The Texas Supreme Court’s recent decision on rehearing in Texas Mutual Insurance Company v. Ruttiger resulted in a 5-4 decision overturning the long-standing duties owed to injured employees by their insurers, as set forth in Aranda v. Insurance Company of North America (1989).
The Ruttiger decision, which eliminates many areas of liability for insurers acting in bad faith toward injured employees, unfortunately represents another decision by the Texas Supreme Court that departs from established legal precedent and even the will of the Texas Legislature, which recognized bad faith liabilty in the Texas Labor Code and other legislation.
Although the Texas Supreme Court’s majority claims that the Texas workers’ compensation system was revised to regulate all aspects of claims by injured employees, Chief Justice Wallace B. Jefferson, in dissent, pointed out that it was not the role of the court to create new law, but instead must follow the will of the Legislature.
Doyle Raizner represented Timothy Ruttiger in the trial and appeal of his bad faith claim, and strongly believes that injured employees who are the victims of bad faith insurance activity should have the ability to seek recourse against their insurers. This is especially true where the system that is supposed to monitor and regulate insurers so frequently fails to adequately do so.