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Bad Faith and Texas Mutual Insurance

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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."
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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.

As a result of his back problems, he says he can't do any of the work he's trained for, can't lift anything heavy. His dream was to become a Houston firefighter after he moved to the area. But because he was still recovering from the surgery, he lost the opportunity to take a civil service exam before his 36th birthday, he says, and now he's too old to qualify to work for them. It's hard to understand how he could physically do the job either.

He goes over to his wife's store — she runs a small pet grooming and boarding facility — and helps out at the front desk.

"I've been on one of the biggest tower fires in the state of Texas. I've been on one of the biggest chlorine derailments in the United States," he says, mixing pride and pain. "I've done all these high-­profile things. Here come the firefighters. They're here to save the day, riding in on a white horse.

"Now I count the beans and do customer service."

Doyle continues to allege that if it's a significant case involving a lot of money, Texas Mutual escalates its denials. "They'll deny on this reason. They'll deny on that reason. They'll deny each and every prescription. It's an exhaustion-of-­remedies deal. You are going to be exhausted before you ever think about filing a lawsuit against these guys.

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