The Texas Supreme Court recently issued its’ opinion in Texas Mutual Ins. Co. v. Ruttiger. This was a long awaited opinion by those who handle workers’ compensation claims. The opinion marks a shift in the law and will be important for those who practice in this area to keep in mind.
In summary, the court held as follows:
1. A workers’ compensation claimant cannot bring a cause of action under Ch. 541.060 or 542.003 of the Insurance Code for unfair settlement practices against a workers’ compensation insurance carrier because their exclusive remedy for such claims is through the Workers’ Compensation Act itself.
2. A workers compensation claimant can, however, bring a claim through Ch. 541.061 of the Insurance Code, if a workers’ compensation insurance carrier misrepresents a policy through an untrue statement of material fact. In Mr. Ruttiger’s case, however, the court held there was legally insufficient evidence to support such a claim.
3. A plurality of the court held that there should no longer be a common law cause of action for breach of the duty of good faith and fair dealing against a workers’ compensation insurance carrier. The plurality of the court would overrule Aranda, which has been the law in Texas for over twenty years.
