- Bookmark
- Share
- CaseIQ
MASSEY v. ARMCO STEEL CO
Factual and Procedural Background
Leroy Massey, an employee of Armco Steel Company, was awarded total and permanent workers' compensation benefits by the Texas Industrial Accident Board for an injury sustained during employment. American General Fire and Casualty Company appealed the award to the district court. Massey filed an answer and counterclaim against American General, its employee James Sansing, Armco Steel, and its agent Ray Lambright. His counterclaim included three causes of action: recovery under the workers' compensation insurance policy, and claims against Armco, Lambright, and Sansing for conspiracy to interfere with the settlement of his compensation claim, breach of the duty of good faith and fair dealing under the insurance contract, and intentional infliction of emotional distress.
Armco moved to dismiss Massey's counterclaim on the basis that the workers' compensation award was his exclusive remedy under Texas law. The trial court granted summary judgment in favor of Armco, reasoning that the compensation award barred Massey's tort claims. The court of appeals affirmed this summary judgment, with one dissenting judge. The Texas Supreme Court granted review to determine whether Massey's intentional tort claims were independent of his workers' compensation claim and thus not barred.
Legal Issues Presented
- Whether an employee's counterclaim for an intentional tort against his employer states a cause of action independent of his workers' compensation claim.
- Whether the workers' compensation award constitutes the employee's exclusive remedy, barring recovery for intentional torts related to the injury.
- Whether Massey's pleadings sufficiently allege an intentional tort that is separable and distinct from the workers' compensation claim.
- Whether a summary judgment is appropriate when the pleadings may fail to state a cause of action without first allowing amendment after special exceptions.
Arguments of the Parties
Petitioner's Arguments
- Massey contends that his counterclaim for intentional torts, including civil conspiracy and intentional infliction of emotional distress, is independent of the workers' compensation claim and thus not barred by the exclusivity provision of the Workers' Compensation Act.
- He argues that the alleged tortious conduct occurred after the injury and involves intentional acts by Armco and its agents interfering with the settlement process.
- Massey asserts that he did not waive his right to pursue these claims by seeking workers' compensation benefits.
Respondents' Arguments
- Armco and its agents argue that Massey's claims are barred by section 3, article 8306 of the Texas Revised Civil Statutes Annotated, which makes the workers' compensation award the employee's exclusive remedy.
- They maintain that Massey's counterclaim fails to state a cause of action for civil conspiracy or any intentional tort independent of the compensation claim.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Reed Tool Co. v. Copelin, 610 S.W.2d 736, 739 (Tex. 1980) | Employers are not exempt from common law liability for intentional torts despite the Workers' Compensation Act barring negligence claims. | Supported the principle that intentional tort claims may be pursued separately from workers' compensation claims. |
| Middleton v. Texas Power Light Co., 108 Tex. 96, 185 S.W. 556, 560 (1916) | Recognition that intentional tort claims against employers are not barred by the Workers' Compensation Act. | Reinforced the distinction between negligence claims barred and intentional tort claims allowed. |
| Grove Manufacturing Co. v. Cardinal Construction Co., 534 S.W.2d 153, 155 (Tex.Civ.App. 1976, writ ref'd n.r.e.) | An employee may waive intentional tort claims by electing to pursue workers' compensation benefits. | Clarified the election of remedies doctrine relevant to the case. |
| Jones v. Jeffreys, 244 S.W.2d 924, 926 (Tex.Civ.App. 1951, writ ref'd) | Similar principle on waiver of intentional tort claims upon seeking compensation benefits. | Supported the legal framework regarding election of remedies. |
| Porter v. Downing, 578 S.W.2d 460, 461 (Tex.Civ.App. 1979, writ ref'd n.r.e.) | Collection of workers' compensation benefits estops an employee from recovering damages outside the Act for the same injury. | Applied to assess whether Massey was barred from proceeding with tort claims. |
| Great National Life Insurance Co. v. Chapa, 377 S.W.2d 632, 635 (Tex. 1964) | Definition and essential elements of actionable civil conspiracy. | Used to evaluate Massey's allegations of conspiracy and whether they met legal standards. |
| State v. Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 559 (1937) | Legal elements required to establish civil conspiracy. | Further supported analysis of conspiracy claim deficiencies. |
| Texas Department of Corrections v. Herring, 513 S.W.2d 6, 10 (Tex. 1974) | Summary judgment should not be used to dismiss claims for failure to state a cause of action without allowing amendment after special exceptions. | Formed the basis for reversing summary judgment and remanding for further proceedings. |
Court's Reasoning and Analysis
The court recognized that while the Workers' Compensation Act bars negligence claims against employers, it does not shield employers from intentional tort liability. However, when an employee seeks workers' compensation benefits, he may waive his right to pursue intentional tort claims related to the same injury under an election of remedies doctrine.
The court examined Massey's pleadings to determine if his intentional tort claims were independent and separable from the workers' compensation claim. Massey alleged a civil conspiracy involving Armco and others to interfere with the settlement process and to breach the duty of good faith, resulting in emotional distress. The court found that Massey failed to allege an unlawful overt act required to establish civil conspiracy, as the rejection of settlement proposals and appeal of the Board's award are not unlawful acts.
Despite these deficiencies, the court held that summary judgment was improper because dismissal for failure to state a cause of action requires an opportunity to amend after special exceptions have been sustained. Therefore, the court reversed the summary judgment and remanded the case for further proceedings consistent with this standard.
Holding and Implications
The Supreme Court of Texas REVERSED the summary judgment granted in favor of Armco Steel Company and remanded the case to the trial court for further proceedings.
The direct effect is that Massey’s claims for intentional torts were not conclusively barred at the summary judgment stage, and he must be afforded an opportunity to amend his pleadings if necessary. The court did not establish new precedent on the merits of the intentional tort claims but clarified procedural protections regarding summary judgment dismissals for failure to state a cause of action.
POPE, Chief Justice.
This is a workers' compensation case in which we must determine whether an employee's counterclaim against his employer for an intentional tort stated a cause of action that was independent of his claim for which the Industrial Accident Board awarded benefits. The court of appeals, with one judge dissenting, affirmed a summary judgment against the employee on the grounds that the workers' compensation award was his exclusive remedy. 635 S.W.2d 596. We reverse the judgment and remand the cause to the trial court.
The Texas Industrial Accident Board awarded Leroy Massey total and permanent compensation for an injury he received while working for Armco Steel Company. American General Fire and Casualty Company elected to appeal the award to the district court. Massey answered and filed a counterclaim alleging three causes of action against American General and its employee, James Sansing, and Armco and its agent, Ray Lambright. In his first cause of action, Massey asserted his right to recover against American General under the workers' compensation insurance policy. In his second and third causes of action, Massey joined Armco, Lambright and Sansing claiming that they conspired to interfere with the settlement of his compensation claim. Massey alleged a breach of the duty of good faith and fair dealing owed under the contract of insurance and sought damages for the intentional infliction of emotional distress.
Armco's special exception to Massey's counterclaim and his motion for summary judgment urged that Massey's cause of action against Armco was barred by section 3, article 8306, of the Texas Revised Civil Statutes Annotated. The trial court did not rule on the special exception, but granted a summary judgment grounded upon the recited reason that an award for compensation was Massey's exclusive remedy. We are not here concerned with the merits of Massey's claim for compensation, that having been severed into a separate cause. Massey urges that his action against Armco and Lambright was for an intentional tort which he did not waive by pursuing his rights to compensation. He says that the tort arose after the injury.
Although the Workers' Compensation Act bars an employee's common law action for negligence against his employer, the Act does not exempt employers from common law liability for intentional torts. Reed Tool Co. v. Copelin, 610 S.W.2d 736, 739 (Tex. 1980); Middleton v. Texas Power Light Co., 108 Tex. 96, 185 S.W. 556, 560 (1916). An employee, however, may waive his cause of action for intentional tort if he seeks benefits under the Act. Grove Manufacturing Co. v. Cardinal Construction Co., 534 S.W.2d 153, 155 (Tex.Civ.App. — Houston [14th Dist.] 1976, writ ref'd n.r.e.); Jones v. Jeffreys, 244 S.W.2d 924, 926 (Tex.Civ.App. — Dallas 1951, writ ref'd). The collection of workers' compensation benefits by an employee who subsequently alleges his injury was by intentional tort constitutes an election of remedies and estops the employee from proceeding to recover damages outside the Act. Porter v. Downing, 578 S.W.2d 460, 461 (Tex.Civ.App. — Texarkana 1979, writ ref'd n.r.e.).
We agree with Massey's general premise that an employee may have one claim against his employer under the Workers' Compensation Act and a claim at common law for intentional tort. Since such claims are mutually exclusive, however, the employer's intentional act must be separable from the compensation claim and must produce an independent injury. We must, therefore, examine Massey's pleadings and determine whether he has alleged an intentional tort against Armco and Lambright that is independent of the original claim for which the Board awarded benefits.
Massey urges that Armco and Lambright engaged in a civil conspiracy by interfering with the settlement process of his claim and that they knew he was entitled to the full benefits awarded by the Board, but hoped his deteriorating physical, emotional and mental condition would force him to settle his claim for less than the amount awarded by the Board. He alleges that Armco and American General combined to breach the duty of good faith and fair dealing owed Massey under the contract of insurance, resulting in the intentional infliction of emotional distress.
Massey has failed to state a cause of action against his employer for civil conspiracy as contended. An actionable civil conspiracy is a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. Great National Life Insurance Co. v. Chapa, 377 S.W.2d 632, 635 (Tex. 1964); State v. Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 559 (1937). The essential elements are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. 15A C.J.S. Conspiracy § 1(2) (1967). Massey alleges that Armco and American General agreed to resist his claim of total and permanent disability and thereby deprive him of his rightful benefits. The mere agreement to resist a claim, however, is not an actionable civil conspiracy. For liability to attach, there must be an unlawful, overt act in furtherance of the conspiracy. The only overt acts alleged by Massey are the veto of his proposed settlements and the appeal from the award of the Industrial Accident Board. Since the rejection of settlement proposals is not an unlawful act, Massey has not stated a cause of action for civil conspiracy.
The court of appeals, however, erred in affirming the summary judgment of the trial court. The issue whether pleadings fail to state a cause of action may not be resolved by summary judgment. In Texas Department of Corrections v. Herring, 513 S.W.2d 6, 10 (Tex. 1974), we wrote:
[O]nly after a party has been given an opportunity to amend after special exceptions have been sustained may the case be dismissed for failure to state a cause of action . . . . This court believes that the protective features of special exception procedure should not be circumvented by a motion for summary judgment on the pleadings where plaintiff's pleadings . . . fail to state a cause of action.
The judgment of the courts below is reversed and the cause is remanded to the trial court for further proceedings.
Alert