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Texas Supreme Court Ruling Expands Protections for Insurance Companies

by | Mar 11, 2015 | Worker Injury

Recently, the Texas Supreme Court expanded protections available to insurance companies facing lawsuits from injured workers.

In 1997, Glenn Johnson suffered terrible injuries as a result of an explosion at a smelting plant where he worked in Amarillo. He was left with severe burns all over his body and even had to have an arm amputated. In addition to the physical pain Johnson sustained, he was also forced to endure a fight with insurance adjusters.

Johnson is entitled to receive lifetime workers’ compensation benefits for the injuries he sustained as a result of the accident. However, insurance adjusters engaged in a consistent pattern of discouraging and denying benefits to Johnson and his wife. The most shocking example of this practice was the false accusation of insurance fraud against the Johnsons, which led to their arrest.

As a part of Johnson’s rehabilitation, he worked out a gym a few hours away from his home, which was in a small town. When insurance adjusters suspected Johnson was not actually using the gym, they filed a criminal complaint against him. The complaint relied on electronic records which showed that Johnson was not using his swipe card to enter the gym. Johnson was indicted by a grand jury and arrested for insurance fraud.

However, the charges were dropped after employees at the gym submitted affidavits attesting to Johnson’s attendance. The employees explained that, since Johnson’s injuries made it difficult to remove the card from his wallet, they opened the door for him.

The Johnsons sued their insurer and claims service provider on a number of theories, including intentional misrepresentation and malicious prosecution. However, the Texas Supreme Court dismissed their case on February 27, holding that state workers’ compensation law required the Johnsons’ claims to be heard by the Texas Department of Insurance, Division of Workers’ Compensation. The Court’s ruling expands protections for insurance companies announced in Texas Mutual Insurance Co. v. Ruttiger, a 2012 decision holding that the Division of Workers’ Compensation has exclusive jurisdiction over bad faith actions in the claims handling process.

If you are injured on the job and disputes arise as to the financial recovery available to you, it is important to understand your rights. If you or someone you know has been injured on the job, contact an attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-396-3964 or toll free at 800-594-4884.


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