$8.7 million award overturned by Texas appeals court

By Ruth de Jauregui | May 13, 2016

HOUSTON – A workplace injury award for $8.7 million was overturned by Texas appeals court on April 28.

HOUSTON – A workplace injury award for $8.7 million was overturned by Texas appeals court on April 28.

The Tenth Court of Appeals reversed the $8.7 million award after Tractor Supply Company of Texas appealed the lower court's decision. The appeals court ruled that Kenneth Edd McGowan, who was paralyzed in the accident, would receive nothing.

The incident occurred at the Tractor Supply Company distribution center in Waco on May 21, 2012. McGowan was working for Tractor Supply as a temporary employee. He was assigned to the job site by Job Link Personnel Services Inc. While McGowan was moving pallets with a pallet jack, employee Dwight Bledsoe was moving a 2,000 pound pallet of dog food with a forklift on the back side of the rack. 

The pallet pushed a second 1,000 pound pallet off the upper rack. The second pallet fell onto McGowan. It broke 18 bones in his spine, resulting in paralysis from the chest down, court records show.

McGowan and his attorneys, Travis Brewer and David Boyce, sued Tractor Supply Company, Tractor Supply Company of Texas and Bledsoe for $32 million in Waco's 170th District Court. Before the case went to trial, Tractor Supply Company, the parent company of Tractor Supply Company of Texas, settled for $3.5 million.

The case began with jury selection on Jan. 13, 2014. During the trial, McGowan testified via a videotaped deposition because he was recovering from a recent surgery at a Corpus Christi rehabilitation center. He remained paralyzed from the chest down and although he had some use of his arms, they were still numb.

After two weeks of testimony, the jury deliberated for less than three hours before coming in with the verdict. Tractor Supply Co. of Texas was found 100 percent liable for the incident. Bledsoe was cleared of negligence. The court awarded McGowan $8.7 million in damages.

Tractor Supply Co. of Texas appealed the award to the Tenth Court of Appeals on the grounds that the trial court deprived the company of the exclusive remedy defense of the Texas Workers' Compensation Act. Under that act, workers covered by worker's compensation cannot recover damages from the insured company, but only from workers' compensation.

In a previous case, Garza v. Exel Logistics Inc., the court found that Garza was an employee of the temporary agency as well as Exel Logistics. While the temporary agency had workers' compensation insurance, it did not explicitly cover the client company, Exel Logistics.

The appeals court ruling stated: "Unlike Garza, the record before us shows that the worker's compensation insurance policy obtained by Job Link includes an Alternate Employer Endorsement. The Alternate Employer Endorsement specifically provides coverage for bodily injury in the course of special or temporary employment by the alternate employer. Although Tractor Supply is not named in the policy as an alternate employer, the policy refers to the alternate employer as 'blanket' and Job Link provided Texas Mutual with a list of client companies and their respective job descriptions."

Although Tractor Supply of Texas is a non-subscriber to Texas worker's compensation insurance, the court's decision continued, "We find that Tractor Supply established that it is covered by workers' compensation insurance coverage for the injury sustained by McGowan."

After ruling that Tractor Supply was covered by workers' compensation insurance through the temporary agency, the court stated that the company was entitled to the defense set out in Chapter 408 of the Texas Labor Code. Due to the provisions of Chapter 408, McGowan was not entitled to recover damages from Tractor Supply.

The court set aside the trial court's judgment and ruled that McGowan would receive nothing from Tractor Supply of Texas.

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