PJC Business

G OOD F AITH AND F AIR D EALING

PJC 103.1

Elimination of instruction for workers’ compensation claims. In its 1988 deci sion in Aranda , the supreme court held that a workers’ compensation carrier owes a common-law duty of good faith and fair dealing to an injured employee. Aranda , 748 S.W.2d at 212–13. In 2012, the supreme court explained that, through the 1989 amendments to the Workers’ Compensation Act, the legislature addressed the “serious shortcomings in the old [workers’ compensation] law,” including the prior “deficien cies underlying Aranda .” Ruttiger , 381 S.W.3d at 447–49. Given these amendments, as well as its observation that Aranda now often operates in “direct oppositionto . . . the Act’s goals,” the court overruled Aranda . Ruttiger , 381 S.W.3d at 450–51. Accord ingly, the court held that “an injured employee may not assert a common-law claim for breach of the duty of good faith and fair dealing against a workers’ compensation car rier.” Ruttiger , 381 S.W.3d at 433. Causation. A finding of a breach of the common-law duty of good faith and fair dealing entitles a plaintiff to recovery of all damages proximately caused by the wrongful conduct. Chitsey v. National Lloyds Insurance Co. , 738 S.W.2d 641, 643 (Tex. 1987). Causation is incorporated into the damages instruction. See PJC 115.14. Exemplary damages. Exemplary damages are allowed for breach of the duty of good faith and fair dealing and are governed by the same principles applicable to other tort actions. Transportation Insurance Co. v. Moriel , 879 S.W.2d 10, 23 & n.16 (Tex. 1994). Current standards for recovery of exemplary damages are found in chapter 41 of the Texas Civil Practice and Remedies Code. See U-Haul International, Inc. v. Waldrip , 380 S.W.3d 118, 140 (Tex. 2012). Fraud, malice, and gross negligence are grounds for recovery of exemplary damages. Tex. Civ. Prac. & Rem. Code § 41.003(a). For questions submitting exemplary damages, see PJC 115.37 and 115.38 and the Comments accompanying those questions. Noninsurance cases. The courts have been reluctant to impose a special relation ship on parties to an arm’s-length business transaction outside the insurance area. See, e.g., City of Midland v. O’Bryant , 18 S.W.3d 209, 215–16 (Tex. 2000) (employer employee relationship); FDIC v. Coleman , 795 S.W.2d 706, 708–09 (Tex. 1990) (secured creditor/guarantor and receiver/guarantor); Texstar North America, Inc. v. Ladd Petroleum Corp. , 809 S.W.2d 672, 678 (Tex. App.—Corpus Christi–Edinburg 1991, writ denied) (working-interest owners/parties to joint operating agreement); Nautical Landings Marina, Inc. v. First National Bank , 791 S.W.2d 293, 299 (Tex. App.—Corpus Christi–Edinburg 1990, writ denied) (lender/borrower); Adolph Coors Co. v. Rodriguez , 780 S.W.2d 477, 481 (Tex. App.—Corpus Christi–Edinburg 1989, writ denied) (supplier/distributor); City of San Antonio v. Forgy , 769 S.W.2d 293, 296– 98 (Tex. App.—San Antonio 1989, writ denied) (city/contractor); Lovell v. Western National Life Insurance Co. , 754 S.W.2d 298, 303 (Tex. App.—Amarillo 1988, writ denied) (mortgagor/mortgagee). But see Subaru of America, Inc. v. David McDavid Nissan, Inc. , 84 S.W.3d 212, 225–26 (Tex. 2002) (statutory special relationship existed in automobile dealership franchise agreement); Sanus/New York Life Health Plan, Inc.

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