Court Opinion

ID: 9759912
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:32:44.645257+00
Date Added: 2024-06-11T07:29:06.136788
License: Public Domain

NOBVELL, Justice,
dissenting.
Considering that a notice of appeal from the Board’s award had been given by respondent, it seems that he should have notified the insurance carrier of his subsequent decision to aban*86don the appeal and abide by the award. This for the reason that Article 8307, Sec. 5a, Vernon’s Ann. Texas Stats., is highly penal in nature, and has for its purpose the punishment of an insurer for an inexcusable refusal to pay an award. Maryland Casualty Co. v. Lewis, 151 Texas 480, 252 S.W. 2d 155. It is not designed to provide windfalls as a reward for procedural vigilence or the lack thereof. The trial judge found that “the only reason why the Travelers Insurance Company did not commence the payment of benefits to Hill, in accordance with the award of the Industrial Accident Board, was because they received and relied upon a notice of intention to appeal from the award of the Industrial Accident Board mailed, prepared and filed by counsel for plaintiff.”
The record clearly indicates that had the insurance company known that the award was due and payable, that is, that respondent had abandoned his appeal, payment would have been forthcoming. Even before the Board had taken action the carrier had admitted liability and offered to settle the claim by paying $4,000 in addition to the weekly payments theretofore made to respondent. It is likewise apparent that respondent did not notify the carrier that he had abandoned his appeal because he hoped that the insurance company would overlook this circumstance, and thus allow him to mature the award and collect a penalty and attorney’s fees. While the decision of this case should not rest upon such factors as hopes and emotional attitudes, the facts of this case point up a situation that is not conducive to open and above-board dealings, to say the least. In ordinary business transactions when a person takes a certain action which will place another within his debt, he is generally expected to notify such party of his action. There is no reason why this usual standard of business conduct should not be applied in the present case. The last word the carrier had from Hill was that he, Hill, intended to sue in the district court and not abide by the award of the Industrial Accident Board. Before saddling the carrier with a penalty, it seems fair and equitable to require Hill to make known his change in position and the fact that he had decided to abide with the decision of the Board.
It is Hill’s position that the insurance carrier should have maintained a “cat at the rat hole” type of vigilance in order to avoid a penalty. It is argued that the carrier knew that Hill must file suit in the district court within twenty days after the filing of notice that he would not consent to abide by the final ruling of the Industrial Accident Board and therefore shortly after March 2 the insurance company, as it had not been served with *87citation in a district court suit, should have known that Hill had changed his mind and thereupon should have started paying him the installments awarded by the Board. It would seem much simpler and more in accordance with usual business dealings if the one changing his mind would notify the other party of that fact so that the contractual obligations incident to such change of mind could be promptly carried out.
The punitive liability of the statute under the facts of this case has been visited upon the insurance carrier, not as a result of a willful or wrongful refusal to perform, but upon a mere inadvertance which resulted in a failure to ascertain the intentions of a party who in good faith and conscience should have made his intentions clearly known.
Article 8307, Sec. 5a provides for a penalty, Maryland Casualty Co. v. Lewis, 151 Texas 480, 252 S.W. 2d 155, and hence ■should be strictly construed. 50 Am. Jur. 432, Statutes Sec. 408. The Legislature sought to secure the prompt payment of insurance claims by providing a penalty for an inexcusable delay. However, it is not necessary in order to serve the statutory purpose to impose a penalty for nonaction which is in no sense willful and could have been wholly avoided by making a simple demand for payment. When a fair construction will accomplish the legislative purpose, a harsh construction should be avoided.
We are unable to agree with the Court of Civil Appeals that respondent’s giving notice of appeal from the action of the Industrial Accident Board does not distinguish this case from Minor v. London Guarantee & Accident Co., Texas Com., 280 S.W. 163; Dixon v. United States Fidelity & Guaranty Co., 293 S.W. 291, wr. dis., and Employers’ Insurance Ass’n. v. Harrington, Texas Civ. App., 61 S.W. 2d 167. In all three of these cases cited, it clearly appears that neither the injured employee nor the insurance carrier gave notice of an intention not to abide by the award. Accordingly, there was no action taken by the claimant which could have misled the carrier in any way. These cases are authority only for the narrow proposition that when neither side gives notice of appeal, the award of the Industrial Accident Board becomes final when the time for giving notice of appeal expires and hence a failure of the carrier to promptly abide by such award and make payments in accordance therewith constitutes a basis for maturing the award under the provisions of Article 8307, Sec. 5a.
*88I respectfully dissent from the order of the Court which affirms the judgments of the courts below.
ASSOCIATE JUSTICES CULVER, WALKER and HAMILTON join in this dissent.
Opinion delivered November 22, 1961.