Two longstanding precedents–including landmark workers’ comp case–’should be overruled’

m

There’s times for almost any attorney who enjoys litigation when the best feeling in the world is to win a big court case for a deserving client.

Sometimes, though, the best thing a lawyer can do for a client is to negotiate a good, solid settlement and keep the case out of court. It’s sad to say, but sometimes the merits of a case may not “matter” as much as political sway–take the ruling by the US Supreme Court calling a corporation a person, thereby opening the floodgate to campaign finance as a  gluttonous abandon never envisioned by the Founding Fathers.

Supreme Court overturns 20 years of ‘established law’

According to a Texas consumer activist group, such a ruling was recently handed down by the Texas Supreme Court:

In a major opinion today, the Texas Supreme Court overturned more than 20 years of established law to protect workers’ comp insurance providers from claims by injured workers.  In the opinion, Texas Mutual Insurance Co. v. Timothy J. Ruttiger, the Court ruled that injured workers who have been subjected to bad faith claims handling by their workers’ comp insurance provider are not protected by the Texas Insurance Code’s provisions against “unfair settlement practices.”

“Once again, the Texas Supreme Court is upending established law, ignoring the legislature’s clear intent, and overturning its own precedents to shield big insurance companies from responsibility to hard working Texans,” said Alex Winslow, executive director of the citizen advocacy group Texas Watch.  “Today’s decision allows insurance companies to purposely deny, delay, or underpay legitimate claims without fear of penalty or public accountability.”

Workers in Texas already face significant obstacles to accountability following a workplace injury.  Workers are already forced into a broken and inadequate comp system that severely limits their legal rights and oftentimes does not provide adequate benefits.  The Court’s decision today further restricts the ability of workers to be fully and promptly compensated for their injury.

Carrier calls Rutigger decision a win for employers

According to an Aug. 26 press release from Texas Mutual:

The Court reversed the Houston Court of Appeals and rendered judgment that Mr. Ruttiger take nothing on his Insurance Code and Texas Deceptive Trade Practices Act claims.

Justice Phil Johnson wrote in strong terms that a bad faith cause of action is inconsistent with the current workers’ compensation system.

“[If the plaintiff were to prevail, the precedent would build] additional costs into the system by increasing litigation expense to employees, insurers and employers,” Justice Johnson wrote. “The way the dispute was resolved after Ruttiger initiated the dispute resolution process is the way the Act is designed to function.”

The company’s position is further spelled out:

“The Texas Supreme Court has today given careful consideration to the many speedy remedies and protections that the Legislature has granted to injured workers,” Mary Barrow Nichols, General Counsel and Senior Vice President for Texas Mutual, said. “It found that permitting an injured worker to additionally recover with a lawsuit of this kind is inconsistent with these remedies and protections. This decision is a significant victory for Texas employers.”

Majority cites Legislature’s position in reform

A summary of the case at jdsupra.com sheds some light on what it terms a “ground-breaking decision.” First, pointing to one of the cases cited as basis to uphold the lower court’s finding (Aranda v. Ins. Co. of North America, 748 S.W.2d 210 [Tex. 1988]), the Supreme Court “majority would have overruled Aranda in section 5 of the opinion. Stating that “The [Workers Compensation] Act effectively eliminates the need for a judicially imposed cause of action outside the administrative processes and other remedies in the Act. Recognizing and respecting the Legislature’s prime position in enacting, studying, analyzing, and reforming the system, and its efforts in having done that, I conclude that Aranda should be overruled.” Aranda created a cause of action for breach of the duty of good faith and fair dealing between insurers and policyholders. Aranda itself was a workers compensation decision, and the cause of action has since expanded to other insurance policies in Texas.”

Adjuster conceded interviewing ‘only the employer’

The same account also adds some telling details of the original case: The “Ruttinger [case]  involved an investigation by a carrier that failed to follow what the adjuster admitted was a standard investigation. At trial, the adjuster admitted that he did not interview the claimant or his doctor, only the employer. The adjuster also admitted that he should have interviewed all three. The jury found that the carrier violated the Texas Insurance Code by failing to conduct a reasonable investigation. It also found a ‘knowing’ violation, leading to trebling of damages.”

Dissent also cites Legislature, saying it clearly intended to preserve limited GFFD claims

The Texas Watch piece includes some highlights of the dissent:

Chief Justice Jefferson (joined by Green and Lehrmann) dissented, noting precedent makes both Insurance Code and common law claims viable (AETNA Casualty & Surety Co. v. Marshall, 724 S.W.2d 770 (Tex. 1987), and Aranda v. Ins. Co. of North America, 748 S.W.2d 210 (Tex. 1988), respectively). After the Comp Act was overhauled in 1989, its express language clearly stated the Legislature’s intent to preserve limited GFFD claims. The Act is not an exclusive remedy with respect to carriers (see Tex. Labor Code §§ 408.001 & 416.001, et seq.). The Legislature, while aware of the cases cited above, did not override them, and nothing in the Comp Act overcame the Insurance Code’s plain language. Therefore, there is no reason to hold that Insurance Code claims are now precluded. The Legislature has not made the Comp Act exclusive with respect to extra-contractual claims, and the Court’s preemption is without merit.

So even the Chief Justice found no reason to block bad-faith finding. May not be a giant decision for employers per se, but it’s certainly huge win for insurance carriers. And it reinforces the need for “mere workers” to get representation as early as possible in a workers’ comp case that may need litigating.

We can help you find an attorney

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

We think it’s always instructive to follow workers’ comp fraud, regardless of whether it’s providers, carriers or claimants trying to pull a fast one.

In our first case for this edition, the person who got busted did not pull a fast one.

She pulled a slow one.

79-year-old pleads guilty

From a recent winner of a  Pulitzer prize, an Aug. 17 post of the Glens Falls Post-Star: “A 79-year-old Lake Luzerne woman who illegally collected $242,000 in worker’s compensation has pleaded guilty to a felony charge and been ordered to pay the money back.

“Anna R. Healey was sentenced to a three-year conditional discharge after her guilty plea to a misdemeanor charge of offering a false instrument for filing.”

Here’s the hook-line-sinker part, though–the authorities may be a tad late on ordering her to pay it back. Not only is she crowding 80 years-old but also the payments she apparently swindled date back to the late 1970s.

“The benefits were to be discontinued if she remarried, and investigators from the state Insurance Department sought a criminal investigation by the State Police after determining she had gotten married again.

“Healey illegally collected worker’s compensation payments for 30 years beginning in 1978.”

In other words, what are the chances that any given 79-year-old woman can come up with the dough to pay it back before she dies? True, from this one account we don’t know but what’s she’s now wealthy beyond measure.

But more likely the quick and dirty math takes over, which says she collected less than $700 a month during all that time. And most of us know where $700 a month goes in most householdds: utilities, food, and staples such as fuel and toilet paper.

Maybe it will turn out that she funded a trading account and became super-wealthy. If that’s the case, she should not only pay it back, but pay it back with penalties and interest–including charges against her estate.

Public oversight

But here’s the deal– the truly important thing involves public money. If one old lady got away with something, that’s one thing. Maybe she really needed it, but that’s a question for another topic.

The real question is this: Why did this  go undiscovered for so long? And, given the parameters, how many more similar cases are ongoing?

Shouldn’t we demand more and better of our public officials?

Ok, here’s another one.

This guy got popped for taking comp money as if he couldn’t work, but according to the sources he could indeed work. The totals involved don’t even approach Healey proportions but do involve jail time and maybe some different questions about the system.

Double dipping

According to an Aug. 18 post at claimsjournal.com, former truck driver Martin DaLaRosa was “was sentenced to brief jail time and ordered to repay $1,647 in benefits to Texas Mutual.”

One thing we notice here is the source is Texas Mutual.

Now that doesn’t mean it’s wrong. As alluded to earlier, there really are people who scam insurance companies. We know this.

In DeLaRosa’s case, the Denton, Texas, man “reported a job-related injury while working as a truck driver for Texas Environmental Management of [nearby] Justin, Texas. He claimed he was unable to work as a result of the injury, and Texas Mutual began paying income benefits to him.”

Subsequently, however, the insurance company “uncovered evidence that DeLaRosa was working as a car salesman for a Denton car dealership while receiving income benefits.”

See, the problem is not that DeLaRosa could no longer drive trucks. State law requires claimants to report when they resume employment, period. Otherwise claimants are said to be “double-dipping because the claimant collects benefits for being too injured to work when he or she is, in fact, gainfully employed.”

Insurance carriers like to point out that double-dipping costs all employers who carry workmen’s comp via across-the-board premium hikes. (Texas is the only state that doesn’t require employers to carry workmen’s comp insurance.)

The case underscores the need for competent legal counsel–not only to help claimants receive the benefits they deserve but also to make sure claimants do not run afoul of the law once benefits have been awarded.

Volunteer firefighters back in the news

The final case we’ll look at today is interesting for a different reason. Justin Fauer was a volunteer firefighter who died while trying to save his boss in a farming accident. As we’ve noted in a previous installment, volunteer firefighters can find themselves–and the communities they serve–mired in complex situations concerning workers comp coverage.

But Fauer’s case is also interesting because the parties at odds do not include either Fauer’s employer or his survivors but rather two insurance companies.

Fauer and his boss were working at a manure pit, according to an AP account in the Aug. 15 Chicago Tribune, at Johnson Valley Beef in 2005.

“Fauer’s boss, Dwight Johnson, climbed into a manure pit at Johnson Valley Beef to retrieve a chain that had fallen into the pit and was overcome by methane fumes, court records show.

“Fauer, a volunteer firefighter with Andover Volunteer Fire Department, ran to the house to tell Johnson’s wife to call 911 and then returned to the pit where he climbed in and was also overcome.

“A deputy workers compensation commissioner ruled that Fauer responded to the emergency as both a farm hand and a volunteer firefighter because some of the injuries that led to his death occurred after he would have been notified in his capacity as a firefighter.”

Grinnell versus Travelers

The carrier for the farm, Grinnell Mutual Reinsurance Company, paid on the Fauer claim but subsequently sought to have Travelers pay half, hence the importance of the commissioner’s ruling, which left Travelers–the workers comp carrier for the volunteer fire department–responsible for paying one-half the amount to Grinnell.

Then came the turnabout:

“Traveler’s appealed but the commissioner ruled the timing of the notice to Fauer’s pager ‘was not critical to the determination of coverage … because Justin has been summoned to duty as a volunteer firefighter by the circumstances themselves.’

“The commissioner determined that failure to allow volunteer firefighters to call themselves to duty would have the ‘absurd result of deterring them from immediately rendering assistance upon encountering an emergency.’ ”

Traveler’s sought a review by the court and a district court rejected the commissioner’s ruling. “It concluded a volunteer firefighter cannot be summoned to duty by circumstances, but can only be summoned by the fire department or some other official channel.”

An Aug. 19 piece in a Southwest Iowa news outlet picks up it from there:

A chilling effect on volunteer response?

“So, where does that leave the countless volunteer firefighters spread across southwest Iowa?

“ ‘It’s an interesting ruling,’ said Council Bluffs Fire Chief Alan Byers, himself a former volunteer firefighter.

“ ‘The expectation for firefighters, if you’re paid or a volunteer, is that if you come upon an accident or fire, you’ll help,’ Byers said. ‘What if you’re driving down the street and see smoke from a house? You call 911 and try to make a difference and get hurt or worse, die, there’s no workers compensation there. It’ll make firefighters think differently in those instances.

“ ‘If (volunteers) get hurt or worse and can’t get back to their day job, workers comp is all they have.’

“Byers said he’s seen the ruling generate discussion across the state on message boards, through e-mail and in discussions.

“ ‘I think a lot of people were saddened by the decision,’ he said.

“Both Byers and Jeff Theulen, the Pottawattamie County Emergency Management Coordinator, Treynor assistant fire chief and a 30-year volunteer firefighter, speculated that the state Legislature would examine the issue.”

It’s very sobering to realize how the actions of one or two individuals can effect change that potentially affects thousands of other people.

***********************************************************************************************************************
Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim