Court Opinion

ID: 9772440
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:17:49.88959+00
Date Added: 2024-06-11T07:31:44.422368
License: Public Domain

KILGARLIN, Justice.
We granted writ in this case principally to consider whether a cause of action exists against an insurance carrier under Tex.Ins. Code Ann. art. 21.21 (unfair insurance practices) when that carrier fails to comply with the terms of a worker’s compensation com*771promise settlement agreement. Of additional concern at the time we granted writ was whether an insurance carrier owes a duty of good faith and fair dealing to the compensation claimant in complying with the terms of the settlement agreement.
Based on jury findings that Aetna Casualty and Surety Company had represented to Robert Marshall that their agreed judgment contained medical benefits which it did not, and that such misrepresentation was a producing cause of $30,355 actual damages to Marshall, the trial court trebled the actual damages award and rendered a $91,065 judgment for Marshall. The trial court additionally awarded Marshall attorney’s fees of $19,000. The court of appeals affirmed the judgment of the trial court. 699 S.W.2d 896. We affirm the judgment of the court of appeals.
The jury had also found that Aetna’s handling of Marshall’s medical claims constituted a breach of its duty of good faith and fair dealing; that such breach amounted to a conscious indifference by Aetna of Marshall’s rights; and, that $50,000 should be assessed against Aetna as exemplary damages. These findings did not constitute a basis for the trial court’s judgment.
The facts are, briefly, that Marshall sustained an occupational injury to his back in 1976. Marshall filed his worker’s compensation claim, and after an award from the Industrial Accident Board and an appeal to the district court of Brazoria County, Mar-shall settled his claim with Aetna for $20,-000 and the payment by Aetna of all past medical expenses. Additionally, the settlement included a provision for payment by Aetna of future medical costs, as follows:
Any future medical aid, surgery, hospital services, nursing, chiropractic service, medicines and rehabilitation benefits for the injuries made the basis of this lawsuit, provided that such medical care and treatment is incurred within five (5) years from the date of this Judgment and rendered by or at the direction of a competent physician will be paid by the defendant, Aetna Casualty & Surety Company.
As required by the Worker’s Compensation Act, the settlement agreement was incorporated into a judgment, signed August 3, 1978, in which the district court of Brazoria County recited that the settlement agreement had been made known to the court, and that the court found such compromise settlement fair, just and reasonable, and approved same.
Almost immediately after the settlement, Marshall encountered difficulties with Aet-na in obtaining payment for his medical expenses. Evidence shows delays in payment of medical bills by Aetna varying from four to five months, up to seventeen months, as well as an outright refusal by Aetna to reimburse for some prescribed medication. At the time of the trial of this lawsuit, medical bills totalling $355 were still unpaid. Aetna’s adjuster even called one of Marshall’s doctors, stating that it would not pay Marshall’s current bills nor any future bills submitted by that doctor. Aetna refused to allow Marshall to attend a pain clinic recommended by one of his doctors. As a result of Aetna’s conduct, doctors of Marshall’s choice refused him further treatment, a hospital refused to discharge him, pharmacies refused him credit, and he was forced to borrow money from relatives to pay for medicine. Numerous phone calls and letters from Marshall’s attorney to Aetna’s attorney failed to improve the situation. Aetna claimed in defense that it had in its file a copy of a proposed judgment which would have given it the right to approve Marshall’s medical treatment, and that it mistakenly relied on that proposed judgment rather than the one actually rendered. Marshall offered evidence showing that Aetna had been repeatedly advised of its mistake.
Rather than file suit under the provisions of the Worker’s Compensation Act, Tex. Rev.Civ.Stat.Ann. art. 8307, § 5a, with its possibility of a 12% penalty provision for collection of the unpaid medical expenses, Marshall elected to sue under the Insurance Code with its provision for treble damages, alleging also a breach of a duty of good faith and fair dealing. The jury’s award of $355 was for the unpaid medical expenses. The $30,000 award was for past *772mental anguish. The jury awarded Mar-shall nothing for loss of credit standing.
Although we granted writ to consider the validity of a cause of action for the breach of the duty of good faith and fair dealing, it is unnecessary to resolve this issue in light of the judgments below. Marshall elected to take recovery based on the jury verdict so as to benefit from the treble damages provision of Tex.Ins.Code Ann. art. 21.21 (the provision for treble damages was amended in 1985), which produced a greater judgment than had Marshall elected to accept recovery for actual and punitive damages under the good faith and fair dealing violation.
Section 16 of article 21.21 makes actionable any violation of Tex.Bus. & Com.Code Ann. § 17.46. Marshall alleged that Aetna violated section 17.46 by representing to him that it would provide benefits by the agreement and then failing to do so. Aetna argues that Marshall cannot recover under that statute because he is not a consumer of goods or services and because a court judgment is not an insurance policy. Article 21.21 does not incorporate the entire Deceptive Trade Practices Act which would require proof that Mar-shall was a consumer of goods or services. Instead, article 21.21 provides a cause of action to a person who has been injured by an insurance carrier who engages in an act proscribed by section 17.46.
Aetna’s contention that a judgment is not an insurance policy is likewise irrelevant. The question is simply whether Aetna engaged in conduct prohibited by section 17.46. The jury found that Aetna misrepresented the medical benefits that it would pay under the agreed judgment. The terms of the agreement called for Aet-na to pay Marshall’s medical bills incurred because of his back injury, while Aetna represented to Marshall that it had the right to pay only the bills from doctors whom they approved.
Aetna does not challenge the legal sufficiency of those findings which placed their conduct squarely within the prohibition of section 17.46(b)(5). Misrepresentations as to coverage and benefits are precisely the sort of conduct which gives rise to a section 17.46 cause of action. Royal Globe Ins. Co. v. Bar Consultants, 577 S.W.2d 688 (Tex.1979).
Aetna’s next argument is that Mar-shall’s cause of action was limited under the Worker’s Compensation Act to a suit to collect the $355 unpaid medical expenses and the 12% penalty. Of course, Marshall could have sought those statutory penalties, but he is not limited to that remedy. As noted earlier, section 16 of article 21.21 provides that a person who has sustained actual damages as a result of another’s deceptive acts or practices may maintain a suit for treble damages. The mere fact that Marshall was injured while working should not be used as a shield by Aetna to escape the punitive provisions of article 21.21.
Aetna’s final argument is that Mar-shall was required to first submit his dispute to the Industrial Accident Board pursuant to Tex.Rev.Civ.Stat.Ann. art 8307, § 12b (Vernon Supp.1986). That statute did not become effective until August 29, 1983, four years after Marshall sued Aet-na, and thus cannot be controlling.
We affirm the judgment of the court of appeals.
GONZALEZ, J., dissents.