in Re Crawford & Company, Crawford & Company Healthcare Management, Inc., Patsy Hogan, and Old Republic Insurance Company, Relators

Citations: 453 S.W.3d 450; 2014 WL 1024075Docket: 07-14-00013-CV

Court: Court of Appeals of Texas; March 17, 2014; Texas; State Appellate Court

Original Court Document: View Document

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Crawford Company, including its affiliates and Old Republic Insurance Company, filed a petition for a writ of mandamus seeking to compel the trial court to dismiss all claims brought by Edward Glenn Johnson and Natalie Johnson due to lack of subject matter jurisdiction, arguing that the claims relate to workers’ compensation and that the plaintiffs failed to exhaust their administrative remedies with the Division of Workers’ Compensation. The relators must demonstrate that the trial court abused its discretion or violated a legal duty and that their legal remedy through appeal is inadequate. The court found that Crawford did not meet these criteria for two reasons. 

First, Crawford delayed five months after the trial court’s August 2013 order to file the mandamus petition, which coincided with the approaching trial date set for February 10, 2014. This delay, particularly given the lawsuit’s seven-year history, suggested an intent to obstruct the timely adjudication of the plaintiffs' claims. The court referenced previous cases that justified denying mandamus petitions due to similar delays.

Second, Crawford argued that mandamus was a suitable remedy for the trial court’s failure to grant a plea to the jurisdiction related to administrative remedies. However, the court noted the lack of precedent for using mandamus to review a trial court’s decision on a motion for summary judgment, as established in prior rulings. Therefore, the court denied the petition for mandamus relief.

Crawford's motion for summary judgment was partially denied, raising issues beyond the exhaustion of administrative remedies. Crawford contended that there was no evidence of prosecution initiated by the Defendants against the Plaintiffs, which is essential for a malicious prosecution claim, and asserted that probable cause existed for prosecuting the Plaintiffs for insurance fraud. Crawford acknowledged that the Johnsons' malicious prosecution claim fell outside the worker’s compensation scheme. The trial court's ruling on the exhaustion of remedies could be reviewed through a mandamus proceeding; however, Crawford did not demonstrate that it cleared the necessary legal hurdles to avoid an appeal. 

The Johnsons certified, via their attorney, that they had exhausted their administrative remedies with the Division of Worker’s Compensation and provided supporting documentation, creating a factual dispute unsuitable for resolution in a mandamus proceeding. 

Crawford's reliance on the Supreme Court case Texas Mut. Ins. Co. v. Ruttiger is deemed misplaced. While Ruttiger overruled a previous decision recognizing a common law claim for breach of good faith against workers’ compensation carriers, it did not explicitly negate other potential common law causes of action asserted by the Johnsons. The Supreme Court indicated that the Workers’ Compensation Act does not entirely preclude claims against insurers and acknowledged that claims under Texas Insurance Code section 541.061 remain viable. The Ruttiger court considered legislative reforms aimed at reducing employer costs and enhancing employee benefits, which influenced its conclusions about the compatibility of common law claims with the current workers’ compensation system. These reforms included tighter timelines for insurers in filing disputes and duties to investigate and pay legitimate claims promptly, with penalties for non-compliance.

Reforms in the workers' compensation system have addressed the deficiencies previously noted by the Supreme Court, which led to the extension of a cause of action for breach of the duty of good faith and fair dealing. According to the Ruttiger majority, the current statute and regulations eliminate the need for this cause of action. However, the court does not address how the initiation of baseless criminal proceedings by an insurer against an employee fits within the workers' compensation framework. The case of Crawford also fails to cite any relevant provisions of the Workers' Compensation Act that would regulate such conduct or provide remedies for damages unrelated to workers' compensation benefits. Claims of malicious prosecution are distinct from the administrative processes of workers' compensation laws, indicating that they were not intended to be included within that system. Although malicious prosecution claims may be related to workers' compensation claims, they do not facilitate the resolution of disputes regarding benefits. Crawford's argument that Ruttiger eliminated all common law claims is incorrect, as the claim for malicious prosecution was not part of the earlier case Liberty Mutual Ins. Co. v. Adcock. The acknowledgment that malicious prosecution is outside the scope of workers' compensation further supports that Ruttiger did not preempt such claims. Consequently, since at least one cause of action remains valid, the trial court did not err in refusing to dismiss all claims, leading to the denial of the petition for writ of mandamus.