Liberty Mut. Fire Ins. Co. v. Crane, 09-93-296

• Decision Date: 11 May 1995
• Docket Number: No. 09-93-296,09-93-296
• Citation: 898 S.W.2d 944
• Parties: LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant, v. Donald CRANE, Appellee. CV.
• Court: Texas Court of Appeals

Page 944

898 S.W.2d 944

LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant, v. Donald CRANE, Appellee.

No. 09-93-296 CV.

Court of Appeals of Texas Beaumont.

Submitted Feb. 16, 1995.

Decided May 11, 1995.

Michael R. McGown, Michael K. Rose, Weller, Green, McGown & Toups, Beaumont, for appellant.

John H. Seale, Seale, Stover, Coffield & Bisbey, Jasper, for appellee.

Before WALKER, C.J., and BURGESS and STOVER, JJ.

OPINION

STOVER, Justice.

This is an appeal by appellant, Liberty Mutual Fire Insurance Company, of a judgment rendered against it for breach of a settlement agreement incorporated in a consent judgment in a Workers' Compensation case and for breach of its duty of good faith and fair dealing. After a trial on the merits, the jury found that appellant failed to provide medical treatment as provided for in the agreed judgment, and that appellant was consciously indifferent in failing to act fairly and in good faith. The jury assessed actual damages, attorney's fees, and punitive damages.

Background Facts

The plaintiff-appellee, Donald Crane, was injured on December 19, 1990, when a light fixture fell and struck him on the left side of his neck while he was working as a scaffold carpenter for Yeargin, Inc. at the Gulf States Utilities power plant in Bridge City, Texas. When he fell, appellee struck his hands on the grating on which he was working. Notice of Injury was filed with the Industrial Accident Board and, subsequently, a Workers' Compensation lawsuit was filed which alleged "injury to his head, neck, right shoulder and body generally." The appellee was treated by a doctor on the day of the accident and saw several other doctors thereafter for treatment of pain and injuries to the cervical spine.

On February 25, 1991, Liberty Mutual requested that the Texas Workers' Compensation Commission order an examination of appellee to be performed by Dr. Clark Gunderson of Lake Charles, Louisiana, an orthopedic specialist selected by Liberty Mutual. Dr. Gunderson first examined Crane on April 9, 1991, and had him hospitalized for a series of diagnostic tests. One of the diagnostic tests included a nerve conduction study that revealed evidence of a right carpal tunnel syndrome (CTS).

On May 5, 1991, Dr. Gunderson performed surgery on a ruptured disc in Crane's neck. In a letter to Liberty Mutual dated May 14, 1991, Dr. Gunderson discussed the surgery and noted "a mild carpal tunnel syndrome on the right." The history that Dr. Gunderson had previously elicited from the appellee included the information that appellee had begun to experience tingling and paresthesia (numbness) in his right hand at or shortly after the December 1990 accident and that appellee had never had that kind of problem before the accident.

In July 1991, Crane filed a Workers' Compensation lawsuit against appellant, which suit was settled on or about November 18, 1991. The trial court entered an agreed judgment on December 11, 1991. Under the express terms of the settlement agreement, Crane received $59,000 from the appellant and voluntarily relinquished his right to lifetime medical in lieu of an agreement that Liberty Mutual would be responsible for Crane's medical expenses "proximately caused by the industrial injury" for five years. The agreement also provided that medical care would be "under the direction and control of Dr. Clark A. Gunderson or a doctor mutually agreed upon by all parties."

Subsequent to the agreed judgment of December 11, 1991, Crane sought authorization from Liberty Mutual in January 1992 to pay for carpal tunnel surgery on his right wrist. Maintaining that the carpal tunnel syndrome (CTS) was not related to the December 1990 accident, Liberty Mutual denied Crane's request. According to Liberty Mutual, its position was confirmed by medical experts and by Crane's own notice of injury, which described the injury as being "injury to my head, neck and right shoulder."

Crane contends that Liberty Mutual breached the settlement agreement, since Dr. Gunderson on three separate occasions had stated that it was his opinion that the carpal tunnel syndrome was caused by the original injury and that surgery was necessary. Subsequent to appellant's failure to authorize payment for the carpal tunnel release procedure, appellee filed the instant lawsuit on March 31, 1992, alleging breach of the settlement agreement, breach of the duty of good faith and fair dealing, unfair and deceptive practices under Article 21.21 of the Insurance Code, and conscious indifference to appellee's rights. Appellee pled for recovery of three times the amount of his damages, for exemplary damages, and for reasonable attorney's fees.

Appellant's Points of Error One and Two

In Question No. 1, the jury was asked whether the defendant failed to provide plaintiff with medical treatment as contracted for in the November 18, 1991, settlement. To this question, the jury responded "yes." Appellant brings forth the complaint that there was no evidence, or, in the alternative, insufficient evidence to support the jury's finding. In response to Question 2, the jury found the damages from such failure to be $6,000.

In reviewing a "no evidence" point, we must consider only the evidence and inferences that support the jury's findings and we must disregard all evidence and inferences that do not support the jury's findings. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We must sustain a "no evidence" point when the record discloses one of the following: (1) evidence of a vital fact is completely absent; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. Juliette Fowler Homes, Inc. v. Welch Associates, 793 S.W.2d 660, 666 n. 9 (Tex.1990).

Where reversal is sought on the ground of insufficiency of evidence to support a jury finding or on the ground that the finding is against the great weight and preponderance of the evidence, these standards govern:

(a) The court of appeals must consider and weigh all of the evidence and should set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust;

(b) The court is not free to reweigh the evidence and set aside a jury verdict merely because the judges feel that a different result is more reasonable. The court may not substitute its thought processes for those of the jury; and,

(c) The court must be prepared to detail the evidence relevant to the issues under consideration and clearly state why the jury findings are factually insufficient or are so against the great weight and preponderance of the evidence as to be manifestly unjust, why the findings shock the conscience, or why the findings clearly demonstrate bias. The court must be able to state in what regard the contrary evidence greatly outweighs the evidence in support of the verdict.

Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex.1986); Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986); Dyson v. Olin Corp., 692 S.W.2d 456 (Tex.1985); Garza v. Alviar, 395 S.W.2d at 823; In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Appellant contends that it did not breach the provision of the settlement agreement in the Workers' Compensation case concerning medical treatment of Donald Crane, since Crane's carpal tunnel syndrome (CTS) was not related to the December 1990 injury. However, the record contains ample evidence that Crane had the condition of CTS, that the condition developed shortly after the accident, that he had never had it prior to the accident, and that the doctor chosen by the carrier found it to be related to the December 1990 injury. This information came from a variety of sources:

(1) Dr. Gunderson's report of April 9, 1991, to Liberty Mutual in which he stated that Crane had paresthesias (numbness) to his right hand;

(2) Dr. Gunderson's May 14, 1991, letter to Liberty Mutual in which Dr. Gunderson reports a mild CTS on the right;

(3) Three (3) nerve conduction tests (EMGs), each with positive findings of right CTS, which were performed at Dr. Gunderson's direction in 1991 and paid for by Liberty Mutual;

(4) Crane's deposition, taken on September 20, 1991, by Liberty Mutual's attorney in the Workers' Compensation case.

In summary, the evidence shows that by the time the contact came from Dr. Gunderson's office in February 1992 for authorization to perform carpal tunnel surgery on Crane, Liberty Mutual had already selected Dr. Gunderson in February 1991 as its doctor under Workers' Compensation Commission rules; had authorized and paid for surgery where Dr. Gunderson initially planned to operate on both Crane's neck and his wrist (for CTS); had authorized and paid for nerve conduction studies which showed the presence of CTS; had received testimony and reports tying the carpal tunnel syndrome to the original injury; and had agreed in the December 1991 consent judgment to "open medical" under the direction of Dr. Gunderson for five years.

In reference to the naming of Dr. Gunderson as the physician to determine the medical needs of appellee, the testimony of Ms. Lisa Gilbert, the adjuster who negotiated and approved the settlement agreement, becomes relevant:

Q Wasn't it a customary thing with Liberty Mutual and with claims that you were handling that when it came time to settle the case that if at all possible you tried to negotiate so that you would limit the medical to some particular doctor, as opposed to leaving it carte blanche as to any doctor? Wasn't that frequently done?

A Yes.

During the testimony of Ms. Gilbert, she admitted that the insurance company would not have approved treatment by other doctors if it hadn't been recommended or approved by Dr. Gunderson:

Q Okay. Now, if it's not a mutually agreed upon and...