Texas Mut. Ins. v. Ruttiger
| Decision Date | 22 June 2012 |
| Docket Number | No. 08-0751,08-0751 |
| Parties | TEXAS MUTUAL INSURANCE, COMPANY, PETITIONER, v. TIMOTHY J. RUTTIGER, RESPONDENT |
| Court | Texas Supreme Court |
CHIEF JUSTICE JEFFERSON, joined by JUSTICE MEDINA, JUSTICE GREEN, and JUSTICE LEHRMANN, dissenting.
Timothy Ruttiger allegedly sustained a work-related injury. Because of various complaints about how the Texas Mutual Insurance Company (TMIC) processed his workers' compensation claims, Ruttiger sued under the common law and chapters 541 and 542 of the Insurance Code, alleging that TMIC breached its duty of good faith and fair dealing.
TMIC and its amici ask us to hold that the Texas Workers' Compensation Act is the exclusive remedy for all work-related injuries, thus precluding Ruttiger's suit. We have previously concluded that both the Insurance Code and common law claims are viable—indeed, that they complement the workers' compensation system. Even after the 1989 overhaul, the Act's express language makes plain the Legislature's intent that common law bad faith claims remain available to litigants. As for Ruttiger's Insurance Code claims, the Code's language makes clear that they apply,and the Act's exclusivity provision does not apply to insurance carriers. Far from having precluded such claims, then, the Legislature has continued to recognize actions like Ruttiger's.
Today the Court holds that most of Ruttiger's Insurance Code claims (and, as a result, his dependent DTPA claims) are no longer viable. The Court also eliminates Ruttiger's common law good-faith-and-fair-dealing claim. The Court makes persuasive policy arguments to support its decision, replacing the Legislature's judgment with its own. I would hold that both claims survived the Legislature's 1989 workers' compensation overhaul and would affirm the court of appeals' judgment. Because the Court does otherwise, I respectfully dissent.
In 1987, we first considered whether a workers' compensation claimant could sue a carrier who engaged in a deceptive trade practice. AETNA Cas. & Sur. Co. v. Marshall, 724 S.W.2d 770 (Tex. 1987). Interpreting former article 21.21 of the Insurance Code, the predecessor to chapter 541, we said that claims under that article were not foreclosed by the existence of the workers' compensation system. Id. at 772. We held that the statute's text "provide[d] a cause of action to a person who has been injured by an insurance carrier who engage[d] in" a deceptive trade practice. Id. As to the carrier's arguments that the workers' compensation system barred the employee's claim, we held that the "mere fact that Marshall was injured while working should not be used as a shield" to preclude Marhall's recovery for the separate injury he suffered as the result of the carrier's deceptive practices. Id.
The next year, in Aranda v. Insurance Co. of North America, 748 S.W.2d 210 (Tex. 1988), we considered the more controversial question of whether an employee could sue a workers'compensation carrier for a breach of the common law duty of good faith and fair dealing. We held that such claims were viable. Id. at 215. Interpreting the former workers' compensation statute's exclusivity provision, we held that it "was not intended to shield compensation carriers from the entire field of tort law" and that it could not "be read as a bar to a claim that is not based on a job-related injury." Id. at 214. Expanding on this point, we emphasized that the workers' compensation statute was exclusive only as to job-related injuries, which are separate from injuries suffered as the result of a carrier's breach of duty:
Liability as a result of a carrier's breach of the duty of good faith and fair dealing or intentional misconduct in the processing of a compensation claim is distinct from the liability for the injury arising in the course of employment. Injury from the carrier's conduct arises out of the contractual relationship between the carrier and the employee and is sustained after the job-related injury.
Id. (emphasis added). "A claimant," we held, "is permitted to recover when he shows that the carrier's breach . . . is separate from the compensation claim and produced an independent injury." Id. We also concluded that the possibility of administrative penalties did not suggest that common law claims were precluded because the penalties did not afford relief from the particular injuries the claimant alleged. Id. at 215.
The Legislature overhauled our workers' compensation scheme in 1989. The Legislature examined the successes and failings of the previous system, commissioning a number of studies and reports to address what was driving the system's high cost. Several of these studies suggested legislative displeasure with Aranda, which was cited as a source of rising costs. One legislative report noted that "Texas law allows more cases to be adjudicated outside the scope of the workers'compensation law than laws of other states." JOINT SELECT COMMITTEE ON WORKERS' COMPENSATION INSURANCE, A REPORT TO THE 71ST LEGISLATURE 3 (Dec. 9, 1988). As such, the report suggested that the Legislature "[p]rovide that bad faith handling of claims is not grounds for a suit outside the workers' compensation act." Id. at 16. Another report addressed the issues raised by Marshall, suggesting that the Legislature "[e]liminate extra contractual liability resulting in treble damage suits under the Deceptive Trade Practices-Consumer Protection Act and the Unfair Claim Settlement Practices Act." HOUSE SELECT INTERIM COMMITTEE ON WORKERS' COMPENSATION INSURANCE, INTERIM REPORT TO THE 70TH LEGISLATURE 41 (Jan. 1987).1
The first draft of the new Act adopted the Joint Select Committee's recommendation that common law claims be precluded. The bill as introduced permitted an administrative penalty to be assessed against carriers for "malice or bad faith" in claims-processing, and it made clear that this penalty constituted "the employee's exclusive remedy against the employer or carrier" for such conduct. Tex. H.B. 1, 71st Leg., R.S., § 11.12 (1989) (emphasis added). However, the committee substitute removed that provision, opting instead for language that simply limited Aranda. Tex. C.S.H.B. 1, 71st Leg., R.S., §§ 10.41, 10.42 (1989). It was this limiting language that ultimately passed, with some changes, as part of the new Act. Texas Workers' Compensation Act, 71st Leg., 2d C.S., ch. 1, 1989 Tex. Gen. Laws 1 ).2
The Court's analysis of common law claims can only properly be considered in light of Aranda and with deference to the Legislature's express recognition, in chapter 416 of the Labor Code, that this avenue of relief endures. The Court asks whether the extra-contractual claims fit with the statutory scheme. This is the wrong inquiry entirely. The question presented in this case is whether the Legislature intended to abrogate entirely a common law bad faith remedy when it enacted the Workers' Compensation Act. Given the existence of chapter 416, it is impossible to conclude that the Legislature had such an intent.
We have repeatedly addressed situations in which common law claims and statutory remedies seem to overlap, and we have embraced a framework to guide our analysis in such cases. The touchstone of this analysis, as in all statutory interpretation, is legislative intent. We start with the proposition that statutes abrogating common law causes of action are disfavored. Cash Am. Int'l Inc. v. Bennett, 35 S.W.3d 12, 16 (Tex. 2000). A statute banishing a common law right "'will not be extended beyond its plain meaning or applied to cases not clearly within its purview.'"Id. (quoting Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex. 1969)). Abrogation by implication is disfavored. Id. For that reason, courts must examine whether the statute's language "indicate[s] clearly or plainly that the Legislature intended to replace" a common law claim with an exclusive statutory remedy, and we "decline[] to construe statutes to deprive citizens of common-law rights unless the Legislature clearly expressed that intent."3 Id.
We must decide, then, whether there is "clear legislative intent," Dealers Elec. Supply Co. v. Scoggin Constr. Co., 292 S.W.3d 650, 660 (Tex. 2009), to extinguish entirely this settled common law remedy. As amended by the Workers' Compensation Act, the Labor Code provides:
An action taken by an insurance carrier under an order of the commissioner or recommendations of a benefit review officer under Section 410.031, 410.032, or 410.033 may not be the basis of a cause of action against the insurance carrier for a breach of the duty of good faith and fair dealing.
TEX. LAB. CODE § 416.001 (emphasis added). The fact that certain bad faith claims are thereby eliminated requires the logical inference that others survive. Likewise, the Code's limits on exemplary damages "[i]n an action against an insurance carrier for a breach of the duty of good faith and fair dealing," id. § 416.002, implies that other damages remain available. In the context of our precedent, there is but one conclusion to be drawn from these provisions: the Legislature did not intend to abrogate the common law claims. To the contrary, the Legislature, in the clearest way possible, limited Aranda-type claims, rather than abolished them.4
The inquiry ends there. If the Legislature limited certain Aranda-type claims, it could not logically have also intended to eliminate all of them. The Act's structure further supports this conclusion.
The exclusivity provision of the new Act provides that "[r]ecovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage . . . against the employer . . . [for] a work-related injury sustained by the employee." TEX. LAB. CODE §...
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