Stinson v. Insurance Co. of Pennsylvania

• Decision Date: 30 April 2009
• Docket Number: No. 14-07-00698-CV.,14-07-00698-CV.
• Citation: 286 S.W.3d 77
• Parties: Sue Ann STINSON, Appellant, v. The INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Gallagher Bassett Services, Inc., and Belinda Ybarra, Appellees.
• Court: Texas Court of Appeals

286 S.W.3d 77

Sue Ann STINSON, Appellant, v. The INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Gallagher Bassett Services, Inc., and Belinda Ybarra, Appellees.

No. 14-07-00698-CV.

Court of Appeals of Texas, Houston (14th Dist.).

April 30, 2009.

Byron C. Keeling, Keeling & Downes, P.C., Houston, for appellant.

Matthew Sean Parish, Houston, for appellees.

Panel consists of Justices YATES, SEYMORE, and BOYCE.

SUBSTITUTE OPINION

WILLIAM J. BOYCE, Justice.

Appellees' motion for rehearing is overruled. The opinion issued on March 24, 2009 is withdrawn. This opinion is issued as the substitute.

Appellant Sue Ann Stinson challenges the dismissal of her suit asserting extra-contractual claims against appellees the Insurance Company of the State of Pennsylvania, Gallagher Bassett Services, Inc., and Belinda Ybarra. Stinson contends the trial court erred in dismissing her suit for want of jurisdiction based on an asserted failure to exhaust available administrative remedies. We reverse and remand.

Background

Stinson was working as a flight attendant on December 16, 2003 during a Continental Airlines flight from Los Angeles to Honolulu. She fell backwards, hit her tailbone and head, and briefly lost consciousness when the aircraft came to an abrupt stop as it was taxiing for departure from Los Angeles. The flight continued as scheduled, and Stinson was examined upon arrival in Honolulu by a doctor who diagnosed her injury as a concussion and cervical strain.

Stinson returned home to Spring, Texas, and was examined by Dr. Robert Turner. He ordered Stinson not to work until January 1, 2004. Dr. Turner believed that Stinson's injuries would resolve themselves without treatment, and that she would reach maximum medical improvement by February 1, 2004.

Continental reported Stinson's injury to Gallagher Bassett, a third-party administrator for Continental's workers' compensation carrier, the Insurance Company of the State of Pennsylvania. Gallagher Bassett initially assigned adjuster Denise Anderson to investigate Stinson's claim; it later transferred the claim to adjuster Belinda Ybarra. The insurance carrier paid Stinson temporary income benefits for her two-week absence from work.

Stinson began experiencing dizziness, numbness, and pain shortly after she returned to work in January 2004. Stinson met with Dr. Turner again and he referred her to a chiropractor, Dr. Glenn Helton, who began treating her in January 2004. Over the next several weeks, Dr. Helton advised Stinson to ask Dr. Turner to perform certain diagnostic tests and treatment. Dr. Turner refused these requests.

In late April 2004, Stinson asked to change her treating physician of record from Dr. Turner to Dr. Helton. In May 2004, Dr. Helton ordered Stinson not to work. Once Stinson began this absence from work, the insurance carrier began paying temporary income benefits to her. Stinson underwent X-rays and an MRI exam in May 2004, which revealed cervical spondylosis, cervical disc protrusions, stenosis and annular tear, and lumbar disc protrusions.

In a letter dated June 15, 2004, Stinson was informed that adjuster Ybarra had asked Dr. Zvi Kalisky to perform an independent medical examination of Stinson scheduled for July 1, 2004.

On June 30, 2004, neurologist Dr. David Tomaszek reviewed Stinson's MRI results and examined her. Dr. Tomaszek wrote a report on the same date in which he (1) observed that Stinson had not achieved significant improvement in the six months since her injury; and (2) recommended that Stinson undergo treatment including physical therapy. His report states: "I have spoken to Dr. Helton by phone, and he has agreed to carry out a cervical flexion/distraction regimen over the next couple of weeks. I have also put this woman on a Medrol 6 day Dosepak and will see her back in mid July." The report continues: "Should her symptoms not improve, I would recommend transforminal epidural blocks at C4-5 and C5-6 on the right side...." The report further states: "Under the most drastic circumstances of continued symptomatology ... discography at C4-5, C5-6, and C6-7 could be done ... and if necessary ... an anterior cervical discectomy and fusion could be considered."

Dr. Helton testified at his deposition that cervical flexion and distraction is a form of physical therapy. The Workers' Compensation Act requires preauthorization for physical therapy treatments. See Tex. Lab.Code Ann. § 413.014(c)(4) (Vernon 2006). Dr. Helton testified that he and Dr. Tomaszek requested preauthorization for the recommended physical therapy. Dr. Helton also testified that he faxed a copy of Dr. Tomaszek's June 30, 2004 report to Gallagher Bassett.

After conducting an independent medical examination of Stinson on July 1, 2004, Dr. Kalisky wrote a report in which he disagreed with Dr. Tomaszek's recommendation for Stinson to receive physical therapy. Dr. Kalisky opined in his July 1, 2004 report that "[n]o further treatment is recommended other than a home-based exercise program." Dr. Kalisky described Stinson's status as "post contusion/strain to the cervical and lumbar spine superimposed on age-related cervical and lumbar degenerative spondylosis. The disk protrusions noted on MRI of the cervical and lumbar spine probably reflect preexisting degenerative disk disease."

Gallagher Bassett sent a first notice of claim dispute and refusal to pay benefits to Stinson on July 21, 2004. This first notice states: "Carrier disputes the cervical and lumbar degenerative spondylosis as pre-existing and/or an ordinary disease of life." The July 21, 2004 notice does not address or reference the medical necessity of physical therapy. The insurance carrier continued to pay Stinson temporary income benefits after July 21, 2004.

Based on the July 21, 2004 notice of claim dispute, Stinson requested a benefit review conference with the Texas Workers' Compensation Commission ("TWCC").¹ The TWCC selected Dr. Becky Personett as a designated neutral physician to determine whether Stinson had reached maximum medical improvement from her injury. On August 24, 2004, Dr. Personett examined Stinson and concluded that she had not reached maximum medical improvement.

The TWCC also arranged for Stinson to see an orthopedic surgeon, Dr. Richard Larrey, for an independent medical exam to determine whether Stinson's December 16, 2003 fall caused her lumbar and cervical problems, and whether Dr. Tomaszek's recommended physical therapy was medically necessary. Dr. Larrey examined Stinson on September 20, 2004 and reported to Ybarra that Stinson's injuries from her fall should have resolved already, and that the requested physical therapy was not medically necessary.

Gallagher Bassett sent a second "Notice of Disputed Issue(s) and Refusal to Pay Benefits" to Stinson on September 23, 2004. This second notice states: "Based on Commission selected RME there is no medical necessity for chiropractic treatment, medications other than over the counter NSAIDS, physical therapy, injection treatment, pain management treatment, surgical treatment or further diagnostic imaging." This second notice does not address or reference compensability. The record contains no written communication by Gallagher Bassett to Stinson before this time denying the physical therapy recommended by Dr. Tomaszek as being medically unnecessary.

Gallagher Bassett sent a third "Notice of Disputed Issue(s) and Refusal to Pay Benefits" to Stinson on October 19, 2004. This third notice states: "Carrier disputes that the compensable injury extends to and includes cervical disc protrusions and/or herniations, cervical radiculopathy, lumbar disc protrusions and/or herniations and lumbar radiculopathy." This third notice does not address or reference the medical necessity of physical therapy.

Dr. Personett conducted a second examination of Stinson on January 11, 2005 and disputed the conclusions of Drs. Kalisky and Larrey. Dr. Personett again reported that Stinson had not reached maximum medical improvement, and opined that Stinson had "compensable injuries involving the concussion, the cervical spine, and the lumbar spine that have made a definite difference in her life since the moment of the injury."

In February 2005, the insurance carrier approved and began paying medical benefits for physical therapy.²

On May 4, 2005, the TWCC conducted a non-binding benefit review conference. The disputed issue at the benefit review conference is listed in the TWCC's report as follows: "Does the 12/16/03 compensable injury extend to and include cervical disc protrusions and/or herniations, cervical radiculopathy, cervical degenerative spondylosis, lumbar disc protrusions and/or herniations, lumbar radiculopathy, and lumbar degenerative spondylosis?" The TWCC adopted Stinson's position and answered this question in the affirmative. Gallagher Bassett rejected the TWCC's recommendation from the benefit review conference.

On June 15, 2005, the TWCC held a benefit contested case hearing to decide the compensability issue addressed at the May 4 benefit review conference. The TWCC decided the contested case hearing on compensability in Stinson's favor in conformity with the earlier benefit review conference. The TWCC signed an order on June 22, 2005 requiring the insurance carrier "to pay benefits in accordance with this decision." Gallagher Bassett did not further challenge this order regarding compensability.

Stinson sued the insurance carrier, Gallagher Bassett, and Ybarra in Harris County district court on November 14, 2005. Stinson's original petition lists four causes of action: (1) violations of the Texas Insurance Code; (2) breach of the common law duty of good faith and fair dealing; (3) legal malice; and (4) violations of the Texas Deceptive Trade Practices Act ("DTPA"). Stinson seeks actual damages including "the consequential damages to her economic welfare from the wrongful denial and delay of benefits; the mental anguish...