Texas Mutual Says Thanks, But No Thanks, to State Oversight

Texas’ leading workers’ comp insurer says we don’t need courts and juries watching over them. Yeah, right.

He's echoed in this by Brian White, deputy counsel of the Office of Injured Employee Counsel, which is dedicated to helping injured workers. "It's not very intuitive. Some employees are not English speakers, which just complicates things. Compensability doesn't translate into other languages very well. Even in English, it's confusing."

Nichols says dispute resolutions go quickly. "If you're worried that there's a delay that's going to hurt you, you can even ask for an expedited hearing and you're going to be in there on a very level playing field and a very fast resolution."

This doesn't match the reality Doyle and other attorneys say they've encountered. They say it can take weeks or months to get to a benefit review conference or contested case hearing and that expedited hearings aren't easily granted.

Lance Morris, here with wife Karen, keeps winning battles against workers' comp company Texas Mutual Insurance, but he's yet to win his war.
Margaret Downing
Lance Morris, here with wife Karen, keeps winning battles against workers' comp company Texas Mutual Insurance, but he's yet to win his war.
Karen and Lance Morris meet with lawyer Jeff Raizner, whose firm isrepresenting Lance, a former Justin volunteer firefighter, over a claim that Texas Mutual acted in bad faith in denying coverage for Morris' back injury.
Margaret Downing
Karen and Lance Morris meet with lawyer Jeff Raizner, whose firm isrepresenting Lance, a former Justin volunteer firefighter, over a claim that Texas Mutual acted in bad faith in denying coverage for Morris' back injury.

Nichols says that's not the system's fault. "What happens is, people don't bother to ask for a resolution," she says.

"Our adjusters really try to do the right thing," she says, adding, "we don't have shareholders breathing down our necks trying to squeeze every penny."

While Texas Mutual makes frequent references to all the oversight it has that keeps it on the straight and narrow, it would like to ditch at least part of that—the governor's appointees to its board.

It plans to lobby in the upcoming 2009 legislative session that it should become even more of a private company. Several nearby states have rules that forbid an employer buying a workers' comp policy from a company that in whole or part is controlled by another state. This, of course, has a discouraging effect on Texas Mutual's business.

But even without the governor's appointees, Nichols says, Texas Mutual works in such a heavily regulated industry that workers' rights will always be protected.

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Lawyers who practice workers' comp generally aren't thought to occupy the more prestigious, loftier realms of the attorney hierarchy.

Cases tend to have a low return on investment, and all sides are dealing with a system that legislators periodically "tweak" to rid it of its newest, latest excesses.

Most of Mike Doyle's work has been in offshore and overseas injury cases. According to him, it was actually Texas Mutual that got him started filing bad-faith workers' comp cases.

It all started with a sandblaster with lung disease working for a company in Alice. Doyle was looking into it as a pro bono case. After 23 years doing "sandblasting without protection," Lucas Lopez, 52, had a condition that was like chronic bronchitis, Doyle says. But Doyle's firm was only accepting cases of silicosis—a progressive, usually fatal lung disease from breathing in silica—and Doyle told him he was sorry but it was a no-go. Lopez handed him a workers' comp form; Doyle figured it was the least he could do and helped him fill it out. Case closed.

The workers' comp claim was denied almost immediately on the grounds it was not work-related. That was in 1996.

"I say, 'I'll sort this out.' So for free, I went all the way through the comp system," Doyle says. Lopez kept losing because whenever Texas Mutual sent him to one doctor after another to be evaluated, each physician would issue a report saying the fault was due to the patient's history of smoking, Doyle says.

Except, as Doyle tells the story, it was a "total lie," or close enough. His client's "only experience with smoking was limited experimentation between the ages of 15 and 17, over 30 years ago," Doyle wrote in a 1998 letter to the then-president of the then-Texas Workers' Compensation Insurance Fund.

Doyle filed a case, appealing to state district court. He subpoenaed the doctors' records. "I find out that a Texas Mutual adjuster had been sending secret notes to each of the doctors before he showed up and saying that 'Mr. Lopez will deny this, it's not in his medical records but I confirm that he's a longtime smoker.' "

"The jury said yes, he's injured. So we win the trial...I wrote a demand letter. I'm waiving all of my fees. I had to spend three hours researching the law, so pay me $3,000 to write this letter and do the research and pay him $90,000 because you delayed him for 18 months wrongfully. He was not getting his medicine." At the time, Lopez was the sole support of his wife and 11-year-old disabled daughter, Doyle wrote in the 1998 letter. "No money. No medicine. Lived in a shack with no air conditioning," he sums up today.

Their response: Texas Mutual sued his client, asking an Austin state district court for a declaratory judgment that they didn't have to pay Lopez anything.

Doyle won again. Texas Mutual appealed, and that's when Doyle filed his first bad-faith case in 1998. During all this time, Lopez received no payments for medical care until the Texas Supreme Court rejected TMI's last appeal in the workers' comp case in October 2000, Doyle says.

As for the bad faith case, in April 2001, Texas Mutual settled with Doyle right before trial, he says. According to Doyle, he had a new mission. "Let me talk to the five guys in town who do comp, tell me your worst cases. That's how I started."

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