Bad Faith and Texas Mutual Insurance

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Also as part of this appeal, Texas Mutual argues that bad faith damages should not be allowed in workers' comp.

"An adjuster can make a wrong decision," Nichols says. "The information about him getting hurt playing softball turns out not to have been correct. Adjusters are going to make mistakes once in a while. The bad faith cause of action is supposed to be reserved for very egregious wrongs."

Bad faith cases try to make a separate, punishable incident out of something that should be all of one piece, Nichols says. If they delay surgery so that a person's condition worsens and it ultimately takes longer to treat him, well, Texas Mutual has to pay the added costs. Why pile it on with damages?

"We're going to be paying for Mr. Ruttinger's injury," Nichols says. "We pay for unlimited lifetime medical. So if we delay your shoulder surgery and your shoulder gets worse, that's still our nickel. We're going to keep paying."

"That's not a separate and independent injury. That is the comp claim that we are taking care of. That's the shoulder that we bought."

Nichols, TMI senior vice president and general counsel, joined Texas Mutual in 1995 after practicing law for ten years at Vinson & Elkins.

She maintains that there should be no confusion for denied workers seeking to navigate the workers' comp system. "They are informed on just about every piece of paper they get. If we dispute a claim, we have to send a standardized form saying that we don't agree that this is compensable or that this is warranted. And it tells them, 'So here's what you can do.'"

Pete Rogers, a Richardson attorney with the firm of Rogers, Booker & Lewis who does a lot of workers' comp work, reacts to Nichols's statement with a laugh.

"That's just crazy. Who do you think your average injured worker is? You think they're capable of doing it? You're injured, you're in pain, you don't know what to do. I don't have any clients that have had a clue as to any of this. It's a crazy system. It presupposes that your average everyday injured worker is an attorney or at least has a college education."

He's echoed in this by Brian White, deputy counsel of the Office of Injured Employee Counsel, which is dedicated to helping injured workers. "It's not very intuitive. Some employees are not English speakers, which just complicates things. Compensability doesn't translate into other languages very well. Even in English, it's confusing."

Nichols says dispute resolutions go quickly. "If you're worried that there's a delay that's going to hurt you, you can even ask for an expedited hearing and you're going to be in there on a very level playing field and a very fast resolution."

This doesn't match the reality Doyle and other attorneys say they've encountered. They say it can take weeks or months to get to a benefit review conference or contested case hearing and that expedited hearings aren't easily granted.

Nichols says that's not the system's fault. "What happens is, people don't bother to ask for a resolution," she says.

"Our adjusters really try to do the right thing," she says, adding, "We don't have shareholders breathing down our necks trying to squeeze every penny."

While Texas Mutual makes frequent references to all the oversight it has that keeps it on the straight and narrow, it would like to ditch at least part of that — the governor's appointees to its board.

It plans to lobby in the upcoming 2009 legislative session that it should become even more of a private company. Several nearby states have rules that forbid an employer buying a workers' comp policy from a company that in whole or part is controlled by another state. This, of course, has a discouraging effect on Texas Mutual's business.

But even without the governor's appointees, Nichols says, Texas Mutual works in such a heavily regulated industry that workers' rights will always be ­protected.

Lawyers who practice workers' comp generally aren't thought to occupy the loftier, more prestigious realms of the attorney hierarchy.

Cases tend to have a low return on investment, and all sides are dealing with a system that legislators periodically "tweak" to rid it of its newest, latest excesses.

Most of Mike Doyle's work has been in offshore and overseas injury cases. According to him, it was actually Texas Mutual that got him started filing bad faith workers' comp cases.

It all started with a sandblaster with lung disease working for a company in Alice, Texas. Doyle was looking into it as a pro bono case. After 23 years doing "sandblasting without protection," Lucas Lopez, 52, had a condition that was like chronic bronchitis, Doyle says. But Doyle's firm was only accepting cases of silicosis — a progressive, usually fatal lung disease caused by breathing in silica — and Doyle told him he was sorry but it was a no-go. Lopez handed him a workers' comp form; Doyle figured it was the least he could do and helped him fill it out. Case closed.

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