Bad Faith and Texas Mutual Insurance

Houston attorney Mike Doyle and TMI are locked in a battle over truth, lies and an employee's right to workers' comp benefits.

Rogers, who does a lot of workers' comp cases both as a witness for insurance companies and injured workers and as an attorney representing injured workers and health care providers, won't touch bad faith cases.

It's not because he's against them; he says he can't afford them. "The amount of money we would have to put into them is just too much; we don't have it." He says proving damages in such cases, such as loss of credit reputation, can be very costly, with expert witnesses sometimes clocking in at $300 an hour.

Jeff Raizner, Doyle's law partner, says these cases take a long time to try, which discourages most people. If you get to the point where you can explain what happened before a jury, you have a chance, he says.

It doesn't matter how many times they've won in court, Lance Morris and his wife, Karen, are still waiting for their case to be over, as Texas Mutual continues its appeals.
Margaret Downing
It doesn't matter how many times they've won in court, Lance Morris and his wife, Karen, are still waiting for their case to be over, as Texas Mutual continues its appeals.
Attorney Mike Doyle says there is no way insurance companies should be immune from bad faith workers' comp cases.
Margaret Downing
Attorney Mike Doyle says there is no way insurance companies should be immune from bad faith workers' comp cases.

"I can't sue for the benefits; that's what you have to win over in the commission first before I can even take your case," Doyle explains. "What I can sue for is the difference between where you should have been if they'd done it when they should have, and where they left you."

Rogers, who is also the chairman of the committee that advises the State Board of Legal Specialization on the workers' comp specialty, also disagrees with Nichols that civil court judges and juries just aren't equipped to hear cases involving alleged damages from workers' comp disputes.

"Well, go tell that to the judge, that you don't really understand this," Rogers says. "There are so many more things that go to court that are far more complicated than workers' compensation. Good lord, I've been listening to all this stuff about financial instruments. I mean, who understands that? Courts are expected to. That's the job of the advocate, to break it all down into terms the court can understand."

But according to what Texas Mutual argues, a misunderstanding of the law is exactly what happened in the Morris case. According to TMI, the appeals court didn't understand workers' comp law and got the case exactly backwards.

Texas Mutual argues that it was well within its rights to contest the claim initially because Morris had left out the 1998 injury. The fact that TMI didn't discover the 1998 incident until years after it denied him coverage makes no difference as a point of law, Nichols says.

"The law is that you can consider everything. That it doesn't have to be what you know at the time of the denial."

Also, Doyle's argument to the contrary, Nichols says there is no such thing legally as an "industry standard" to have a three-point contact of employer, employee and treating doctor before denying a claim. Adjusters have to meet regulatory deadlines just as injured employees do in workers' comp claims. They can issue a denial and resolve it later while they continue their investigations, she says. A pre-­authorization is only agreeing that surgery is needed, not saying Texas Mutual should have to pay for that surgery, she maintains.

And, once the lost medical records were located, their own medical expert, who'd given Morris the benefit of the doubt when he had no records to go by, instead concluded that the 2003 herniations were not connected in any way with the injury in 2000, Nichols says.

There was never any testimony in trial proving that the insurer was "actually aware" that its claims-handling was "false, deceptive or unfair, " TMI says.

Nichols calls bad faith cases "recent accusations. I think they're completely unjustified." She says she has "every confidence in our adjusters" and identifies Texas Mutual as a "high-integrity company." So why is Mike Doyle filing these cases against them? "Because he wants to make some money," she says.

"The number of bad faith claims we have against us is very, very tiny in comparison to the number of claims," she adds. "At the moment we probably have pending maybe 15 or 16 bad faith claims... Some will just go away because they haven't exhausted their remedies or they were just attempts to get some fast money maybe. That's not just this year. We handle probably 30,000 claims a year. Say 15 cases cover conservatively three years, that would be 15 cases out of 90,000 claims."

Some people would say it could only happen in Texas or in a country song. But in 1979, Lance Morris's 18-year-old sister broke her neck in a cheerleading accident and died. Only ten, "fixing to be 11," Morris decided that maybe something had gone wrong. "Maybe she was mishandled. Maybe she was mispackaged," he says now. He decided to become a firefighter himself someday to make sure things went right, and when his family later moved to Justin, Texas, with its junior firefighter program for teenagers, he joined up.

"I worked for free for 19 years daylight to dark, rain, snow, heat. It didn't matter; whenever the fire alarm went off, I went to work."

Unusual among small-town volunteer fire departments, Justin got workers' comp coverage for its firefighters. This was important to Morris and the other firefighters, he says; it was acknowledgment that what they did was appreciated, and they were protected even if they weren't "big city."

Morris is a man stalled in life just before his 40th birthday, and it's hard to say when that's going to change. Texas Mutual continues to appeal his case, so nothing is settled there.

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