The 1917 workers compensation law provided the basic framework for the Texas Workers’ Compensation system for the next seven decades. In 1989, after much debate, a new Texas Workers’ Compensation law was enacted, becoming effective during 1991. Provisions of this law formulated specific billing and reporting requirements for physicians treating injured workers and enacted a new income benefit and administrative dispute systems. During the 2001 Texas legislative session, lawmakers passed House Bill 2600 (HB 2600), which again significantly changed the delivery of health care and workers compensation benefits to injured Texas workers. Since that time, the changes have just kept coming.
Texas, unlike other states, does not require an employer to have workers’ compensation coverage. The Texas system of workers’ compensation is essentially elective, meaning that employers can choose between providing worker’s compensation coverage to its employees or being subject to a civil lawsuit in the event of an employee’s death or injury by opting to be a non-subscriber. Workers’ compensation insurance may be provided through a private insurance company or employers may self-insure.
Because Texas workers compensation law is ever evolving, and due to the rapid changes in the current business climate, the below links are often useful to consult on a regular basis to make sure the latest information is at your finger tips:
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas workers’ compensation defense attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
When the insurance carriers we defend need to assert their subrogation rights, we often find that it is helpful, and sometimes necessary, to inform the affected parties on the legal basis, the rationale, and the validity of our subrogation rights. Subrogation is the substitution of one party in the place of another for the purpose of asserting a lawful claim, demand, or right. This allows the substituting party to succeed to the rights of the other in relation to the debt or claim, and its rights and remedies.
There are generally two types of subrogation in Texas, as in other states. These can be categorized as equitable subrogation and contractual subrogation. Equitable subrogation arises by operation of law, while contractual subrogation is a result of a contract. Equitable subrogation is also termed legal subrogation, while conventional subrogation is another term for contractual subrogation.
Equitable subrogation takes place, automatically, as a matter of equity, with or without an agreement. The purpose of equitable subrogation is to force the ultimate payment of a debt by the party who, in fairness and good conscience, should pay be the one obligated to actually pay the debt. It is recognized by Texas courts as a method for the parties to avoid undue enrichment, windfalls and injustices that would otherwise occur.
There are other uses for the principle of subrogation, but it is typically recognized by the general public as an action initiated by an insurance carrier. For example, when an auto insurer pays its customer for a loss or injuries in a motor vehicle accident that is not the customer’s responsibility; the insurer will then want to pursue the party that was responsible for the accident. This means that often another insurance company is involved, as the first insurer attempts to recover the payments it made to its customer. While sometimes seen by the public as a “money grab” by one insurance carrier from another, or from a poor uninsured soul, subrogation has a huge benefit for the public at large. When insurance companies recover money they have paid on an insurance claim from a third party, it helps keep insurance premiums down.
We are frequently asked if our insurance carriers can subrogate personal injury protection (PIP) and MedPay. In Texas, minimum liability coverage, as well as PIP are mandatory. On the other hand, MedPay, or medical payments coverage, is not mandatory here. An individual may reject PIP coverage, but this must be physically signed away by the policyholder. Further, the absence of PIP coverage must be supplemented elsewhere. The two coverages are very similar in that they provide for medical bills incurred due to an accident. Both coverages will pay out regardless of who was at fault in the incident or accident. PIP coverage pays for lost wages an individual incurs while off of work. Med-Pay will not cover lost time from work. It is Med-Pay that is subject to subrogation in Texas. PIP is not subject to subrogation, under the Texas Insurance Code. If an individual is involved in a motor vehicle accident, his PIP insurance will pay the individual for his damages or injuries regardless of fault, but his insurance company will not be able to pursue the other person’s insurance company for reimbursement. Because PIP is not subject to subrogation in Texas, an individual can receive money from his PIP insurance carrier and the opposing party’s insurance carrier without being obligated to return the PIP payments.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas subrogation lawyers in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
Always the rebel, The State of Texas likes to set itself apart when it comes to calculating mechanic’s lien deadlines. Most states calculate dates from a specific date and based on a specific number of days. In Texas, the lien period is described as “on the 15th day of the month three months after the last month the claimant performs work”. (Three months for residential, four for non-residential) The deadline to file a lien is not extended if the 15th falls on a Saturday, Sunday, or legal holiday. Accordingly, if the deadline falls on one of these days, you still have to file the lien affidavit on the preceding business day or else it is going to be late. Also, a mechanics lien affidavit must be filedon or before the 15th of the month. An affidavit that is sitting on a clerk’s desk unfiled or is still “in the mail” is not considered a “filed” affidavit under the statute.
Remember that the mechanics lien affidavit must be filed with the county clerk’s office in the county where the property is located, not in some other county, such as in the county where the principal office of the recipient lies or in a county of residence, if different from the actual location of the property.
And don’t forget you’re notices, which is a whole separate chart. Remember that original contractors do not have lien notice requirements in Texas.
Work Last Residential Liens Non-Residential State Liens
Performed In Deadline Liens Deadline Deadline
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas construction law attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
The Texas trucking industry is highly regulated. Safety measures used by the trucking industry have improved greatly in recent years. The Federal Motor Carrier Safety Regulationsand the Texas Transportation Code are the starting points for much of the 18 wheeler accident litigation that takes place here in our Texas courts. As insurance defense lawyers who defend trucking accident cases on behalf of insurance companies and trucking companies, we have seen numerous attempts by Plaintiffs lawyers to utilize many of the regulations below in an attempt to establish the negligence of the truck driver, the trucking company or both. The breadth of these regulations is large and beyond the broad scope of the entire list of regulations that apply to the trucking industry in general, however some of the key items that trucking companies must be aware of are below:
FEDERAL MOTOR CARRIER SAFETY REGULATIONS: PART 382 – Controlled Substances and Alcohol Use and Testing –Describes how and when a truck driver should be tested for illegal substances before during and after an accident involving a commercial vehicle.
PART 383 – Commercial Driver’s License Standards – Determines if the driver of a commercial vehicle was qualified to operate the vehicle in use at the time of the accident.
PART 387 – Minimum Levels of Financial Responsibility for Motor Carriers – Establishes the amount and nature of insurance requirements
PART 399 – Employee Safety and Health Standards – Determines if safety and health precautions were taken by the truck driver and the trucking company to keep the roads safe.
PART 397 – Transportation of Hazardous Materials – Determines if any other health risks to the public at large as well as the injured party are present .
TEXAS TRANSPORTATION CODE: 644.152 and 644.052 – Safety Standards – Outlines the safety requirements that must be followed when using a commercial vehicle.
522.101-106 – Alcohol and Drug Use – Describes the methods used to insure that truck drivers are not intoxicated while traveling the roadways in Texas.
545.062 – Following Distance – Following too closely is frequently an alleged contributing cause to a collision and is the subject of a great deal of litigation. It is usually fairly argued by Plaintiffs’ lawyers that 18 wheelers in particular are more difficult to maneuver than automobiles. Great care should be taken by our trucking company clients to train their drivers thoroughly regarding safe stopping and safe following distances.
545.351 – Maximum Speed Requirement – this section is one that Plaintiff attorneys use often to try to prove that a collision was caused by a speeding tractor trailer rig driver. The truth is that frequently it is the cars and other vehicles around our drivers that present the greater danger to the public roads. Most trucking companies, and certainly the ones we represent, do not tolerate speeding by their drivers. Again, the utmost effort should be taken by our trucking company clients to train their drivers thoroughly regarding safe stopping and safe following distances.
550.023 – Duty to Give Information and Render Aid – A person who was involved in an accident should not leave the scene of the accident without offering assistance. Although this seems obvious, it is also the law, and there can be serious consequences in trucking accident litigation cases in Texas for failure to stick around, post-accident.
Our trucking company defense law firm in Fort Worth is familiar with the laws and statutes that affect our truck driver clients, and we will be happy to assist your trucking company with safety training and guidance, with an eye towards accident prevention as well as lawsuit prevention.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas trucking defense attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
In Weeks Marine, Inc. v. Standard Concrete Products, Inc., 737 F.3d 365 (2013),theU.S. Fifth Circuit Court of Appeals addressed issues relating to indemnity agreements and the scope of the duty to defend. The court discussed the applicability of the “eight corners” rule, and concluded that there was no duty to indemnify where “the same reasons that negate the duty to defend likewise negate any possibility that the [indemnitor] will ever have a duty to indemnify”.
The court reviewed an Agreement, stating that the requirement under Texas law obligating the subcontractor to indemnify the general contractor only with respect to claims related to workmanship of the subcontractor’s product did not require the subcontractor to defend the general contractor in the underlying action brought by an employee of the subcontractor under the circumstances of this case. Here, the action attributed the accident to the construction process used by the employee and his crew and, alternatively, the action alleged defects in certain steel modules that were a component that subcontractor used to make its product, but were not the subcontractor’s product itself.
The court stated that, unlike the duty to defend, the duty to indemnify “is triggered by the actual facts that establish liability in the underlying lawsuit.” Guar. Nat’l Ins. Co., 211 F.3d at 243. As a result, the court may consider facts outside of those alleged in the complaint to determine the scope of the duty to indemnify. Gilbane Bldg. Co., 664 F.3d at 594.
Under Texas law, the duties to defend and indemnify “are distinct and separate duties” and “enjoy a degree of independence from each other.” D.R. Horton–
Texas, Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740, 743–44 (Tex.2009). The “duty to defend” is the broader of the two. Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir.2004).
The duty to defend is “circumscribed by the eight-corners doctrine,” so that it is determined solely by the language of the indemnity provision and the allegations in the third-party pleadings. Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589, 594 (5th Cir.2011). Moreover, the court must review the third-party pleadings “without regard to the truth or falsity of those allegations.” GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 308 (Tex.2006). The duty to indemnify, by contrast, “is triggered by the actual facts that establish liability in the underlying lawsuit.” Guar. Nat’l Ins. Co. v. Azrock Indus. Inc., 211 F.3d 239, 243 (5th Cir.2000).
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas insurance defense lawyers in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
An issue that has received a great deal of attention over the past few years is whether punitive/exemplary damage awards can be covered by insurance policies under Texas law.
Texas is not one of the eight states which expressly prohibit insurance coverage for exemplary damages. The Texas Supreme Court sets forth a method of analysis which calls for an examination of the insurance policy first. If it is determined that the policy provides coverage for exemplary damages, a determination must be made whether the public policy of Texas allows or prohibits coverage in the circumstances of the underlying suit. Fairfield Ins. Co. v Stephens Martins Paving, 246 S.W.3d 653 (Tex. 2008). The Fairfield matter involved a worker’s compensation policy (which provided both worker’s compensation insurance and employer’s liability insurance) which was approved by the Texas Department of Insurance. The policy in question in the Stephens Martins matter included “all sums” language in the employer’s liability portion of the policy, and the Court points to this as indicative of the Legislature’s intent not to prohibit coverage for claims based on gross negligence (the policy also had language explicitly excluding coverage for intentional acts).
In an extensive survey of the law nationwide, the Texas Supreme Court summarized the public policy of practically every jurisdiction that has addressed the insurability of punitive damages, finding that 45 states’ highest courts or legislatures have spoken to the issue. Of those jurisdictions:
25 states have generally indicated their public policy does not prohibit coverage for punitive damages;
Eight states prohibit coverage for exemplary damages;
Seven states permit coverage for such damages, but only when the insured’s liability is vicarious;
Three states allow insurance coverage of punitive damages in the uninsured motorist context but have not addressed the issue under other circumstances; and
Two states prohibit insurance coverage of punitive damages in the context of uninsured motorists but have not addressed the issue with respect to other forms of coverage.
Of the five remaining jurisdictions, four of them (which until Stephens Martin included Texas) have yet to address the insurability of punitive damages, and one state (Nebraska) prohibits the imposition of punitive damages.
In Stephens Martin, the Texas Supreme Court observed that in light of the foregoing statistics, “the majority of states that have considered whether public policy prohibits insurance coverage of exemplary damages for gross negligence, either by legislation or under the common law, have decided that it does not.”
Given insurers’ ability to exercise freedom of contract by expressly excluding punitive damages, agents should certainly carefully scrutinize liability policies for such exclusions, particularly if their clients have expressed an interest in procuring such coverage, or are in parts of the State where punitive damages are commonly awarded. Employers should verify with their insurance agent exactly what is covered, and excluded, with regard to exemplary damages.
Previous Texas cases had reached varying results as to the insurability of punitive damages. For example, in The Philadelphia Indemnity Insurance Company v. Stebbins Five Companies, No. 3:02-CV-1279-M, 2004 U.S. Dist. LEXIS 6374 (N.D. Tex. Jan. 27, 2004), the United States District Court for the Northern District of Texas held that punitive damages are covered under Commercial General Liability (“CGL”) and Professional Liability policies. The court used a two-prong test to find that punitive damages are covered. First, the court asked whether the policy’s terms provided for, and failed to exclude coverage of, punitive damages. Second, the court inquired whether Texas public policy prohibits coverage for punitive damage awards. As to the first inquiry, the court concluded that because the policy’s terms failed to expressly exclude punitive damages, and the insuring clause provided coverage of “all sums” or “those sums” “that the insured becomes legally obligated to pay,” the liability policy was broad enough to encompass punitive damages. Similarly, the court held that a finding of malice and a determination of grossly negligent conduct against the insured in the underlying case does not automatically trigger the intentional or expected injury exclusion. As to the second inquiry, the court determined that insuring punitive damages was not contrary to the public policy of Texas.
On the other hand, in Comsys Information Technology Services, Inc. v. Twin City Fire Insurance Company, 130 S.W.3d 181 (Tex. App. – Houston [14th Dist.] 2003, pet. denied), the Houston Appeals Court determined that punitive damages were excluded from an Excess Temporary Employment Contractors Errors or Omissions Liability Policy. The relevant portions of the policy excluded coverage for: a. Intentional acts, errors or omissions by or at the direction of the insured. . . .
b. Any injury or damage arising out of willful, dishonest, fraudulent, criminal or malicious acts, errors or omissions by or at the direction of the insured.
The court determined that because the policy excluded intentional acts, damages for actions committed with malice were excluded under section I.2.a of the policy, and that punitive damages supported by a finding of malice were excluded by section I.2.c. The court also concluded coverage for DTPA violations was similarly excluded as dishonest, fraudulent, or criminal acts under Section I.2.c of the policy.
This Supreme Court decision in Fairfield Ins. Co. v Stephens Martins Paving has substantial impact for nonsubscriber employers with insurance. For example, one employer’s liability plan obtained by one of our Texas nonsubscriber employer clients provides for coverage for “Bodily Injury Damages” which includes “all reasonable amounts paid to obtain a release of liability, settle a claim or pay a judgment based on an action for workplace injury brought against you by an employee.” The policy also excludes coverage for intentional acts. This language is similar to or virtually the same as much of the policy language we see.
Texas courts tend to interpret such a policy to include coverage for gross negligence including any exemplary damages which could be assessed. If you are a nonsubscriber Texas employer and would like us to take a look at your non-subscriber insurance policy, it would probably be useful to your risk management and risk forecasting model for us to do so.
If in our preliminary determination, if we conclude that coverage for exemplary damages is available under the policy, we would then proceed to an analysis of the facts and circumstances in a specific case, on a case by case basis, to determine whether provision of coverage in each particular instance would run afoul of public policy concerns, which will be an important consideration in determining the likelihood of punitive damages coverage. We will be pleased to discuss with you any matters which have prompted concern regarding potential exposure for punitive damages, in order that we may help you complete your nonsubscriber company’s risk management analysis.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas nonsubscriber defense attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
As lawyers retained by insurance companies to defend against Texas personal injury lawsuits brought against their insureds, we frequently encounter situations where the so called Stowers Doctrine is invoked. It is a doctrine that we have seen put forward against our clients, or have put forward ourselves on their behalf. We have used it both offensively and defensively. The Stowers doctrine in Texas imposes a duty on insurance companies to settle third party claims that have been brought against their insured under circumstances that would cause a reasonably prudent uninsured to settle.
But what exactly is the Stowers Doctrine according to the actual decision of the early 20th century court that famously gave the doctrine life? It seems no one ever goes back to look at the nuanced language of that old case.
The doctrine is based on a court decision that goes way back to 1929. In Stowers Furniture Co. v. American Indem. Co., 15 S.W.2d 544 (Tex. Comm’n App. 1929) the court held that that a defending third party insurance company that fails to defend a third-party case in the way it would if its liability were not limited by contract will be liable for any damages in excess of the policy limits for which the policyholder ultimately becomes liable. The court considered an automobile liability coverage case where the insurance company asserted the absolute right to conduct defense of lawsuits against its insured and then rejected a settlement offer of what amounted to 80 percent of the limit of liability. The insurance company took the position that it had little to lose by going to trial because its liability was limited by the terms of the policy. Unfortunately, and predictably, the automobile insurance policyholder was held to be liable to the underlying plaintiff for nearly 300 percent of the policy limits in the underlying trial.
The policyholder then brought the coverage action against the insurance company. The court rejected the insurer’s argument and held that: Wherein an insurance company makes such a contract [giving it the exclusive right to defend]; it, by the very terms of the contract, assumed the responsibility to act as the exclusive and absolute agent of the insured in all matters pertaining to the questions in litigation, and as such agent, it ought to be held to that degree of care and diligence which an ordinarily prudent person would exercise in the management of his own business.
As a result, the court held that the insurer was liable to Stowers for the policy limits and further duties consistent with exercising the “degree of care and diligence which a man of ordinary care and prudence would exercise in the management of his own business.”
The Stowers court further held that: It is the duty of the court to give effect to all of the provisions of the policy, and it would certainly be a harsh rule to say that the indemnity company, in a case such this, owed no duty whatever to the insured further than the face of the policy, regardless of whether it was negligent in discharging its duties as the sole and exclusive agent of the insured, in full and complete control. Such exclusive authority to act in a case of this kind does not carry with it the right to act arbitrarily.
The court remanded the case for a new trial . It did not award extra-contractual damages.
The doctrine that was put forth by the court is Stowers has been held to only apply to third-party cases in which the insurance company has defended or otherwise tendered coverage to its policyholder, and the policyholder argues that such defense or coverage has been inadequate. Southstar Corp. v. St. Paul Surplus Lines Ins. Co.,42 S.W.3d. 187 (Tex. App. 2001). Thecourt in that case held that, When and insurance policyholder alleges only that the insurance company wrongfully failed to defend, the policyholder is limited to bringing claims for damages under the insurance contract and for extracontractual damages to make itself whole under the Stowers doctrine. The policyholder also may, however, in addition to its Stowersclaims, bring claims for breach of the duty of good faith and fair dealing, but only when the policyholder makes allegations that the insurance company breached duties implicating public policy that arise independent of the contract itself. As the Stowers doctrine has evolved over the years it has had the effect essentially of holding insurance companies to an ordinary negligence standard as it has related to the handling of the claim by the insurer.
The duty of an insurance carrier to settle under Stowers is not absolute. The insurance company does not have to settle if a reasonable uninsured would not do so. Such language is fertile ground for subjectivity, which is often the great seed of much flowering litigation later. So while Stowers may be old, it is certainly not forgotten, and seems poised to survive the next millennium.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas insurance attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
There, the insurance carrier, Hanover, provided commercial general liability insurance (CGL) coverage to PAJ, a jewelry manufacturer, who was sued for copyright infringement by a third party. While the CGL policy covered certain advertising injury, the terms of the policy required PAJ to notify it’s insurer of any claim or suit brought against it “as soon as practicable.” PAJ claimed to be initially unaware that the Hanover CGL policy provided coverage for a dispute over copyright infringement. Consequently, PAJ did not notify Hanover until several (4 to 6) months after the lawsuit was filed. The parties stipulated that PAJ did not notify Hanover “as soon as practicable” and that Hanover was not prejudiced by the delay. The trial court granted summary judgment in favor of Hanover, and the court of appeals affirmed, holding that Hanover was not required to show prejudice before it could deny coverage.
The insurer took the position that the prompt notice provision was a condition precedent to providing insurance coverage under the CGL policy. The court saw the case otherwise, noting that “when a condition would impose an absurd or impossible result, the agreement will be interpreted as creating a covenant rather than a condition.” The court concluded that a denial of coverage without a showing of prejudice would be such a result. The court stated that imposing “draconian consequences for even de minimis deviations from the duties the policy places on the insureds.” was unreasonable.
The court stated that “an insured’s failure to timely notify its insurer of a claim or suit does not defeat coverage if the insurer was not prejudiced by the delay.” The court distinguished a 1972 case (Members Mutual Insurance Co. v. Cutaia, 476, S.W. 2d 278 (Tex.1972) which held that prejudice was not required, by stating that the Department of Insurance changed the provision in CGL policies in Board Order 23080, which mandates an endorsement to all CGL policies that requires a prejudice showing when the insured does not comply with the prompt notice provision.
The Court stated that that an insured’s failure to timely notify its insurer of a claim or suit does not defeat coverage if the insurer was not prejudiced by the delay. The Court felt that the failure to give notice of a claim poses a lesser risk of prejudice than the failure to obtain consent to a settlement. The Court rendered judgment that the insurer could not deny coverage because of untimely notice, and remanded the remaining issues to the trial court.
The sequelae of the Supreme Court’s PAJ decision is that PAJ has consistently made it more difficult for insurers to deny insurance coverage based on late notice in the absence of substantially convincing indications of prejudice. This interpretation has had a fairly profound impact on coverage determinations, particularly as may have related to occurrence-based policies. While the prejudice implicit in delay is not completely gone, it may well have been forgotten.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas insurance defense attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
Governor Rick Perry signed Texas House Bill 1869 back on May 25, 2013. This ground shaking bill, which took effect on January 1, 2014, affects the contractual subrogation rights of certain health and disability insurers. It is known as the Subrogation Reform Bill. It places a limit on the amount a health insurer (such as Blue Cross Blue Shield, Aetna, Humana, etc.) can recover out of a personal injury settlement in Texas.
A subrogated insurer’s recovery is now significantly more limited under the new law.
Under the new legislation, a health or disability carrier cannot generally recover from a first party (Uninsured/Underinsured Motorist and/or Medical Payments) coverage.
Additionally, when a covered individual (an insured) is not represented by an attorney, a carrier shall recover the lesser of (1) 50 percent of the gross recovery or (2) the total amount of benefits paid. When an insured is represented by an attorney, a carrier shall recover the lesser of (1) 50 percent of the gross recovery minus attorney’s fees and costs or (2) the total amount of benefits paid minus attorney’s fees and costs.
The Made Whole Doctrine does not apply to a recovery secured under this new law.
When the carrier is not actively represented by counsel, an attorney’s fees shall be apportioned by agreement between the carrier and the insured. The carrier is also to be held responsible for a pro rata share of expenses. If an agreement does not exist, the court shall award fees, not to exceed one third of the carrier’s recovery.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas subrogation attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
In Texas Workers’ Compensation Law, an employee or a person acting on the employee’s behalf must notify the employer of an injury not later than the 30th day after the date on which the injury occurs. This is commonly referred to as the 30 Day Notice Rule. If an injury is an occupational disease, the employee or person acting on the employee’s behalf must notify the employer of the injury no later than the 30th day after the date on which the employee knew or should have known that the injury might be related to the employment.
The requirements of notice of injury to employer are spelled out in § 409.001 as follows:
“Sec. 409.001. NOTICE OF INJURY TO EMPLOYER.
(a) An employee or person acting on the employee’s behalf shall notify the employer of the employee of an injury not later than the 30th day after the date on which:
(1) the injury occurs; or
(2) if the injury is an occupational disease, the employee knew or should have known that the injury may be related to the employment.
(b) The notice required under Subsection (a) may be given to:
(1) the employer; or
(2) an employee of the employer who holds a supervisory or management position.
(c) If the injury is an occupational disease, for purposes of this section, the employer is the person who employed the employee on the date of last injurious exposure to the hazards of the disease.
The requirement that an employee give notice to the employer does not mean that the employee can simply give notice of the condition itself. Section 409.001 has been interpreted to require an employee to also give notice of the fact that the condition is or may be work related.
Under section 409.002 if an employee fails to notify his or her employer as required by section 409.001, then the employer and the carrier are relieved of liability unless one of the following three exceptions applies: 1) if the employer, a person eligible to receive notice, or the employer’s carrier has actual knowledge of the employee’s injury; 2) if the Commission determines that good cause exists for failure to provide notice; or 3) if the employer or the employer’s insurance carrier does not contest the claim.
Under Texas Workers’ Compensation Appeals Decision No. 961562, the good cause standard for an employee is whether the employee prosecutes his claim with that degree of diligence that an ordinarily prudent person would have exercised under the same or similar circumstances.
Good cause is something of a subjective area that lends itself to a fair amount of dispute and litigation. These often become very fact specific cases where the fact findings of hearing officers are not disturbed by the Appeals Panel.
Whether good cause exists is a question of fact to be determined by the hearing officer. Good cause must exist continuously up to the time the otherwise untimely report of injury is made. This does not mean that a report of injury must be made immediately upon determination of good cause. The hearing officer must consider the totality of claimant’s conduct in determining ordinary prudence. Texas Workers’ Compensation Commission Appeals Panel Decision No. 93815. The question is whether a reasonable person would recognize the nature and seriousness of the injury and that it may be work related. Texas Workers’ Compensation Appeals Panel Decision No. 94894.
Although ignorance of the law in and of itself is not good cause for failure to file a claim, reliance on representations by the employer that it has indeed filed a claim, along with furnishing of medical and income benefits, may be possibly considered good cause. Texas Workers’ Compensation Appeals Panel Decision No. 94274.
A belief that an injury was trivial can constitute good cause for failure to timely notify an employer. Texas Workers’ Compensation Appeals Panel Decision No. 91123.
There is no requirement in the Workers’ Compensation Act that an individual receiving the report of an injury be a supervisor over the claimant. The only requirement is that the person be in a supervisory capacity. Texas Workers Compensation Appeals Panel Decision No. 92271.
The purpose of the notice requirement has historically been to give the insurance carrier an opportunity to timely investigate the facts surrounding an injury. This is why the Appeals Panel has required that the employer must receive notice, not only of the condition, but also of the fact that there is an allegation that the injury is work related. This was demonstrated in Appeals Panel Decision No. 92357, where the claimant complained of back pain similar to complaints she had in the past to her employer, but did not provide her employer with notice that she had sustained a work related back injury. This was held to be insufficient notice of a new injury .
In Appeals Panel Decision No. 002549, the Appeals Panel reiterated that the 30 day notice period can be extended by the weekend. If the 30th day after the date of injury is a Sunday, Rule 102.3(a)(3) provides that the period in which to report an injury is extended to the next day that is not a Saturday, Sunday, or legal holiday.
To be effective, notice of injury needs to inform the employer of the general nature of the injury and the fact that it is job related. Texas Workers’ Compensation Appeals Panel Decision No. 001479, citing DeAnda v. Home Insurance Company, 618 S.W.2d 529 (Tex. 1980).
It has also been held and reiterated by the Appeals Panel in Decision No. 00283 that the carrier is not relieved of liability for a so called “follow on injury” based on the claimant’s failure to give timely notice to the employer. In that decision the Appeals Panel affirmed and cited Appeals Panel Decision No. 971706 and DeAnda v. Home Insurance Company, supra, as stating that the employer need only know the general nature of the injury and the fact that it is work related. The claimant had no duty, in that case, to advise her employer of complications arising out of the original injury that she had already timely reported.
In the case of Safford v. Cigna Insurance Company of Texas, 983 S.W.2d 317 (Tex. App. – Fort Worth 1998, pet. denied), the thirty day notice provision in a “latent” disease or injury situation, was interpreted to mean that thirty day notice begins to run when an employee’s symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice that he or she suffers from some injury and knows, or in the exercise of reasonable diligence should have known, that the injury is likely work related.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas workers’ compensation defense lawyers in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.