Two recent Texas court decisions, including the October 18, 2013, decision in Hopper v. Argonaut Insurance Company, Inc., have established that there is no common law bad faith in Texas regarding workers’ compensation claims. First, last year, in Texas Mut. Ins. Co. v. Ruttiger, the Texas Supreme Court, finding that the reforms to the Texas workers’ compensation statutes in the 1990’s provided for adequate safeguards, abolished the common-law duty of good faith and fair dealing.
In Ruttiger, Texas Mutual disputed plaintiff Timothy Ruttiger’s claims for a workplace injury because his employers reported that the injury occurred at a non work-related softball game. Though the insurance carrier eventually agreed to pay workers’ compensation benefits, Ruttiger filed suit alleging both common law and statutory bad faith causes of action because his claim was initially denied. Initially, the trial court found that Texas Mutual’s insurance adjuster acted in bad faith when it believed the employer instead of the employee, Ruttiger. However, the Texas Supreme Court disagreed and held that an injured employee could not assert a common-law claim for breach of duty of good faith and fair dealing against a workers’ compensation insurance carrier. Notably, at the time, the court did not go as far as to hold that the Texas Workers’ Compensation Act was the exclusive remedy for all work-related injuries, meaning that following that decision, workers could still bring a bad faith claim against a workers’ compensation insurer under the Texas Insurance Code Section 541.061 for a misrepresentation of the policy.
More recently, however, in Hopper v. Argonaut Insurance Company, a decision by the Court of Appeals of Texas all but eliminated a claimant’s ability to bring a bad-faith claim of any kind. In Hopper, Mr. Hopper sustained a wrist injury on the job and received workers’ compensation benefits. Several years later, he died of a drug overdose of the pain medication he was prescribed following his injury. After the deceased’s family sought workers’ compensation death benefits, the workers’ compensation insurer denied the claim for two years, challenging whether Mr. Hopper’s death was work-related and his family’s status to bring the claim.