COURT IS WITHOUT JURISDICTION TO DETERMINE IF AN EMPLOYEE EXHAUSTED ITS ADMINSTRATIVE REMEDIES UNDER RUTTIGER

Recently, the Beaumont Court of Appeals affirmed a trial court’s dismissal of an employees’ suit for common law and statutory bad faith arising from the handling of a worker’s compensation insurance claim.  In Robert Bean v. Texas Mutual Insurance Company, Phillip W. Smith, and Debbie K Garrett, No.09-11-00123-CV (Tex. App.—Beaumont, November 9, 2012), an employee sued its worker’s compensation insurer and two of its adjusters for the wrongful handling of his worker’s compensation claim.

Upon the Defendants’ motion, the trial court dismissed the employee’s claims because he had not exhausted his administrative remedies.  While the case was on appeal, the Texas Supreme Court held in Tex. Mut. Ins. Co. v. Ruttiger, No. 08-0751, 2012 WL 2361697, (Tex. June 22, 2012), that an administrative dispute resolution process provided by the Worker’s Compensation Act is the sole remedy available to address covered employee’s claims, and that a worker’s compensation claimant has no cause of action against a compensation insurer under the Texas Insurance  Code for unfair settlement practices or for the breach of the duty of good faith and fair dealing.

The Court concluded in light of the Supreme Court's  decision in Ruttiger, the Court lacked jurisdiction to evaluate whether the employee exhausted his administrative remedies because the judicial doctrine of exhaustion of remedies is part of the parcel of exclusive jurisdiction granted to the administrative agency.  As a result, the Court affirmed the trial court's  dismissal.