Aranda v. Insurance Company of North America

In Aranda v. Insurance Company of North America, 748 S.W.2d 210 (Tex. 1988), two workers' compensation carriers agreed that a covered employee suffered compensable injuries, but both carriers refused to pay benefits because they could not agree "as to which carrier bore primary responsibility." Id. at 211. The supreme court noted that injured employees rely on the carrier for disability benefits and medical expenses, are "dependent on the carrier for protection from the economic calamity of disabling injuries," and are otherwise without any "immediate recourse" for an arbitrary denial of a valid claim. Id. at 212. Thus, the court recognized that a carrier has a duty "to deal fairly and in good faith with injured employees" in processing their claims. Id. at 212-13. The court concluded that, although the carrier's unreasonable failure to pay benefits might be rectified through administrative procedures, injured employees "may in the interim incur substantial damages because of an inability to meet basic living expenses or pay for medical care." Id. at 212 . The supreme court, in Aranda, also rejected the carriers' argument that the exclusivity provision of the TWCA barred the employee's claims, noting that "a claimant is permitted to recover when he shows that the carrier's breach of the duty of good faith and fair dealing or the carrier's intentional act is separate from the compensation claim and produced an independent injury." Id. at 214. The court reasoned that the remedies afforded by the TWCA "are exclusive only if the injury complained of is an injury contemplated by the Act-a personal injury sustained in the course of employment," and, thus, the exclusivity provision of the TWCA "cannot be read as a bar to a claim that is not based on a job-related injury." Id. In regard to the specific claims asserted in Aranda, the court noted that the claimant alleged a breach of the duty of good faith and fair dealing "that was separate from his compensation claim for his work-related disability" and that the claimant's alleged damages caused by the carrier's failure to pay benefits included "losses to credit, reputation, and the ability to maintain a job when his credit was a matter of consideration for his employer." Id.