Robert Bean v. Texas Mutual Insurance Company, Phillip W. Smith and Debbie K. Garrett

• Court: Court of Appeals of Texas
• Decided: November 8, 2012
• Docket: 09-11-00123-CV
• Status: Published

Opinion

In The

Court of Appeals Ninth District of Texas at Beaumont _________________ NO. 09-11-00123-CV _________________

ROBERT BEAN, Appellant

V.

TEXAS MUTUAL INSURANCE COMPANY, PHILLIP W. SMITH AND DEBBIE K. GARRETT, Appellees

________________________________________________________________________

On Appeal from the 75th District Court Liberty County, Texas Trial Cause No. CV1003164 ________________________________________________________________________

MEMORANDUM OPINION

Robert Bean appeals from the trial court’s decision to dismiss his suit against the

defendants in a case in which he alleged that the defendants had mishandled his worker’s

compensation claim. Recent caselaw prevents Bean from pursuing his common law and

statutory bad faith claims arising from the handling of a worker’s compensation insurance

claim. See Tex. Mut. Ins. Co. v. Ruttiger, No. 08-0751, 2012 WL 2361697, at *13, 19

(Tex. June 22, 2012). We affirm the trial court’s order dismissing Bean’s case.

1 Robert Bean sued Texas Mutual Insurance Company and two of its adjusters,

Phillip W. Smith and Debbie K. Garrett, for damages arising from allegedly wrongful

acts in handling his worker’s compensation claim. The defendants moved to dismiss

Bean’s claims, arguing that he had failed to exhaust his administrative remedies. The trial

court dismissed Bean’s case, and Bean perfected an appeal.

While Bean’s case was on appeal, the Texas Supreme Court held that a worker’s

compensation claimant has no cause of action against the compensation insurer under the

Insurance Code for unfair settlement practices, overruling two prior opinions to the

contrary. It also held that a claimant cannot assert a common law claim against the

worker’s compensation insurer based on an allegation claiming the insurer had breached

its duty of good faith and fair dealing. See Ruttiger, 2012 WL 2361697, at *13, 19

(overruling Aetna Cas. and Sur. Co. v. Marshall, 724 S.W.2d 770 (Tex. 1987), and

Aranda v. Ins. Co. of N. Am., 748 S.W.2d 210, 212-13 (Tex. 1988)). In Ruttiger, the

Supreme Court held that the administrative dispute resolution process provided by the

Workers’ Compensation Act is the sole remedy available to address a covered

employee’s claim which arises from an on-the-job injury; consequently, the worker who

has a compensation claim remedy cannot assert an action against the compensation

carrier under sections 542.003 and 541.060 of the Texas Insurance Code or the Texas

Deceptive Trade Practices-Consumer Protection Act. Ruttiger, 2012 WL 2361697, at

*12-14; see Tex. Ins. Code Ann. §§ 541.060, 542.003 (West 2009); Tex. Bus. & Comm.

2 Code Ann. §§ 17.41-.63 (West 2011 & Supp. 2012). The Ruttiger Court also concluded

that a covered worker may seek to recover damages under section 541.061 of the Texas

Insurance Code, but only for a claim alleging that the terms of the compensation policy

were misrepresented. See Ruttiger, 2012 WL 2361697, at *13; see also Tex. Ins. Code

Ann. § 541.061 (West 2009).

Bean’s lawsuit concerns the claims handling process; Bean did not claim that the

terms of the insurance policy covering his employer had been misrepresented to his

employer. See Tex. Ins. Code Ann. § 541.061 (providing that it is an unfair method of

competition or deceptive act or practice to misrepresent an insurance policy); see also

Tex. Mut. Ins. Co. v. Morris, No. 09-0495, 2012 WL 5275467, at *3 (Tex. Oct. 26, 2012).

In summary, Bean’s claims are within the exclusive jurisdiction of the Texas Department

of Insurance. See Ruttiger, 2012 WL 2361697, at *12-14.

In the trial court, the defendants argued that Bean had failed to exhaust his

administrative remedies. The defendants presented the issue before the trial court as one

of exhaustion of remedies. Whether Bean exhausted his remedies, however, is subsumed

within the larger issue subsequently decided by the Supreme Court in Ruttiger: whether

the administrative agency’s jurisdiction is exclusive. The judicial doctrine of exhaustion

of remedies is part and parcel of the exclusive jurisdiction granted to an agency by

statute. See In re Entergy Corp., 142 S.W.3d 316, 321-22 (Tex. 2004). An agency’s

3 exclusive jurisdiction affects the trial court’s subject matter jurisdiction. Id.; Subaru of

Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002).

Whether an agency has exclusive jurisdiction is a question of law we review de

novo. Entergy Corp., 142 S.W.3d at 322. Here, the Workers’ Compensation Act provides

the exclusive remedy for Bean’s claim for compensation benefits. With respect to Bean’s

lawsuit, which alleges statutory and common law claims, a judicial remedy is not

available. See Ruttiger, 2012 WL 2361697, at *12-19. As a result, we must dismiss

Bean’s suit because the trial court was without jurisdiction to hear it.

After the Texas Supreme Court issued its opinion on rehearing in Ruttiger, we

invited the parties to submit briefs arguing the effect of Ruttiger on these proceedings.

We provided an opportunity for Bean to reply, and asked that he identify a claim that he

could assert on remand if we allowed him to replead. Bean did not respond to our request.

In light of the Supreme Court’s decision in Ruttiger, we affirm the trial court’s order

dismissing Bean’s case.

AFFIRMED. ________________________________ HOLLIS HORTON Justice

Submitted on October 8, 2012 Opinion Delivered November 8, 2012 Before Gaultney, Kreger, and Horton, JJ.