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Court unable to determine if employee was recruited, hired in Texas

Posted On: Jul. 8, 2019 2:27 PM CST


A trial court did not conclusively determine whether a Florida employee injured in Louisiana had been hired and recruited in Texas, a three-judge panel of the Court of Appeals of Texas, 3rd Division in Austin unanimously held on Wednesday.

In Texas Mutual Insurance Co. v. Hofer Builders Inc., the appellate court reversed a holding that the worker may be a Texas employee for workers comp purposes.

Hofer Builders Inc., based in Saginaw, Texas, remotely hired Florida resident David Hope as a supervisor, and he began working for the company at a construction site in Louisiana, where HBI was one of the subcontractors. Hartford Underwriters Insurance Co. was the workers compensation carrier for the general contractor on the project.

On Dec. 29, 2014, Mr. Hope sustained an injury. Hofer Builders’ workers compensation policy was through Texas Mutual Insurance Co. for the state of Texas, with a limited reimbursement endorsement for Texas employees injured in other jurisdictions.

On Jan. 5, 2015, Hofer filed a report for Mr. Hope’s injury with Texas Mutual, which denied benefits based on Mr. Hope’s failure to meet the coverage requirements since he was not hired or recruited in Texas, and his employment was not principally located in the state. He then sought to cover workers compensation benefits in Louisiana, which ordered Hofer to indemnify Hartford for payments made on behalf of the general contractor of the project for Mr. Hope’s injuries.

Texas Mutual brought a declaratory judgment against Hofer, stating that it had no duty to defend, indemnify or reimburse the company for Mr. Hope’s workers comp benefits in Louisiana. Hofer counterclaimed for breach of contract and declaratory judgment. And Hartford brought causes of action against Texas Mutual for declaratory judgment, contribution and subrogation for the amount the insurer paid for Mr. Hope’s Louisiana workers' compensation benefits.

A trial court granted Hofer and Hartford’s motions for summary judgment and denied Texas Mutual’s motion. Texas Mutual appealed.

The appellate court affirmed the denial of summary judgment to Texas Mutual, but reversed the decisions in favor of Hofer and Hartford. Although Texas Mutual argued that Mr. Hope was neither hired nor recruited in Texas, and that therefore the trial court’s judgment must be reversed, the appellate court disagreed. Although Hofer, as the hiring company, was in Texas and that the company anticipated Texas work assignments for Mr. Hope, the court held it could not conclusively establish that Mr. Hope was hired or recruiting in Texas.

Although Hofer and Hartford argued that, even if the evidence did not conclusively establish that Mr. Hope was hired or recruited in Texas, that it was undisputed that Mr. Hope’s employment was principally located in Texas, the appellate court held that the companies failed to raise that specific argument in their motions for summary judgment, and therefore it could not be considered as a basis for affirming the trial court’s grant of summary judgment in their favor.

The appellate court, therefore, held that the trial court erred in granting summary judgment to Hofer and Hartford because it could not conclusively establish that Mr. Hope was hired or recruited in Texas, and reversed and remanded the case.

Attorneys for Texas Mutual and Hofer did not immediately respond to requests for comment. An attorney for Hartford declined to comment.