Friday, October 10, 2014

Trucks, Texas and Arbitration

Truck driving remains one of the riskiest occupations in the nation.

Working as a truck driver for non-subscribing Mission Petroleum Carriers of Houston, TX, adds to that risk.

David Kelley worked as a driver for Mission Petroleum, transporting crude oil, gasoline and diesel fuels throughout Texas and surrounding states.

Last January, as Kelley was driving a Mission-owned 18-wheeler, an axle on the truck allegedly broke, causing him to crash. Kelley suffered seven fractured vertebrae, six broken ribs and bruised lungs.

While he was recuperating in the hospital, a representative from Mission came to visit, bearing paperwork for him to sign. This paperwork authorized Kelley’s participation in Mission’s Health and Safety Plan, offered by Mission’s parent company, Tetco Inc.

The plan provides benefits for workers who are hurt on the job, including medical care, rehabilitative care, wage replacement, dismemberment and permanent impairment benefits, and death benefits.

Kelley was told he had to sign the paperwork in order to secure medical benefits.

According to his wife's testimony, Kelley was incoherent, as he was on a morphine drip and she had to hold the pen in her husband's hand in order to get his signature on the paperwork.

Seemed like a nice thing - coverage for what would likely be very high medical treatment costs and some disability compensation to tie things over until he could return to work...

Though Kelley started receiving the plan's disability benefit of $935 per week, he sued them anyhow for negligence, etc. due to the broken axle.

The papers that Kelley signed however contained an arbitration clause that apparently neither he, nor his wife, either noticed, or cared about, or didn't know enough to care about...

So Mission moved for arbitration in the early stages of litigation, which the trial court denied.

Kelley had argued that he was not capable of understanding his actions due to his incapacity in the hospital. Mission countered that it didn't matter under Texas law, citing a prior 14th DCA case called In re Weeks Marine.

In that case, the 14th DCA ruled that a worker could not repudiate his agreement to enroll in the plan on the basis of procedural unconscionability or duress after he had accepted $20,000 in benefits from his employer pursuant to the plan.

On appeal to that same district, the court found in Kelley's case that "even if the agreement is procedurally unconscionable, Kelley’s acceptance of benefits under the agreement with full knowledge that the agreement was not legally binding prohibits him from repudiating it."

By accepting the benefits, the court said, Kelley agreed to be bound by the terms of the Mission benefit plan. Once he did so, the court said, he could not later withdraw his ratification and seek to avoid the contract.

I'm not sure what made the 14th DCA conclude that Kelley had "full knowledge that the agreement was not legally binding" but this case is demonstrative of the power of an arbitration clause: accepting the benefits of a contract means one also accepts the limitations.

The case is Mission Petroleum Carriers v. Kelley, No. 14-14-00072-CV.

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