Kelly v. American Interstate Insurance Co. (Tex.App.- Houston [14th Dist.] Nov. 25, 2008)(Brown)
(
venue, motion to transfer venue, MTV, exhaustion of administrative remedies, plea to the jurisdiction,
workers comp, compensable injury, benefits denial, preauthorization)
AFFIRMED: Opinion by
Justice Jeff Brown  
Before Justices Brock Yates, Guzman and Brown
14-07-00083-CV  Jimmy J. Kelly v. American Interstate Insurance Co., Hammerman & Gainer, Inc., and Sheryl
Butman--Appeal from 334th District Court of Harris County
Trial Court Judge:
Sharon McCally

M E M O R A N D U M   O P I N I O N

Jimmy J.  Kelly appeals separate trial court orders transferring venue; sustaining  appellees American Interstate
Insurance, Inc. and Sheryl Butman's plea to the jurisdiction; and granting a motion to dismiss for lack of
jurisdiction by appellee Hammerman & Gainer, Inc.  (“H&G").  On appeal, Kelly argues that the order to transfer
venue was in error because he was not given proper notice of the venue hearing as required by the Texas Rules
of Civil Procedure.  Further, Kelly asserts that the orders regarding jurisdiction were in error because he was not,
as appellees assert, required to exhaust further administrative remedies.  We affirm.

BACKGROUND

The facts in this case are generally undisputed.  On May 14, 2002, Kelly was injured during the course and
scope of his employment with Chock's, Inc., in Andrews County.  Several weeks later, appellee American
Interstate, Chock's insurer, denied the compensability of Kelly's claim.  At that time, American Interstate advised
Kelly of his right to a benefit review conference[1] if he disagreed with this assessment.  In late July, Kelly and
American Interstate - through its third-party administrator, appellee H&G, and their claims adjuster, appellee
Butman - participated in a benefit review conference, which later resulted in both parties agreeing to a benefit
dispute agreement (“BDA").  This BDA stated that Kelly had sustained a “compensable injury" to his lower back.

In December 2002, however, American Interstate filed another explanation of benefits, denying Kelly's claim for
medical expenses and also stating that Kelly had intentionally withheld information about prior injuries which may
have contributed to his condition.  Further, American Interstate asserted that Kelly's alleged need for spinal
surgery arose from his prior injuries.  A few days later, a doctor examined Kelly on American Interstate's behalf.  
Based on this examination, the doctor reported that a spinal fusion - requested by Kelly - was not recommended.

In January 2003, the parties entered into a second BDA in which American Interstate again agreed that Kelly had
suffered a compensable injury.  Further, American Interstate waived its ability to contest the compensability of
the claim.  In March, 2003, American Interstate granted Kelly preauthorization for a spinal decompression
procedure, but denied preauthorization for a spinal fusion.  

In September 2003, Kelly underwent surgery, intending to receive a spinal fusion.  However, during the
procedure, his surgeon determined that a spinal fusion was not necessary.

In December 2004, Kelly filed this suit in Andrews County alleging statutory and common-law bad faith, among
other claims, for damages caused by appellees' denial of preauthorization for the spinal fusion.  In January 2005,
American Interstate and Butman filed a motion to transfer venue, alleging proper venue in Harris County.  In
February 2005, H&G also filed a motion to transfer venue, alleging proper venue in Dallas County.  On August 8,
2005, the Andrews County district court signed an order setting the hearing on the motions for September 6,
2005C29 days later.  On August 30, Kelly filed an objection to the court's September 6 setting, citing improper
notice.  On September 6, the Andrews County district court conducted the venue hearing over Kelly's objection.  
On January 1, 2006, the district court signed an order transferring venue of the case to Harris County.

Appellees American Interstate and Butman filed a plea to the jurisdiction, alleging that the trial court did not have
subject-matter jurisdiction over the suit because Kelly had failed to exhaust all administrative remedies before the
Texas Workers' Compensation Commission (“TWCC").  Later, H&G filed a motion to dismiss on similar grounds.  
In a single order, the trial court sustained the plea of American Interstate and Butman, and granted the motion by
H&G.  This timely appeal followed.  

STANDARDS OF REVIEW

It is an abuse of discretion for the trial court to rule on a motion to transfer venue without giving the parties notice
as required by the Rules of Civil Procedure.  HCA Health Servs. of Tex., Inc. v. Salinas, 838 S.W.2d 246, 247-48
(Tex. 1992) (per curiam); Henderson v.  O'Neill, 797 S.W.2d 905, 905 (Tex.  1990) (per curiam).  A trial court
abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or
principles.  Bowie Mem'l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002) (per curiam).

A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject-matter jurisdiction.  
Harris County v.  Sykes, 136 S.W.3d 635, 638 (Tex.  2004).  Whether a court has subject-matter jurisdiction is a
question of law.  Tex. Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).  Accordingly, we
review a challenge to the trial court's subject-matter jurisdiction de novo.  Id. at 228.  When reviewing a plea to
the jurisdiction, we must look to the allegations in the pleadings, liberally construe them in the plaintiff's favor,
and look to the pleader's intent.  Id.  at 226.  In doing so, we consider the facts alleged in the petition and, to the
extent relevant to the jurisdictional issue, any evidence the parties submitted to the trial court.  See Bland Indep.
Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).  If the pleadings do not contain sufficient facts to affirmatively
demonstrate the trial court's jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the
issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend.  Miranda, 133
S.W.3d at 226-27.  If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction
may be granted without allowing the plaintiffs an opportunity to amend.  Id., 133 S.W.3d at 227.

ANALYSIS

I.                    Notice of Venue Hearing

In his first issue on appeal, Kelly argues that he was not given sufficient notice of the hearing on appellees'
separate motions to transfer venue.  Kelly asserts that the trial court's order was granted and conveyed to him
only 29 days before the scheduled date of the hearing.  As a result, he contends not only was he denied the
required 45 days' notice of the hearing, but it was impossible for him to timely file a response in opposition to
appellees' motions at least 30 days before the hearing.  See Tex. R. Civ. P. 87(1).

On appeal, Kelly does not object to the court's determination that venue was proper in Harris County; he merely
objects to the lack of notice.  For this reason, it is not necessary for this court to conduct a review of the trial
court's venue analysis.

The Texas Rules of Civil Procedure provide that, except on leave of the court, each party is entitled to at least 45
days notice of a hearing on a motion to transfer.  Id.  Appellees assert that Kelly was given more than 45 days
notice of the hearing, because he received a copy of the appellees' joint motion to set a hearing on all of their
venue motions, as well as a proposed order, on July 14, 2005.  The cover letter accompanying the motion and
proposed order provides as follows:

The Andrews County Court Coordinator has advised us that the hearing has already been placed on the Court's
September 6, 2005, docket at 10:00 a.m. and that the Motion and Order are simply a formality.

At the venue hearing, Kelly's counsel admitted to having received the letter and its contents.  Consequently,
Kelly was aware of appellees' efforts to schedule the hearing on their joint motion as of July 14Cmore than 50
days before the scheduled hearing.

To date, there does not appear to be any Texas case addressing whether receipt of an unsigned scheduling
order qualifies as sufficient notice of a venue hearing.  However, several similar cases provide sufficient authority
for this court to hold that the circumstances in this case do qualify as proper notice.

In Mansfield State Bank v. Cohn, 573 S.W.2d 181 (Tex. 1978), the Texas Supreme Court held that a letter sent
to the district court clerk, when copied to opposing counsel, was sufficient notice of a trial setting.  Id.  at 185.  In
that case, the court stated, “It is reasonable to assume that if a trial setting is requested from the district clerk, a
litigant is put on notice that trial may be on that requested date."  Id.  In the present case, appellees' letter
established that arrangements with the court coordinator had already been made - the date had been set.  The
court's act of signing the order was a mere formality.  Other courts have similarly held that the forwarding of
unsigned orders to opposing counsel provides sufficient notice of summary-judgment hearings under the Rules
of Procedure.   See Goode v.  Avis Rent-A-Car, Inc., 832 S.W.2d 202, 204 (Tex. App.- Houston [1st Dist.] 1992,
writ denied) (receipt of an unsigned order was sufficient notice to respondent of summary-judgment hearing);
Longoria v. United Blood Servs., 907 S.W.2d 605, 609-610 (Tex. App.- Corpus Christi 1995) rev'd on other
grounds, 938 S.W.2d 29 (Tex.  1997) (citing Mansfield, 573 S.W.2d at 185, and holding that letter requesting
specific date for trial or hearing, when copy sent to opposing parties, is sufficient notice of setting); West v.
Maint. Tool & Supply Co., Inc., 89 S.W.3d 96, 102-03 (Tex. App.- Corpus Christi 2002, no pet.) (agreeing with
Goode and Longoria, and citing Mansfield, 573 S.W.2d at 185).  Here, appellees' letter, accompanied by a copy
of their joint motion and the unsigned order, provided Kelly with actual notice of the hearing date, sufficient to
satisfy Rule 87.  As a result, the trial court did not abuse its discretion in overruling Kelly's objection to the venue
hearing.  See Bowie Mem'l Hosp., 79 S.W.3d at 52.

We overrule Kelly's first issue.

II.                 Exhaustion of Administrative Remedies

In his second issue, Kelly argues that the trial court erred in granting appellees' motions asserting lack of subject-
matter jurisdiction.  Kelly argues that because appellees signed three separate BDA'sCeach stipulating that
Kelly's injury was compensable - they effectively waived further administrative proceedings.

By contrast, appellees assert that the relevant agreements stating that Kelly's injuries were compensable did not
automatically entitle him to medical benefits.  Further, because an independent examination by a second doctor
found that the requested spinal fusion was unnecessary, they were within their rights to deny preauthorization for
the procedure.  Finally, appellees argue that Kelly's proper remedy would have been to appeal this dispute to
the TWCCC something that Kelly never attempted.

“[T]he Workers' Compensation Act vests the power to award compensation benefits solely in the Workers'
Compensation Commission, subject to judicial review.”  Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 803
(Tex. 2001) (quoting Saenz v. Fidelity & Guar. Ins. Underwriters, 925 S.W.2d 607, 612 (Tex.1996)).  The TWCC
has jurisdiction over disputes involving preauthorization of medical care and reimbursement of medical
expenses.  Id.  A claimant is required to exhaust all administrative remedies with the TWCC before suing an
insurer on statutory and tort claims alleging denials, delays, interruptions, and premature terminations of medical
treatment.  Pickett v. Tex. Mut. Ins. Co., 239 S.W.3d 826, 832 (Tex. App.- Austin, 2007, no pet.); see also Fodge,
63 S.W.3d at 804.  The determination of whether any type of claim is within the TWCC's exclusive jurisdiction
depends on whether the claim is based on a claimant's entitlement to benefits.  Fodge, 63 S.W.3d at 804;  
Pickett, 239 S.W.3d at 835B36.

The Texas Workers' Compensation Act (“the Act") provides a four-tier system for the disposition of claims by the
TWCC.  See In re Tex. Workers' Comp. Ins. Fund, 995 S.W.2d 335, 336 (Tex. App.- Houston [1st Dist.] 1999, no
pet.).  In the first tier, the parties participate in a “benefit review conference" conducted by a “benefit review
officer." Tex. Lab. Code Ann. §§ 410.021-.034 (Vernon 2006 & Supp. 2008).  The conference, which is a
“nonadversarial, informal dispute resolution proceeding," is designed to “mediate and resolve disputed issues by
agreement of the parties."  Id. § 410.021(3).  In the second tier, “[i]f issues remain unresolved after a benefit
review conference, the parties, by agreement, may elect to engage in arbitration," and, absent an agreement, a
party is entitled to seek relief at a contested case hearing.  Id. §§ 410.104, 410.151-.169 (Vernon 2006).  In the
third tier, a party may seek review by an administrative appeals panel.  Id. §§ 410.201-.209 (Vernon 2006).  
Finally, in the fourth tier, an aggrieved party may seek judicial review.  Id. §§410.251-.308 (Vernon 2006).

The statutory scheme specifically provides that “the division shall schedule a contested case hearing...if the
disputed issues are not resolved at the benefit review conference." Id. § 410.025.  Furthermore, A[a] dispute
may be resolved in whole or in part at a benefit review conference," and, following the conclusion of the benefit
review conference, the benefit review officer shall reduce the agreement to writing to be signed by the officer and
each party.  Id.§   410.029(a), (b).  This agreement Ais binding on the insurance carrier through the conclusion
of all matters relating to the claim, unless the division or a court, on a finding of fraud, newly discovered
evidence, or other good and sufficient cause, relieves the insurance carrier of the effect of the agreement."  Id. §
410.030(a).  “If a dispute is not entirely resolved...the benefit review officer shall prepare a written report that
details each issue that is not resolved at the conference."  Id. § 410.031(a).

Under the plain language of the Act, the TWCC, the claimant, and the insurance provider can enter into a
binding written agreement that resolves all disputed issues.  The Act does not require a claimant who has
entered into a binding written agreement to settle his benefits dispute to continue through all four tiers of the
disposition process. See Fund, 995 S.W.2d at 337.

Each of the three BDAs in this case described Kelly as having suffered a “compensable injury."  Under the Act, a
“compensable injury" is an injury that arises out of and in the course and scope of employment for which
compensation is payable under the Act.  Tex.  Lab.  Code Ann. § 401.011(10) (Vernon Supp. 2008).  
“Compensation" is the payment of a benefit.  Id.  at § 401.011(11).  A “benefit" under the Act can be a medical
benefit, an income benefit, a death benefit, or a burial benefit based on a compensable injury.  Id.  at _ 401.011
(5).  “A medical benefit" is payment for health care reasonably required by the nature of a compensable injury
and intended to:

(A) cure or relieve the effects naturally resulting from the compensable injury, including reasonable expenses
incurred by the employee for necessary treatment to cure and relieve the employee from the effects of an
occupational disease before and after the employee knew or should have known the nature of the disability and
its relationship to the employment;

(B) promote recovery; or

(C) enhance the ability of the employee to return to or retain employment.

Id.  at § 401.011(31).  

According to the record, the only disputed issues the parties' first BDA addressed were whether Kelly had
suffered a compensable injury and, if so, whether Kelly had suffered a disability as a result.  The parties
answered both questions affirmatively in the first BDA; however, they mentioned no specific medical or surgical
procedures.  Further, they expressly stated in the first BDA that the duration of Kelly's disability for the purposes
of paying benefits was not entirely settled, leaving the matter to be considered at a later date.

The second BDA, coming after American Interstate had raised concerns about whether or not Kelly's injuries had
resulted from pre-existing health conditions, addressed four issues: (1) whether good cause existed to relieve
the carrier from the effects of the first BDA; (2) whether Kelly had sustained a compensable injury; (3) whether
Kelly had been disabled by the injury, and for what period; and (4) whether the carrier had waived its right to
contest the compensability of Kelly's claim.  The second BDA stated that the first BDA remained effective, that
Kelly's injury was compensable, and had resulted in a disability from the date of injury to the present.  It also
stated that American Interstate had, in fact, waived its right to contest the compensability of Kelly's claim.  Again,
however, it discussed no specific medical treatments or procedures.

Finally, the third BDA, entered into after Kelly was later injured in an unrelated automobile accident, sought to
clarify and restrict the scope of Kelly's compensable injury to the cervical area of his spineCthe location of his
work-related injury.  Again, it mentioned no medical treatments or procedures.

On appeal, Kelly argues that because a BDA functions as a contract between the claimant and the carrier,
appellees waived any ability to deny preauthorization of spinal surgery when it agreed to the compensability of
his injury on three separate occasions.  In response, appellees argue that, as described above, compensability
merely makes a claimant eligible for many different types of benefits, possibly including medical procedures.  
Consequently, the central question in this case is whether a claimant can sue a carrier for the denial of specific
benefits, based on an agreement to provide general benefits, without first exhausting administrative remedies
through the TWCC process.

The Texas Supreme Court addressed part of this question in American Motorists Insurance Co. v. Fodge, 63 S.
W.3d 801 (Tex.  2001).  In Fodge, a claimant sought benefits from her employer's insurance carrier after
suffering a workplace injury.  The carrier denied that her injuries were work-related.  After a contested case
hearing, the carrier was ordered to pay temporary income benefits for a specified period.  Never in those
proceedings did the claimant seek medical benefits or complain that the carrier had denied benefits.  Later, the
claimant sued the carrier for denying the income benefits as well as denying payment for certain medical
treatments.  The trial court dismissed the claims for lack of jurisdiction as Fodge had not yet exhausted her
remedies with the TWCC.  On appeal, Fodge argued that because she was suing for damages resulting from the
denial or delay of benefit payments - rather than payment of the benefits themselves - her claims were properly
before the trial court, as opposed to the TWCC.  The Texas Supreme Court disagreed, saying that because her
suit involved her entitlement to workers' compensation benefits, her claims were within the exclusive jurisdiction
of the TWCC.  Id.  Further, the court held that a trial court could have jurisdiction only over final orders of the
TWCC, meaning that a court could not hear claims related to benefits which the TWCC had never ordered.  Id.  
at 803-804.  Because the TWCC had never awarded medical benefits to Fodge, she could not sue for a delay or
denial in paying them.  Id.  at 804.  

Only a handful of Texas cases since Fodge have considered subject-matter jurisdiction when a BDA is involved,
and only four appear relevant to this circumstance.  Kelly relies upon In re Texas Workers' Compensation
Insurance Fund, 995 S.W.2d 335 (Tex. App.- Houston [1st Dist.] 1999, no pet.), which involved a similar bad-faith
action by a claimant against an insurance carrier.  In Fund, the claimant and carrier entered into a BDA stating
that the claimant's health problems were causally related to his workplace injury, and that the carrier would pay
reasonable and necessary medical expenses according to the Act.  Despite this agreement, the carrier began
denying payments to the claimant.  The parties entered into another BDA wherein the carrier agreed to pay
supplemental income benefits for a specified period.  A third BDA provided supplemental income benefits for an
additional period.  The carrier failed to pay these benefits and the claimant filed suit without first seeking relief
through the TWCC.  In a mandamus review of the trial court's refusal to abate or dismiss the case, the First
Court of Appeals held that the Act gives such agreements between claimants and carriers the same “binding"
effect upon the parties as final decisions by the TWCC.  Id. at 337; see also Tex.  Labor Code Ann. _ 410.030
(a).  Further, in denying the petition for writ of mandamus, the First Court stated:

There is a strong policy behind our holding. When the parties agree that a claimant's injuries are compensable,
and such agreement is reduced to writing at a benefit review conference, the parties to that agreement ought to
be held to comply with it. In the absence of such a policy, there is no incentive or reason for parties to seek
resolution of their dispute at the benefit review conference. Id.

In Texas Mutual Insurance Co. v. Ruttiger, 265 S.W.3d 651 (Tex. App.- Houston [1st Dist.] 2008, pet. filed), a
claimant similarly filed a bad-faith action against his employer's insurance carrier.  The claimant alleged that the
carrier had denied timely payment of income benefits and necessary medical treatment without a reasonable
basis until later agreeing to do so in a BDA.  Appealing the jury's adverse verdict, the carrier argued that its
approval of the BDA was merely a “compromise" and not a determination of benefit entitlement by the TWCC.  
Consequently, the carrier argued, it could not be held liable for failure to pay benefits discussed in the BDA.  The
First Court of Appeals disagreed, echoing its holding in Fund that “the Act does not require a claimant, who has
entered into a binding written agreement to settle his benefits dispute, to continue through all four tiers of the
disposition process."  Id. at 651 (citing Fund, 995 S.W.2d at 336-37).  Once again, the First Court held that a
binding BDA constituted a “final determination of benefits" due to a claimant, consequently bestowing subject-
matter jurisdiction to a trial court in an action based on denied or delayed payment of those benefits.  See id.

In Pickett v. Texas Mutual Insurance Co., 239 S.W.3d 826 (Tex.  App.-Austin 2007, no pet.), another set of
claimants had their bad faith suit against their employers' carrier thrown out by the trial court for lack of
jurisdiction.  The carrier had paid the claimant income and disability benefits, but had denied preauthorization for
certain pain-management treatments on the basis that the symptoms were unrelated to the workplace injury.  
The claimant never submitted to the TWCC any disputes concerning denied preauthorization requests.  
Ultimately, the claimant and carrier entered into a BDA for the purpose of determining which of her symptoms
were related specifically to the workplace injury.  The BDA did not address or determine what medical treatments
were related to her compensable injuries, or what treatments were medically reasonable or necessary for those
injuries.  Later, the claimant sued the carrier for wrongfully delaying or denying preauthorization of the claimant's
pain treatments.  On appeal from the trial court's dismissal, the Austin Court of Appeals applied the Fodge
holding in determining that, because the claimant's alleged damages concerned the delay or denial of benefits,
exhaustion of the TWCC process was required.  Id. at 836.  The court went on to say that because the relevant
BDA did not determine which medical treatments were appropriate for the claimant's disordersCor address the
claimant's entitlement to medical benefits in any way - the agreement could not be read to create an entitlement
to such benefits.  Id.  at 837.  Rather, the BDA merely clarified which of the claimant's injuries were compensable
by the carrier.  Id.  Consequently, the BDA was not a final order creating an entitlement to benefits sufficient to
create subject-matter jurisdiction for a trial court without further proceedings by the TWCC.  Id.      

We believe that the case at bar is more similar in circumstance and application to Fodge and Pickett than to
Fund and Ruttinger.  As the Fodge court stated, the importance of requiring a claimant to exhaust his
administrative remedies before granting subject-matter jurisdiction to a trial court is based on the fact that  - only
the [TWCC] can determine a claimant's entitlement to compensation benefits." Fodge, 63 S.W.3d at 804.  A[J]ust
as a court cannot award compensation benefits, except on appeal from a [TWCC] ruling, neither can it award
damages for a denial in payment of compensation benefits without a determination by the [TWCC] that such
benefits were due."  Id.  In both Fodge and Pickett, claimants were denied jurisdiction in the trial court to pursue
damages based on the denial or delay of benefits to which the TWCC had established no clear entitlement.  See  
id.; see also Pickett, 239 S.W.3d at 837-838 (claimant was required to exhaust administrative remedies - despite
agreement with insurer - when agreement did not resolve any issues concerning claimant's entitlement to
medical benefits).  

Kelly argues on appeal that his BDA relieves him of the necessity of the TWCC process for two reasons.  First,
he points to the  Fund holding that a BDA constitutes a final order by the TWCC, when resulting from the
statutory dispute resolution process and signed by both parties.  See Fund, 995 S.W.2d at 337.  However, in
both Fund and Ruttinger, the relevant BDAs expressly created an entitlement to medical benefits or treatment.  
See id. at 336 (agreement stated: A[t]he carrier shall pay reasonable and necessary medical per the act");
Ruttinger, 265 S.W.3d at 656 (agreement stated that Athe insurer would pay >reasonable and necessary
medical'").  In the present case, there was no express entitlement to such benefits.  In fact, as the record
indicates, medical benefits or specific treatments were never a consideration in any of the three BDAs signed by
the parties.    

Kelly's appeal also relies on the statutory language stating that “an agreement...is binding on the insurance
carrier through the conclusion of all matters relating to the claim."  Tex.  Lab.  Code Ann. § 410.030(a).  
However, appellees have never challenged the enforceability of Kelly's BDA; rather, they challenge its content
and meaning.  Much like the case in Pickett, Kelly's BDAs merely specified the nature of his injuries and
determined that they were generally compensable.  As previously stated, the benefits afforded to compensable
injuries come in many forms.  See id.  § 401.011(5), (10), (11).  Absent a specific order or agreement related to
medical benefits, appellees retained the authority and responsibility to approve or deny requests for
preauthorization for medical treatments “based solely upon the reasonable and necessary medical health care
required to treat [his] compensable injury." See Pickett, 239 S.W.3d at 837-38; see also Tex.  Admin.  Code
Ann.  § 134.600 (Vernon 2002).

Even if we were to read the BDAs as conferring specific medical benefits, the Act provides that an entitlement to
medical benefits is limited to “all health care reasonably required by the nature of the injury as and when
needed."  Tex.  Labor Code Ann.  § 408.021(a) (Vernon 2006) (emphasis added).  Further, the Act provides a
narrow exception allowing an insurance carrier to require preauthorization when spinal surgery is involved.  See
id.  §  408.026, 413.014(c)(1) (Vernon 2006).  Consequently, even if appellees had expressly agreed to provide
Kelly with medical benefits, they would still retain the right to require preauthorization of the spinal fusion under
the Act.    

Because Kelly, like the Pickett claimant, did not submit any denied preauthorization requests to the TWCC, he
has failed to exhaust his administrative remedies under the Act.  Consequently,  the trial court had no subject-
matter jurisdiction over this action.  The trial court properly granted appellees' motions.  Kelly's second issue is
overruled.       

CONCLUSION

Having overruled both of Kelly's issues on appeal, we affirm the judgment of the trial court.

/s/      Jeff Brown

Justice

Judgment rendered and Memorandum Opinion filed November 25, 2008.

Panel consists of Justices Yates, Guzman, and Brown.

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[1]  A benefit review conference is “a nonadversarial, informal dispute resolution proceeding" designed to:

(1) explain, orally and in writing, the rights of the respective parties to a workers' compensation claim and the
procedures necessary to protect those rights;

(2) discuss the facts of the claim, review available information in order to evaluate the claim, and delineate the
disputed issues; and

(3) mediate and resolve disputed issues by agreement of the parties in accordance with this subtitle and the
policies of the division.

Tex.  Lab.  Code Ann.  §410.021 (Vernon 2006).