Per Consumer Law Section of Texas State Bar:

The supreme court held that a workers’ compensation claimant cannot sue for unfair settlement practices under the Texas Insurance Code. Tex. Mut. Ins. Co. v. Ruttiger, No. 08-0751, 2011 WL 3796353, 54 Tex. Sup. Ct. J. 1642 (Aug. 26, 2011). Ruttiger was hurt on the job. The insurer denied the claim, contending he was really hurt in a softball game. Eventually, the parties settled, agreeing that his injury was work-related. Ruttiger sued the insurance company for unfair insurance practices, deceptive trade practices, and breach of the duty of good faith and fair dealing, and won at trial.

The supreme court agreed with the insurer that the Workers’ Compensation Act provides the exclusive remedy for unfair settlement practices. The court noted that in its prior decision in Aetna Cas. & Sur. Co. v. Marshall, 724 S.W.2d 770 (Tex. 1987), the court had rejected this very argument. But now the court concluded that the Workers’ Compensation Act had changed. The majority reasoned that when Marshall was decided the Workers’ Compensation Act provided no meaningful remedies and allowed de novo judicial review. In contrast, the Workers’ Compensation Act was substantially amended after that to provide detailed procedures for handling and paying claims and for resolving any disputes that arose. The court concluded that permitting a workers’ compensation claimant to also recover for unfair settlement practices under the Insurance Code would be inconsistent.