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Supreme Court Sides with Insurer against Injured Worker

In a recent decision, the Texas Supreme Court ruled that an injured employee who was denied worker’s compensation benefits was not entitled to sue the carrier for its violations of the Texas Insurance Code.

The case is Texas Mutual Insurance Company v. Ruttiger, ___ S.W.3d ___ (Tex. 2011). In it, a carrier denied benefits to a worker after performing an inadequate investigation of the circumstances of his injury. At a later administrative hearing, it agreed to pay the benefits required by the workers’ compensation statute. Subsequently, the worker sued the carrier under the Insurance Code for its violations of the law, and a jury awarded damages to him.

Notwithstanding the verdict, the Supreme Court ruled that a worker is barred from suing an insurance carrier under the Insurance Code for unfair claims settlement practices, even though the workers’ compensation statute nowhere removes the rights of the worker provided by the Insurance Code. Though the Court would allow a suit for misrepresentation, it found none in this case.

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