Judge Throws Out ‘Bad Faith’ Claim Against Texas Mutual

November 19, 2008

A judge in Guadalupe County, Texas, has dismissed a case alleging that Texas Mutual Insurance Company acted in “bad faith” in a workers’ compensation case involving a pre-existing medical condition.

Texas Mutual reported that District Court Judge W.C. Kirkendall sided with the workers’ compensation insurer in ruling that Texas Mutual established a reasonable basis for its decisions in handling the workers’ compensation claim of Charles E. Durst Jr. of Seguin, and therefore cannot be held liable for bad faith as a matter of law.

Texas Mutual paid medical and income benefits to Durst after he suffered an on-the-job injury at a New Braunfels golf course in November 2004. However, Texas Mutual contended that Durst’s work injury did not extend to a pre-existing degenerative spine condition, and therefore he was not entitled to workers’ compensation benefits for that condition, including a three-level lumbar fusion surgery. Among other evidence, Texas Mutual relied on the opinion of a board-certified orthopedic surgeon in questioning the extent of the compensable injury.

Represented by Houston plaintiff’s attorney Mike Doyle, Durst alleged that Texas Mutual acted in bad faith in this dispute.

In issuing a November 14 letter explaining his reasons for granting summary judgment in favor of Texas Mutual, Judge Kirkendall wrote that Texas Mutual could not be held liable for bad faith in its dealings with Durst. “A bona fide dispute does not rise to the level of bad faith,” the judge wrote.

Judge Kirkendall noted first that Texas Mutual, in disputing the medical question involved, had relied on a doctor’s opinion; second, that five other doctors testified that the doctor’s opinion Texas Mutual relied on was reasonable; and third, that no medical expert said the opinion that Texas Mutual relied on was in bad faith or outside the medical norm.

“We are heartened by the ruling,” Russell Oliver, president of Texas Mutual, said. “The District Court applied a key and often misunderstood part of the law — the difference between an honest difference of opinion and bad faith. When the benefits dispute turns on medical expert opinion, we have to be able to rely on a doctor’s opinion. Doctors sometimes disagree, and sometimes the Division of Workers’ Compensation agrees with the other side’s doctor. That is all that happened in this case.”

“The vast majority of workers’ compensation claims at Texas Mutual,” Mr. Oliver added, “are paid with no dispute at all. Whether the claim is a small dollar claim or a large one, our goals are to pay correctly for actual workplace injuries, help the worker recover from actual workplace injuries, and get back to work when they’re recovered from their workplace injuries.”

Source: Texas Mutual Insurance Company, texasmutual.com

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Latest Comments

  • November 20, 2008 at 10:55 am
    Bluemax says:
    It is nice to see a follow up on an earlier article to bring some closure to an earlier report. Thanks to National underwriter.
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