In re Liberty Mutual Fire Insurance Company

Summary

The Texas Supreme Court conditionally granted Liberty Mutual Fire Insurance Company’s petition for writ of mandamus in a workers’ compensation bad-faith dispute. The Court held that the claimant was required to exhaust administrative remedies concerning entitlement to medical benefits before pursuing his bad-faith claim, and that he had failed to do so by seeking preauthorization when it was unnecessary and not seeking it when required. The Court directed the trial court to grant Liberty’s plea to the jurisdiction and dismiss the case.

Holdings

1. A claimant may not bring a bad-faith claim dependent on entitlement to further workers' compensation medical care until the claimant first pursues the administrative remedies governing that medical-benefits dispute.
2. A settlement provision preserving the claimant's entitlement to medical benefits does not eliminate the requirement that disputes over whether additional treatment is reasonably required be pursued administratively.
3. The rule that additional treatment incident to an already preauthorized surgery need not be separately preauthorized does not apply when preauthorization for the surgery was never requested.
4. A claimant does not exhaust administrative procedures by failing to request preauthorization for treatment when preauthorization is required or by seeking preauthorization for treatment when it is not required.

Questions Presented

1. Whether Nickelson was required to exhaust workers' compensation administrative remedies before bringing a bad-faith claim dependent on his entitlement to additional medical care.
2. Whether the parties' settlement provision preserving entitlement to medical benefits dispensed with the administrative exhaustion requirement.
3. Whether the reasoning in Gregson v. Zurich American Insurance Co. excused exhaustion because the claimed treatment involved care incident to a preauthorized procedure.
4. Whether Nickelson exhausted administrative remedies through a telephone conversation with Liberty's adjuster.

Disposition

writ_granted