Texas Law Denies Ability to Claim Bad Faith against Workers Comp
Disturbing news for any employees in Texas who feel their workers’ compensation insurance carriers have acted in bad faith, as a recent State Supreme Court ruling has made it illegal for them to bad faith insurance lawsuits against the companies.
The ruling was the result of a bad faith insurance lawsuit that had been brought by Timothy Ruttiger against Texas Mutual Insurance Co. and claimed the company had unfairly denied his injured worker’s claim. While a Houston jury initially ruled in his favor and awarded him more than $170,000, the Supreme Court later overruled the initial award and sent the initial bad faith claim back to an appellate court for reconsideration.
However, the Supreme Court then acted again before the reconsideration could take place, denying the lawsuit while also eliminating a bad faith lawsuit provision that had been a law in Texas for the last 23 years.
“The continued existence of bad-faith claims will subvert the Legislature's meticulous soup-to-nuts system, one augmented by an immense regulatory and adjudicatory framework that, taken together, now regulates virtually every aspect of how a carrier handles a worker's compensation matter," Justice Don R. Willet wrote in the Supreme Court’s 5-4 decision, according to the Austin American Statesman.
Alex Winslow, a member of the Texas Watch Foundation's Court Watch project, voiced his disapproval of the decision, saying that "Five robed justices have gone out of their way to second-guess the clear and decades-long intent of the Legislature."
Not surprisingly, Texas Mutual, which controls one-third of the state’s workers’ compensation market, applauded the decision.
A decision like this is yet another example of the difficulties that can arise during a bad faith insurance lawsuit, and can be best dealt with by an insurance denial law firm with years of experience in that field. Call Sokolove Law today for a free legal consultation regarding a bad faith insurance lawsuit. For legal help, call (800) 581-6358.
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