Court cites care law in vacating jury award for alleged bad faith

A Texas appeals court overturned a $750,000 jury award against Sentry Insurance, finding that a permanently disabled worker’s bad-faith claims were barred by a 2012 state Supreme Court decision.

The 11th District Court of Appeals ruled Wednesday that Donald Bristow could not recover damages under the Texas Insurance Code or the common-law duty of good faith and fair dealing because the alleged misconduct occurred after sweeping changes to the state’s work comp system took effect in 1991.

Mr. Bristow worked for Nunn Manufacturing Co. in 1990 when he suffered injuries that left him paraplegic. A dispute arose after Sentry Insurance responded to the claim, which was resolved with a settlement entered in 1993. The settlement entitled Mr. Bristow to lifetime income payments and medical benefits. Additionally, Sentry agreed to pay $3,650 per month for home health care as long as he resided at his home residence. The settlement also allowed the carrier to challenge his continuing need for home health services, according to Sentry Insurance v. Donald Bristow.

After a series of disputes, Mr. Bristow in 2020 asserted a claim against Sentry, alleging that the carrier engaged in bad-faith acts that caused damages by not paying medical bills for ulcers he developed as a result of his wheelchair use and attempting to avoid payments for home health services.

In April 2022 a jury awarded him $250,000 in damages for mental anguish and $500,000 in additional damages. The trial court rendered judgment against Sentry for $750,000 plus $75,950 in attorney fees.

Sentry appealed, arguing in part that Mr. Bristow’s claims were barred under 2012’s Texas Mutual Insurance Co. v. Ruttiger, which disallowed tort claims over the duty of good faith to injured workers.

Ruttiger found that causes of action for unfair settlement practices and breach of the duty of good faith and fair dealing were not available to injured workers injured after sweeping reforms adopted in 1989 took effect in 1991.

The Supreme Court of Texas in Ruttiger said the 1989 amendments to the Workers’ Compensation Act created multiple penalty and sanction provisions to enforce compliance that “effectively eliminates the need for a judicially imposed cause of action outside the administrative processes.”

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