and “[a] factual
dispute is genuine ‘if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.’”3 Courts “resolve factual controversies in favor of the
nonmoving party, but only where there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts.”4
III. Analysis
Both parties move for summary judgment because no facts are in dispute.
Accident Fund’s breach and conversion claims turn on a pure question of state law:
May a workers’ compensation carrier recover beyond what is authorized by the Texas
Legislature? Here, the answer is no and Accident Fund’s claims as to all Defendants
fail.5
2 FED. R. CIV. P. 56(a).
3 Thomas v. Tregre, 913 F.3d 458, 462 (5th Cir. 2019) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)).
4 Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013) (cleaned up).
5 Defendants Wade Barrow, Victor Quintanilla, and Oscar Rosales are the moving defendants
in the motion for summary judgment. But considering Accident Fund’s theory fails as a matter of law,
it has no independent cause of action or theory against remaining Defendant Oncor Electric Delivery
Company LLC.
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Chapter 417 of the Texas Labor Code governs a workers’ compensation
carrier’s rights of subrogation and recovery from the injured worker.6 While a
carrier possesses a statutory subrogation interest, that interest is limited.7
Specifically, section 417.001(b) provides that a carrier’s subrogation interest equals
the amount benefits paid to the employee “less the amount by which the court reduces
the judgment based on the percentage of responsibility determined by the trier of
fact . . . attributable to the employer.”8 And section 417.002(a) also limits
reimbursement to the employee’s “net amount recovered.”9
As one Texas court of appeals explained,10 “Sections 417.001(b) and 417.002 do
not operate in vacuums . . . the two provisions are linked, and we must interpret them
in light of each other.”11 That court held that section 417.001(b)’s limitation—“less
the amount by which the court reduces the judgment based on the percentage of
responsibility”—applies whenever a jury allocates responsibility to the employer,
even if no formal reduction is included in the judgment.12
6 TEX. LAB. CODE §§ 417.001–003. The Court applies Texas substantive law because this action
is a suit in diversity. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
7 Id. §§ 417.001–.003.
8 Id. § 417.001(b).
9 Id. §§ 417.001(b), 417.002(a).
10 When the Texas Supreme Court has not directly spoken, the Court must “make an Erie
guess and determine, in their best judgment how the State’s highest court would resolve the issue if
presented with the same case.” Jatera Corp. v. US Bank Nat’l Ass’n, 917 F.3d 831, 835 (5th Cir. 2019)
(cleaned up). Because the Texas Supreme Court denied review of this case, this interpretation of the
statutory scheme remains persuasive authority. See New Hampshire Ins. v. Rodriguez, 569 S.W.3d
275 (Tex. App.—El Paso 2019, pet. denied).
11 New Hampshire Ins., 569 S.W.3d at 302.
12 Id. at 299–300.
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To understand the statutory framework, the Court must “consider the statute
as a whole, giving effect to each provision so that none is rendered meaningless or
mere surplusage.”13 Read in context, chapter 417 establishes a single, integrated
framework governing both the amount of recovery and the scope of any subrogation
interest ensuring that employer fault reduces not only the employee’s damages but
also the carrier’s reimbursement interest.14
Despite the statutory provision, Accident Fund argues that section 417.001(b)
does not apply because that provision was not included in the stipulation incorporated
in the state court’s final judgment. But waivers require the intentional
relinquishment of a known right, and courts generally do not infer waivers from
silence or omission.15 And the mere failure to include language addressing statutory
limitations does not constitute a waiver of those protections.16 So the scope of the
carrier’s reimbursement right is fixed by statute, not by the omission of the statute’s
reference in a pretrial agreement. The Court finds no waiver and interprets and
applies the statutory framework in full.
Thus, because section 417.001(b) limits the carrier’s subrogation interest as to
the amount a carrier may be reimbursed, the Court must calculate the size of
Accident Fund’s subrogation/reimbursement interest.
13 TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 74 (Tex. 2016); see also Thompson v.
Goetzmann, 337 F.3d 489, 501 (5th Cir. 2003).
14 TEX. LAB. CODE §§ 417.001–.003.
15 Jerrigan v. Langley, 111 S.W.3d 153, 157 (Tex. 2003).
16 Id.
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Here, the underlying jury apportioned responsibility in the Dallas County suit
as 48% to Oncor, 49% to Alvarenga LLC, 2% to Quintanilla, and 1% to Rosales. As
such, Accident Fund’s subrogation interest—and by extension its ability to receive
reimbursement—is reduced by the dollar amount the jury attributed to Alvarenga
LLC’s negligence. Because the jury found that Alvarenga LLC was responsible for
49% of the $1,600,000 in damages for Rosales (totaling $784,000) and $987,500 for
Quintanilla (totaling $483,875), the Court must offset Accident Fund’s
subrogation/reimbursement interest by that amount. But Accident Fund only paid
Quintanilla $69,004.48 and Rosales $133,845.29 in workers’ compensation benefits.
So Accident Fund is entitled to $69,004.08 it paid Rosales less the $784,000 the jury
assigned as his employer’s fault for Rosales’s injuries. That’s less than zero.
Likewise, Accident Fund is entitled to $133,845.29 it paid Quintanilla less the
$483,875 the jury assigned as his employer’s fault for Quintanilla’s injuries. That’s
less than zero. That means Accident Fund recovers nothing from Rosales and
Quintanilla.17
An interpretation that allows a carrier to recover from the gross amount of
damages without accounting for the Texas Labor Code’s reductions and assignment
of responsibility impermissibly isolates section 417.002(a) from the broader statutory
framework and expands the carrier’s rights beyond what the Legislature
authorized.18
17 New Hampshire Ins., 569 S.W.3d at 298.
18 TEX. LAB. CODE § 417.002(a).
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IV. Conclusion
For the foregoing reasons, the Court DENIES Accident Fund’s motion for
partial summary judgment (Doc. 29) and GRANTS Defendants Wade Barrow, Victor
Quintanilla, and Oscar Rosales’s motion for summary judgment (Doc. 39). The Court
will issue a separate final judgment.
IT IS SO ORDERED this 7th day of April, 2026.
___________________________________
BRANTLEY STARR
UNITED STATES DISTRICT JUDGE
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