The Texas Supreme Court has recently ruled against a fire fighter who was injured on the job. The gist of its opinion is that, once again, a workers’ compensation carrier cannot be liable under the main enforcement provisions of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (dtpa). In addition, the insurance company does not have a common-law duty of good faith and fair dealing to the injured employee.
The opinion was issued in Texas Mutual Insurance Company v. P. Lance Morris, ___ S.W.3d ___ (Tex. 2012), decided on October 26, 2012. In this case, “Morris injured his back while working for the Justin Community Volunteer Fire Department.” The fire department promptly reported to its workers’ compensation insurance company that Morris had injured “his back while working.” At that point, the carrier accepted the claim and paid benefits. Three years later, when Morris had to go to the emergency room due to severe pain, doctors determined he needed surgery. The insurance company disputed whether his condition stemmed from the job-related injury.
Morris then followed the administrative review scheme of the workers’ compensation act, and the Division of Workers’ Compensation ruled in his favor. Only after that did the carrier pay for Morris’ medical and income benefits.
Seeking recovery for his actual damages caused by the insurance company’s delay, and also seeking to recover attorney’s fees and statutory penalties, Morris sued it under the Insurance Code, dtpa, and common law. The jury who heard the facts of the case ruled in his favor, and the court of appeals affirmed his judgment (with a modification). The Supreme Court, however, “reversed and rendered,” meaning it threw out the case forever.
The Court ruled that, in an earlier decision, it had determined that a workers’ compensation insurance carrier cannot be held accountable under the Insurance Code for unfair claims settlement practices. That is because the amended workers’ compensation act, in the opinion of the Court, was comprehensive. And, since the employee cannot bring a claim under the Insurance Code, he was denied the protections the dtpa, too.
The Court also held that the amendments to the act “eliminated the need” for a carrier to liable when it does not handle a claim in good faith. The only remedy the Court will allow a worker to pursue requires proof that the carrier misrepresented the terms of the policy. Like most cases in which an insurance company refuses to pay the benefits it owes, that did not occur here.
The ultimate result is that, when an insurance company treats a injured worker in bad faith, it cannot be held responsible under the dtpa, the common law, or the most meaningful provisions of the Insurance Code.