in Re Crawford & Company, Crawford & Company Healthcare Management, Inc., Patsy Hogan and Old Republic Insurance Company
458 S.W.3d 920
| Tex. | 2015Background
- In 1998 Glenn Johnson suffered severe, compensable workplace injuries and was entitled to lifetime workers’ compensation benefits. Disputes over benefits led to administrative proceedings (BRC and contested case) still pending.
- Glenn and his wife Natalie sued Old Republic (insurer), Crawford & Company entities, and employee Patsy Hogan, alleging a decade-long scheme to delay, deny, and misrepresent workers’ compensation benefits.
- Causes of action included torts (negligence, fraud, malicious prosecution, IIED, conspiracy), contract claims (breach, quantum meruit, bad-faith), and statutory claims (Texas Insurance Code, DTPA).
- Plaintiffs argued they need not exhaust administrative remedies because some claims are outside the Act, Crawford’s conduct excuses exhaustion, or the injuries are independent of workers’ compensation benefits.
- Crawford moved to dismiss for lack of jurisdiction, invoking Texas Mutual Ins. Co. v. Ruttiger and the exclusivity of the Division of Workers’ Compensation; the trial court denied dismissal of most claims and the court of appeals denied mandamus.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Workers’ Compensation Act (via the Division) has exclusive jurisdiction over claims arising from a carrier’s investigation, handling, or settlement of a workers’ compensation claim | Johnsons: many claims are not governed by the Act or allege independent injuries so they may be litigated in court without exhausting administrative remedies | Crawford: Ruttiger and the Act’s comprehensive scheme provide exclusive administrative remedies for claims arising from claims-handling | Held: The Act has exclusive jurisdiction over claims that arise from investigation/handling/settlement of WC claims; trial court lacked jurisdiction and should have dismissed |
| Whether common-law and statutory bad-faith, negligent investigation, and breach-of-contract/quantum meruit claims tied to claim handling are barred by the Act | Johnsons: these claims seek damages beyond benefit amounts and are therefore outside the Act | Crawford: Such claims are essentially claims- handling complaints and are precluded by the Act’s exclusive remedial scheme | Held: Those claims are barred and within the Division’s exclusive jurisdiction |
| Whether misrepresentation/fraud claims can proceed in court when the alleged misrepresentations arose during claim settlement | Johnsons: Ruttiger’s exception for Insurance Code §541.061 means misrepresentation/fraud claims can proceed | Crawford: Misrepresentations made in the claim-settlement context are covered by the Act and Division enforcement | Held: Misrepresentations made in handling/settling WC claims fall within the Act and are subject to the Division’s exclusive jurisdiction |
| Whether malicious prosecution and IIED claims based on carrier reports of alleged fraud are outside the Act because they involve criminal process and independent harms | Johnsons: such claims involve conduct outside administrative scheme and seek damages unrelated to benefit disputes | Crawford: Reporting suspected fraud and related investigative acts are part of claims-handling duties; the Act addresses false reporting and provides remedies | Held: Malicious prosecution and IIED claims arising from claim investigation/handling are within the Division’s exclusive jurisdiction |
Key Cases Cited
- Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012) (held the Act provides exclusive procedures/remedies for claims arising from claims-handling and barred certain Insurance Code and common-law bad-faith claims)
- Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492 (Tex. 2013) (reaffirmed deference to the Legislature’s comprehensive WC scheme)
- In re Sw. Bell Tel. Co., L.P., 235 S.W.3d 619 (Tex. 2007) (mandamus appropriate to require dismissal where an administrative agency has exclusive jurisdiction)
- In re Entergy Corp., 142 S.W.3d 316 (Tex. 2004) (same principle: courts must dismiss when exclusive administrative jurisdiction exists)
- Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411 (Tex. 1989) (non-employee spouse generally cannot bring claims duplicative of worker’s remedies under the Act)