*1 legislative Mormon v. Mus amendment.” Aviation, Inc., 182,
tang FIRE CITY INSURANCE TWIN Legislature COMPANY, Petitioner, When the re-enaets “it change, a without substantive statute presumed [Legislature knew and DAVIS, Respondent.
adopted placed interpretation on the D. original act the new enactment and intended No. D-4600. Coastal, to receive the same construction.” 918. Deer Park was decided Supreme Court of Texas. years ago. forty more than Since Argued Jan. time, Legislature has convened nu times, Municipal An merous has enacted the July Decided (currently chapters Act1 nexation codified Rehearing Sept. Overruled Code; and 43 the Local Government 970a), formerly Tex.Rev.Civ.Stat. art.
has codified the statutes Local Govern time, however,
ment Code.2 In all that
Legislature has not section 43.024. amended
By holding apply section 5.901 does by Type municipality,
to a A annexations today accomplishes by judicial
Court pol
something appropriately which is more Moss,
icy Legislature. decision for the
S.W.2d at 458. Type municipality
A A should not be able applicable exceed surface area limits original incorporation through
to its subse-
quent annexations. Because the addition of territory
the annexed cause will square mile
Wilmer exceed four size applicable incorporation,
limit I to its
reverse the of the court of challenged
and render
annexation ordinances are void. Legislature Municipal Legislature these statutes in Annex- 2. When the codified
1. The enacted 43.024 it did not add references section large part Act in to curb the ation 5.901 because to the territorial limits of section the virtually power unlimited of home rule munici- a substan- was the statutes. See intended as codification palities unilaterally territory. annex Texas change tive TexLoc.Gov't Municipal Report A Legislative Council, Annexation: 1.001(a) (stating Govern- Local Code 56-6, 1960). (Dec. Legislature, to the 57th No. part of the state’s ment Code was enacted as statutoiy on annexations The then-current limitations “contemplates program revision general municipalities law were viewed as suffi- general topic-by-topic revision of the state’s prevent any potential in their cient to abuse permanent without substantive statute law ” practices. annexation added)). change
CORNYN, Justice, opinion delivered the Court, PHILLIPS, joined by Chief Justice, GONZALEZ, HIGHTOWER, HECHT, GAMMAGE, OWEN, ENOCH and Justices. primary issue this bad faith insur-
ance proceeds case whether employee by denied a workers’ compensation insurance carrier will alone an award of hold that under our decision Aranda America, Insurance North Co. (Tex.1988), a workers’ jury findings entitling claimant must obtain her to in addition to the benefits puni- withheld in order recover tive Accordingly, we reverse that portion ap- of the of the court of award, peals upholding punitive damage modified, ap- we affirm the court of peals’ judgment for Davis in amount of the withheld, percent statutory penalty, prejudgment interest, interest, postjudgment attorney’s fees. I. 30, 1986, injured
On October Faith Davis subsequently her lower back work. She filed a claim with workers’ carrier, employer’s City Fire Insurance Company. part therapy As for her injury, September back Davis’ doctor prescribed jacuzzi “hot large tub or body for life.” 1,1987, On City and Twin December settled her workers’ case. Un- City agreement, agreed der that previously paid in addition to years’ five future medi- expenses physician cal incurred Davis’ injury. days as a result her back Six after finalized, agreement amade terms of the settlement for the hot tub. claim, City
When Twin received the it in- necessity vestigated pre- the medical Jung, Carlton, P. Michael W. Edward Dal- First, scription requested for the hot tub. it las, petitioner. physician. confirmation letter from Davis’ Tillery, Dallas, respondent. April Dale B. On received confir- punitive dam- physician, reinstated the accompanied mation from Davis’ 237.1 by a cost of the hot award. estimate $3500 tub. Twin then referred matter (TMF), an the Texas Medical Foundation II. agency consulting that conducted outside *3 City that the court of Twin contends company. the On Octo-
medical reviews for punitive it appeals when reinstated the erred 27,1988, City report to Twin ber TMF sent finding of damages because the award recommendation; supported doctor’s the not a find benefits was withheld however, TMF concluded that a side- $150 ing damages. tort The insurer of actual portable whirlpool ade- mounted would be damages argues the actual $3500 quate larger unless Davis’ size made a tub bargain were benefit of the found the necessary. City misplaced it or Twin claims damages, damages only, not tort or contract overlooked letter. punitive support the award of and cannot 17, 1988, requested a On Davis October Relying in Vail damages. on our statement pre-hearing conference before the Industrial Bureau Mutual Insurance v. Texas Farm challenge City’s fail- Accident Board to Twin Co., (Tex.1988), “an in S.W.2d response, to tub ure honor hot claim. pay refusal to the insured’s surer’s unfair 28, 1988, City Twin on October denied damages law in as a matter of claim causes medically necessary, and hot tub was amount of the benefits at least the 25, 1989, January refused Davis’ claim. On withheld,” the court of id. Twin denial her notified that its of damages that the awarded reasoned final, pay claim was but offered to for a $150 withheld were benefits whirlpool side-mounted unit. such, damages, and as an tort eventually filed suit Twin disagree. punitive award of City based on claim for the hot $3500 tub, fraud, alleging contract, breach of inten- County In Arnold v. National Mu tional negligent and infliction of emotional Co., 165, 168 tual Fire Insurance 725 S.W.2d distress, violations, insurance code DTPA vi- (Tex.1987), we held that olations, pay failure compensa- to workers’ damages anguish exemplary and mental duty good tion and breach of the of damages are recoverable a breach of (1) trial, dealing. fair At jury: and faith and of fair engaged found that Twin had in unfair allowing principles same recov- deceptive practices, or failed trade to deal ery damages of those in other tort actions. fairly Davis, and faith with failed means, necessary recently to reasonable and medical ex- That as we reiterated Dutschmann, required penses agree- Corp. Express settlement Federal (2) ment; (Tex.1993), “[rjecovery actual S.W.2d finding expense “wrong- punitive damages requires amount of for medical of an of $3500 fully Davis, independent accompanying with actual specify- withheld” from without ing liability damages.” of of A breach of alone will the three theories contract (3) justified award; support punitive damages; the existence refused find not pain be physical or an- tort must established. suffered mental of Reed, faith; (4) Homes, City’s guish as- Inc. v. due See Jim Walter mere avail- punitive sessed of The (5) theory recovery City; attorney’s ability tort-based of awarded Davis sufficient; fees. trial court sustained rendered damages, proven punitive before percent in actual from a tort must $3500 fees, Doubleday statutory penalty, attorney’s available. See & Co. but are Rogers, denied challenge. appeals' jurisdictional For the reasons cited the court opinion, respect affirm party disputes
Neither
these
damages” subject
fundamental were not “actual
tenets
Texas law.
remedy provisions
enhanced
DTPA
Insurance Code
unfair
settle-
claims
Likewise,
parties do
dispute
practices.
rejecting
ment
argument,
fairly
that the insurer’s failure to deal
and in
this Court
“that
held
an insurer’s
re-
unfair
good faith with
insured is a
its
cause of
fusal to
insured’s
tort,
claim causes
action that sounds in
and is distinct
as a
of law in at
contract cause of action
matter
least
for the
underlying
the terms
amount of
insur
policy.
ance
See Arnold v.
County
National
withheld.” Id.
Mut. Fire Ins.
Davis’ and
on
the court
reliance
(Tex.1987); Aranda v. Insurance Co. N.
misplaced.3
Vail is
As it relates to
issue
*4
Am.,
(Tex.1988);
case,
only
in this
Vail was
concerned with the
Co.,
Security
Viles
Nat’l Ins.
788 S.W.2d
argument
policy
insurer’s
that
im-
benefits
(Tex.1990). Finally,
agree
all would
properly
damages
were not
withheld
“actual
if
the trier of fact assesses actual dam
in relation to a
of unfair
claim
claims settle-
ages for
separate
bad faith conduct that are
practices.”
In rejecting
ment
Id.
the insur-
from and that differ from benefits under the
argument,
contract,
policy
er’s
we held that
benefits
recovery
this tort-based
satisfies
Dutschmann n
wrongfully
requirement
withheld were indeed
indepen
that an
actual
punitive
dent tort be established before
dam
under the DTPA and
Code.
Insurance
ages are available.2
holding
Our
premised
on the cumulative
remedy provisions of the two statutes at
point
dispute
The main
of
between the
Vail,
issue.
did not
parties
punitive
concerns whether
damages
argument
even discuss in
Vail
in
case are
available because the
here,
policy
wrong-
makes
benefits
only damages
for the medical ex-
fully
not
an
withheld will
alone
(the
penses
prescribed
tub),
withheld
hot
Rather,
punitive damages.
award of
are in
of
damages.
the nature
contract
case is controlled
our
in Aranda
any
As
did
award
additional
America,
clearly
only
amounts
Insurance Co.
North
referable
to the bad
of
action,
example,
faith cause of
for
S.W.2d 210
mental
anguish damages,
contends that
former version
the Workers’ Com-
jury’s
refusal
damages
to award
refera-
pensation
governs
pro-
Act that
Davis’ claim
only
ble
to the tort
faith
of bad
is fatal to her
vided a
“personal
scheme for
punitive
claim for
injuries
employee
sustained
in the
argues
governed
this issue is
employment.”
course of his
Tex.Rev.Civ.
in
our decision Vail v. Texas Farm Bureau
(repealed by
§
art.
Acts
Stat.
Mutual
Insurance
rate SPECTOR, dissenting. independent injury.” duced ago, squarely held years this Court Seven added). As to find declined to pay that “an unfair refusal insurer’s injury of her at least insured’s claim causes denied workers’ the amount of the *5 the reinstatement v. Farm Bureau Mut. withheld.” Vail Texas punitive damage award cannot stand. (Tex.1988). 129, 134 Ins. Today majority from hold- the retreats this consistently recog Texas courts have ing compensation that carri- and concludes a injury requirement this independent nized er’s bad faith refusal to benefits does brought bad when faith claims any that would cause a carrier covered the Workers’ an award of See, Compensation e.g., Lloyds Act. Service 688, Greenhalgh, Ins. Co. majority’s justified be The decision cannot ( 1989), Tex.App. rev’d on other — Austin exclusivity provision in on the basis (Tex.1990) grounds, (allowing 787 938 S.W.2d Compensation Act. The same Workers’ bad faith claim because claimant estab Vail, soundly rejected year we decided we damages flowing lished bad from the faith exclusivity provision argument compensable Act); that were not recovery of bad faith dam- prevent should Moriel, Transportation Ins. Co. v. 814 ages compensation carriers: 144, 1991), (Tex.App S.W.2d Paso . —El contemplate Act does not [T]he (Tex. grounds, rev’d on other S.W.2d a carrier to act faith or failure of 1994) (applying interpretation Aranda’s can intentional tort be mean- carrier’s Varo, exclusivity provision); Harris v. cf. ingfully mere redressed addition Inc., (Tex.App. — Dallas compensation. past to the 12% or 15% due writ) (noting no fraudulent a mis penalties questionable are of Such nominal representation arising claim from a workers’ to act value as an incentive for carrier compensation hearing must also meet reasonably processing employee’s injury requirement). claim. case, only Am., tub, N. Davis were for the cost of the hot an Aranda v. Insurance Co. of medically holding, expense found to so nec S.W.2d recognized essary specifically thus covered Act. The be available on the same terms declined to award should additional, independent injury flow other tort actions: Compensa- lating attorney’s fees when such fees are award 4. The current version of the Workers’ comparable "recovery.” provision. percentage ed as The correct tion Act See a contains is set in our 408.001. method for such calculations forth TexJLabor Code Co. recent in Great American Insurance - District, Utility arguments Municipal reject 5. We Davis’ made in her cross v. North Austin S.W.2d -, - [1995 concerning 358834] appeal proper WL method calcu [Ojrdinary damages, including exem-
plary damages, are
for a
CONSULTANTS,
recoverable
INC., Relator,
A & T
faith
and fair
dealing upon
showing
of the same ele-
permit
SHARP, Comptroller
ments that
of those
John
Public
Texas,
in other tort actions.
Accounts of the State of
Respondent.
added).
No. 94-1024.
majority
avoids
rule on the
basis
language in
stating
Aranda
bad faith
Supreme Court of Texas.
recovery is available when a carrier’s bad
separate
“is
faith
from the
Argued
Jan.
1995.
produced
independent injury.”
July
Decided
Aranda,
Supra at 667 (quoting
claim. Faith Davis is not compensa-
Twin breached the workers’ agreement employer
tion between City. agree- honored that
ment when it settled Davis’
claim. later, present dispute only when arose City wrongfully denied benefits covered *6 agreement. settlement Davis then
brought alleging City’s this suit
conduct “constitutes a breach of Defendant’s dealing arising faith and fair relationship established between Compromise
Defendant Plaintiff Agreement
Settlement and Release.” Given context, City’s should conduct
governed by applicable the same rules insurer.
other See Arnold National
County Mut. Fire Ins. found that Twin bad faith
caused in actual precedents, our
Under these are
ages, they fully jury’s support the addi- punitive damages
tional award of as a means deterring I future acts of faith. would Vail, Aranda, Arnold,
adhere uphold the award of
Accordingly, I dissent.