The Plaintiff, Morris, admittedly sustained an on-the-job injury which was covered by a workers’ compensation policy issued by the Defendant, Texas Mutual Insurance Company (TMIC). TMIC recognized the injury as compensable and began to pay benefits. When it was determined that Morris’ injuries were much more serious than they first appeared and that Morris has sustained multiple lumbar disc herniations TMIC quit paying benefits and disputed that the disc herniations were work related. TMIC’s refusal to pay for required medical treatment caused Morris damages. Morris challenged TMIC’s refusal to pay benefits and the Texas Department of Insurance Division of Workers’ Compensation confirmed that Morris’ disc injuries were work related and ordered TMIC to resume paying medical benefits.
Morris sued TMIC for violating Article 21.21 of the Texas Insurance Code, breaching the common law duty of good faith and fair dealing, and violating the Texas Deceptive Trade Practices Act(DTPA)for the damages caused by TMIC’s bad faith refusal to pay medical benefits. The jury awarded damages for mental anguish, damages for loss of credit, additional damages because TMIC acted knowingly, and attorneys’ fees. The Court of Appeals affirmed the verdict.
The Texas Supreme Court reversed the verdict in light of the Court’s opinion in Texas Mutual Insurance Co. v. Ruttiger. In Texas Mutual Insurance Co. v. Ruttiger the Court held that a worker’s compensation insurance company could not be sued for its’ bad faith denial of a legitimate claim and that the injured worker’s only remedy in such a situation is to challenge the carrier’s conduct by appealing the decision within the workers compensation system.
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