AUSTIN, Texas — A Texas appeals court has overturned a substantial jury award against Sentry Insurance, ruling that the claims brought by a permanently disabled worker were not valid under existing state law. The court determined that the claims, rooted in allegations of bad faith by the insurer, were barred based on a 2012 decision from the Texas Supreme Court.
In a ruling issued Wednesday by the 11th District Court of Appeals, the court clarified that Donald Bristow could not seek damages under the Texas Insurance Code or the common-law duty of good faith and fair dealing. The court cited significant reforms to the state’s workers’ compensation system that were enacted in 1991 as grounds for its decision, stating that the alleged misconduct occurred after these changes took effect.
Bristow was employed by Nunn Manufacturing Co. in 1990 when he sustained injuries that left him paraplegic. Following a prolonged dispute with Sentry Insurance regarding his workers’ compensation claim, a settlement was reached in 1993. Under this agreement, he was entitled to lifelong income payments and medical benefits, along with a provision for home health care costs amounting to $3,650 per month, contingent on his residing at home. However, the settlement allowed Sentry to contest his ongoing need for these services.
In 2020, Bristow initiated a claim against Sentry, alleging that the insurer acted in bad faith. He asserted that Sentry failed to pay medical expenses related to ulcers that he developed due to prolonged wheelchair use and sought to evade payment for necessary home health services.
Initially, a jury awarded Bristow a total of $750,000, which included $250,000 for mental anguish and an additional $500,000 in damages. The trial court subsequently held Sentry liable for this amount, along with $75,950 in attorney fees.
Sentry contested this verdict, pointing to the 2012 Supreme Court case, Texas Mutual Insurance Co. v. Ruttiger. This landmark ruling eliminated the viability of tort claims based on the duty of good faith in connection with workers injured after the reforms of the late 1980s and early 1990s.
The Supreme Court’s ruling in Ruttiger indicated that the amendments to the Workers’ Compensation Act introduced multiple enforcement mechanisms that negated the need for litigation outside the administrative framework established by the state.
This decision underscores the ongoing legal complexities surrounding workers’ compensation claims and the interpretation of bad faith in insurance practices. As legislative and judicial frameworks evolve, the implications for injured workers and their access to recourse remain a topic of considerable debate.
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