Late in 2012 there was a decision on failure to pay workers compensation benefits in a timely manner in the Supreme Court of Texas. The matter, Texas Mutual Insurance Company v Morris, was an appeal from that state’s 14th District Court of Appeals. .
Lance Morris (Morris) sustained a back injury while working for the Justin Community Volunteer Fire Department on 12 June 2000. A workers compensation claim was lodged and liability was accepted by Texas Mutual Insurance Company (TMIC), including funding for a lumbar laminectomy for herniated discs in 2003. TMIC subsequently disputed the causal relationship of the disc herniations to the 2000 injury.
Morris sought and attended two unsuccessful benefit review conferences. Ultimately a case hearing by the Texas Department of Insurance Division of Workers’ Compensation found that the 2000 accident had caused or aggravated the disc herniations and that TMIC remained liable to pay compensation.
Morris thereafter sued TMIC over this denial and delay in paying benefits. He alleged a breach of article 21.21 of the Insurance Code, failing in a common law duty of good faith and fair dealing, and breach of the Deceptive Trade Practices Act. He was successful at first instance and partially successful on an appeal by TMIC to Texas’ 14th District Court of Appeals.
TMIC appealed to the Supreme Court of Texas. The Supreme Court rejected the submission that the court at first instance lacked jurisdiction because Morris had not exhausted the administrative remedies available under the Workers’ Compensation Act: while there were means for expediting the review process he had not used, the Act had apparently intentionally not imposed a mandatory deadline and so any delay went to mitigation of loss rather than jurisdiction.
TMIC submitted that actions for unfair claims practices under Insurance Code §541.060 and breach of the common law duty of good faith and fair dealing were irrelevant in workers compensation matters. The Court upheld this contention consistent with its own recent decision in TMIC v Ruttiger. The Court also found that Morris’ claim for misrepresentation of an insurance policy under Insurance Code §541.061 was ill-founded on the facts, undermining his action under the Deceptive Trade Practices Act.
In the result, the Court reversed the Court of Appeals’ judgment gave judgment that Morris’ claim be rejected.