Bad Faith and Texas Mutual Insurance

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The workers' comp claim was denied almost immediately on the grounds it was not work-related. That was in 1996.

"I say, 'I'll sort this out.' So for free, I went all the way through the comp system," Doyle says. Lopez kept losing because whenever Texas Mutual sent him to one doctor after another to be evaluated, each physician would issue a report saying the fault was due to the patient's history of smoking, Doyle says.

Except, as Doyle tells the story, it was a "total lie," or close enough. His client's "only experience with smoking was limited experimentation between the ages of 15 and 17, over 30 years ago," Doyle wrote in a 1998 letter to the then-president of the then-Texas Workers' Compensation Insurance Fund.

Doyle filed a case, appealing to the state district court. He subpoenaed the doctors' records. "I find out that a Texas Mutual adjuster had been sending secret notes to each of the doctors before he showed up and saying that 'Mr. Lopez will deny this, it's not in his medical records, but I confirm that he's a longtime smoker.'"

"The jury said yes, he's injured. So we win the trial...I wrote a demand letter. I'm waiving all of my fees. I had to spend three hours researching the law, so pay me $3,000 to write this letter and do the research and pay him $90,000 because you delayed him for 18 months wrongfully. He was not getting his medicine." At the time, Lopez was the sole support of his wife and 11-year-old disabled daughter, Doyle wrote in the 1998 letter. "No money. No medicine. Lived in a shack with no air conditioning," he sums up today.

Their response: Texas Mutual sued his client, asking an Austin state district court for a declaratory judgment that they didn't have to pay Lopez anything.

Doyle won again. Texas Mutual appealed, and that's when Doyle filed his first bad faith case in 1998. During all this time, Lopez received no payments for medical care until the Texas Supreme Court rejected TMI's last appeal in the workers' comp case in October 2000, Doyle says.

As for the bad faith case, in April 2001, Texas Mutual settled with Doyle right before trial, he says. According to Doyle, he had a new mission. "Let me talk to the five guys in town who do comp, tell me your worst cases. That's how I started."

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.

"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.

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