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We also acknowledge the above-cited decisions involved general liability policies - not specifically workers'
compensation policies. Nevertheless, their reasoning is even more compelling in the workers'
compensation setting. In particular, the act prohibits an employer, other than a certified self-insured, from
exercising control over claims handling and settlement. See Tex. Lab. Code Ann. § 415.002(a)(6)
(Vernon 2006) (stating an insurance carrier, or its representative, commits an administrative violation if it
“allows an employer, other than a self‑insured employer, to dictate the methods by which and the terms on
which a claim is handled and settled"). Because Methodist was not a certified self-insured, we have no
option but to enforce the provision giving Zurich discretion to settle claims within the deductible. Methodist
argues it did not seek to exercise discretion but only insisted that Zurich act reasonably. However, if Zurich
had adjusted a claim knowing that, after the fact, it may be required to account to Methodist for the
reasonableness of its decisions, Methodist would have indirectly influenced handling and settlement of the
claim.
The Methodist Hospital v. Zurich American Inc. Co. (Tex. App. - Houston [14th Dist.] Jul. 7, 2009)
(Seymore) (INSURANCE LITIGATION: insured's suits against worker's compensation carrier alleging
wrongful payment of noncompensable injury claims within the deductible)(insurer's duty of good faith and
fair dealings, negligent claims handling, express warranty claim, breach of warranty - elements, conclusory
affidavit)
AFFIRMED: Opinion by Justice Seymore
Before Justices Frost, Seymore and Guzman
14-07-00663-CV The Methodist Hospital v. Zurich American Insurance Company, Tamera McKinney and
Mary Vu
Appeal from 280th District Court of Harris County
CONCURRING: Concurring Opinion by Justice Frost (higlighting applicable binding Supreme Court
precedent)

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