On April 26, 2014, a fire and explosion at the Georgia-Pacific plywood mill in Corrigan, Texas killed several employees and seriously injured others, and the injured workers and the survivors of Kenneth Morris received workers' compensation benefits from Georgia-Pacific's carrier, Old Republic.¹ The workers and survivors then settled with several Georgia-Pacific-related entities, including a $6.5 million settlement in which Old Republic, as Georgia-Pacific's liability carrier and a signatory, agreed not to claim a subrogation interest in the settlement funds or seek a credit against future benefits.² Old Republic asserted an inflated subrogation lien against their personal-injury recoveries and refused to substantiate it, so they sued for a declaration of the proper lien holder, the lien amount, and the employer liability offset.³ Old Republic says that because the workers settled almost all their claims before the federal jury verdict, the judgment itself accounted for only a small fraction of one claimant's recovery and was reduced by settlements, not by the employer's responsibility.⁴

Old Republic's plea to the jurisdiction was denied, the court of appeals abated the case for a Workers' Compensation Division decision on the lien amount, and Old Republic then stipulated to a lien several million dollars lower than first claimed.¹ On March 11, 2022 the 217th District Court of Angelina County granted the workers' summary-judgment motion and denied Old Republic's, and it later awarded fees and entered final judgment for the workers.² The Twelfth Court of Appeals (Tyler), in a published opinion by Justice Hoyle on September 30, 2024, applied a settlement-credit limitation to the offset, which eliminated it for Morris, Ordaz and McCollough and substantially reduced it for Williams, and it remanded for redetermination of fees.³ The Supreme Court granted review on March 27, 2026.

Petition for review from the Twelfth Court of Appeals (Tyler); granted March 27, 2026. Argued September 15, 2026.

• The workers:¹ (1) whether the court of appeals decided the case on an unpreserved issue first raised in Old Republic's reply brief; (2) whether it erred by grafting a "settlement credit limitation" from section 33.012(b) onto the offset in Labor Code section 417.001(b); (3) whether Old Republic is estopped and contractually barred by its stipulations and the settlement release; and (4) whether the trial court properly granted the workers' summary judgment.
• Old Republic:² that the court of appeals correctly applied the employer responsibility offset in accordance with governing statutes, in light of the carrier's long-established first-money subrogation lien.

The case comes up on cross-motions for summary judgment on the proper calculation of the employer liability offset, and the workers argue the court of appeals ignored the error-preservation and waiver rules.¹

Whether the court of appeals could rely on the settlement-credit argument.

The workers (Petitioners): Old Republic first raised the section 33.012(b) argument vaguely in its reply brief and made it central at oral argument, after stipulating in the trial court that it was not making it, so it was unpreserved and waived, and the court of appeals ignored those rules to reach a result it found more palatable.¹ They add that Old Republic was a signatory to the settlement agreements and contractually agreed not to claim an interest or credit in the Georgia-Pacific funds.²

Old Republic (Respondent): The carrier's first-money subrogation lien is a bedrock principle, and the 2003 amendment limited it only as to the claimant's recovery by court judgment where the judgment is reduced by the employer's comparative responsibility.³

How the offset is calculated.

The workers (Petitioners): Section 417.001(b) refers only to section 33.003 and to the reduction of the judgment for the employer's percentage of responsibility, not to section 33.012(b), so settlement amounts play no role, and the court of appeals' reading eliminated or reduced the offset for each worker.⁴

Old Republic (Respondent): The workers claim the lien of more than $4 million was erased even though their pretrial settlements far exceed the lien, and the judgment was reduced by settlements rather than the employer's responsibility, so neither the declaratory judgment nor the fee award can stand.⁵

The workers argued the court of appeals ignored error-preservation rules and the plain language of Labor Code section 417.001(b), reading terms from a separate statute into it, and asked the Court to reaffirm uniform application of the preservation rules and direct lower courts on the offset statute.¹ Old Republic argued the petition would upend a century of subrogation law.²

• Double recovery? Asked whether the workers' calculation would give them a double recovery, counsel said no: the statute controls the carrier's subrogation interest and can override the common-law bar on double recovery. (Oral Argument, 2:01:01)
• First money on settlements. Asked whether the carrier has a first-money lien on settlement proceeds, counsel said yes, but argued the lien amount is undetermined once a later trial occurs. (Oral Argument, 2:03:57)
• Where is the answer? Asked what "first money" is on these facts, counsel said it is undetermined and pointed to the trial court's sealed order, which did the settlement-credit analysis. (Oral Argument, 2:07:24)
• Which statute governs the reduction? Counsel said the section 33.012 reduction operates between the liable party and the claimant and has nothing to do with the carrier's rights, which a specific statute governs. (Oral Argument, 2:11:27)
• Why not follow the statute? Asked why the Court should not simply follow the statute, counsel said the way the federal judge calculated the underlying judgment prevents calculating it that way. (Oral Argument, 2:18:38)
• Same math either way? A Justice said the answer is mathematically the same; counsel said 95% includes the employer's 65% but also the other defendants' shares. (Oral Argument, 2:22:28)
• No incentive to blame the employer. In rebuttal, the workers' counsel said there is no incentive to pursue the employer unless it is substantially at fault, which is how the statute reduces the lien. (Oral Argument, 2:40:02)
• Start with damages awarded. A Justice read section 33.013 as starting from the damages awarded and reducing by percentage of responsibility, asking whether that answers what amount to start with. (Oral Argument, 2:44:16)

None noted