Court of Appeals of Texas, Dallas.

Elizabeth K. WARD, Appellant,

v.

AMERICAN EAGLE INSURANCE COMPANY, Appellee.

No. 05-93-01940-CV.

|

July 18, 1994.

Before Justices BAKER, ROSENBERG, and MORRIS

Opinion By Justice ROSENBERG

O P I N I O N

*1 Elizabeth Ward appeals two summary judgments rendered in favor of American Eagle Insurance Company (American) denying her claims for workers’ compensation benefits, bad faith, and DTPA and insurance code violations. Ward contends that the trial court erred in granting both of American’s motions for summary judgment. We reverse and remand in part and affirm in part the trial court’s judgment.

FACTUAL BACKGROUND

In 1983, Ward became employed with Southwest Airlines (Southwest) as a flight attendant. Over the next few years, she experienced multiple symptoms including headaches, fatigue, nausea, and joint pain. She consulted a doctor in June 1986, who advised her that she was sensitive to numerous substances, such as pollen, molds, dust, foods, and some chemicals. The doctor advised her to change her diet, take antigens, and generally take care of herself. Ward followed her doctor’s advice and her health improved.

In April 1988, Ward experienced acute pain and a discharge from her ear while she was riding as a passenger on a commuting flight from Phoenix to Dallas. She notified her employer in April 1988 that she would be taking sick leave.

When her symptoms did not improve, Ward consulted another doctor in June 1988. The doctor diagnosed her problems as work-related and caused by her continual exposure to jet fuels, de-icing sprays, chemicals, and cigarette smoke. In June 1988, Ward notified her employer that she would need medical leave.

Ward completed an employee’s statement of injury on January 12, 1989 for her employer. Southwest then filed its employer’s first report of injury or illness with its workers’ compensation carrier. Claims adjuster Kathleen Thompson handled Ward’s claim. Thompson received the employer’s first report of injury from Southwest on March 6, 1989. On March 13, 1989, Thompson filed a notice of controversion with the Industrial Accident Board (IAB)¹ alleging that (1) Ward was not in the course and scope of employment at the time of her illness, (2) Ward’s condition appeared to be an ordinary disease of life, and (3) Ward failed to comply with the statutory notice requirements.

Thompson arranged an independent medical examination of Ward in June 1989. The doctor concluded that Ward had developed the disease of aerotitis as a result of her work as a flight attendant. The doctor stated that the condition was not commonly recognized by physicians or specialists outside the field of aerospace medicine. He reported that if not properly treated, the condition could become chronic. He further reported that Ward’s chronic ear and sinus problems associated with her first year of work as a flight attendant were probably caused by, or aggravated by, the aerotitis.

In July 1991, the IAB awarded Ward $15,015 as compensation due her, plus medical expenses.

PROCEDURAL BACKGROUND

American appealed the IAB award. Ward counterclaimed for wrongful denial of workers’ compensation benefits, breach of the duty of good faith and fair dealing, and violations of the Texas Deceptive Trade Practices Act² and article 21.21 of the Texas Insurance Code.³

*2 American moved for summary judgment on Ward’s workers’ compensation claim on the ground that Ward failed to comply with the statutory notice requirements under article 8307, section 4a of the Texas Worker’s Compensation Act. Ward responded to the motion. The trial court granted American’s motion for summary judgment. Ward filed a motion for new trial asking to trial court to reconsider the summary judgment. The trial court denied Ward’s motion for new trial.

American filed a second motion for summary judgment on Ward’s bad faith, DTPA, and insurance code claims on the ground that it had a reasonable basis for denying Ward’s claim. Ward also responded to this motion. The trial court granted American’s second motion for summary judgment.

SUMMARY JUDGMENT

A trial court may render summary judgment only if the pleadings, depositions, admissions and affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411, 413 (Tex. 1989). A summary judgment seeks to eliminate patently unmeritorious claims and untenable defenses, not to deny a party its right to a full hearing on the merits of any real issue of fact. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931 (1952). The summary judgment rule does not provide for a trial by deposition or affidavit. The rule provides a method of summarily ending a case that involves only questions of law and no genuine fact issues. Spencer v. City of Dallas, 819 S.W.2d 612, 615 (Tex. App.-Dallas 1991, no writ).

In a summary judgment proceeding, the defendant, as movant, must either (1) disprove at least one element of each of the plaintiff’s theories of recovery, Anderson v. Snider, 808 S.W.2d 54 (Tex. 1991), or (2) plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff’s cause of action. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972). A summary judgment for the defendant disposing of the entire case is proper only if, as a matter of law, the plaintiff could not succeed upon any theories pleaded. See Delgado v. Burns, 656 S.W.2d 428, 429 (Tex. 1983). In determining whether there is a disputed material fact issue precluding summary judgment, we review the summary judgment evidence in the light most favorable to the nonmovant and resolve any doubts in the nonmovant’s favor. See Nixon v. Mr. Property Management, 690 S.W.2d 546, 548-49 (Tex. 1985).

AMERICAN’S FIRST MOTION FOR SUMMARY JUDGMENT

In Ward’s first point of error, she contends that the trial court erred in denying her motion for new trial because fact issues exist precluding American’s summary judgment. Because Ward’s underlying complaint is the granting of American’s first motion for summary judgment, we review the summary judgment evidence to determine whether American proved its entitlement to judgment as a matter of law.

*3 American predicated its first motion for summary judgment upon Ward’s failure to timely file both the notice of injury to her employer and her claim for compensation after experiencing the first distinct manifestation of her occupational disease. American alleged that Ward did not inform her employer of her illness or file her compensation claim until several years after she experienced the first distinct manifestation of her occupational disease, thus barring her compensation claim as a matter of law.

Section 4a of article 8307 of the Worker’s Compensation Act requires a claimant to give notice of injury to his or her employer or the workers’ compensation carrier within thirty days after the injury occurs or upon the first distinct manifestation of an occupational disease. See Act of June 19, 1983, 68th Leg., R.S., ch. 498, § 1, 1983 Tex. Gen. Laws 2921, repealed by Act of Dec. 13, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(10), 1989 Tex. Gen. Laws 114 (current version at Tex. Lab. Code Ann. §§ 409.001, 409.003 (Vernon Pamph. 1994)). The claimant must make a claim for compensation within one year after the injury occurs or upon the first distinct manifestation of an occupational disease. Id. The IAB may waive the strict compliance with the notice requirements upon a showing of good cause for the delay in filing such notices. Id.

Ward argues that the first distinct manifestation of her occupational disease occurred in June 1988 when the doctor diagnosed her illnesses as being related to her work and when she first learned that her symptoms were directly caused by her employment. American contends that Ward’s first distinct manifestation of her occupational disease occurred in 1983, or no later than 1986, the date Ward admitted that her illness was job-related.

Since an occupational disease occurs gradually over a period of time, the time, place, and cause of such illness is not susceptible of definite ascertainment. See Commercial Ins. Co. v. Smith, 596 S.W.2d 661, 664 (Tex. Civ. App.-Fort Worth 1980, writ ref’d n.r.e.). The first distinct manifestation of an occupational disease occurs when a claimant knew, or should have known, that she had an occupational disease. See id. at 665; Aetna Casualty and Sur. Co. v. Luker, 511 S.W.2d 587, 590 (Tex. Civ. App.-Houston [14th Dist.] 1974, writ ref’d n.r.e.) (quoting Travelers Ins. Co. v. Miller, 390 S.W.2d 284, 288 (Tex. Civ. App.-El Paso 1965, no writ)). The inquiry is an objective one. We must, therefore, determine whether the summary judgment evidence conclusively establishes that a reasonably prudent person would have recognized the existence of the disease and recognized that it was related to her employment. See INA of Texas v. Adams, 793 S.W.2d 265, 270 (Tex. App.-Beaumont 1990, no writ); Smith, 596 S.W.2d at 665.

Both parties relied upon Ward’s deposition testimony in support of, and in response to, the motion for summary judgment. In support of its summary judgment motion, American relied upon Ward’s statements that she became sensitive to cigarette smoke during her first year of employment with Southwest Airlines. Ward described her symptoms as eye, nose, throat, and skin irritations, left ear throbbing and drainage, headaches, and nausea. She also experienced fatigue, rashes, and joint pain during her first year of employment. Ward stated that by June 1986, she made a connection between her fatigue and joint pain symptoms and doing her work as a flight attendant. She further stated that she knew she was having all of the sensitivities to cigarette smoke described above by June of 1986, and she believed they were made worse or caused by her job.

*4 American argues that these statements conclusively establish that Ward suffered the first distinct manifestation of her occupational disease in 1983 when she began experiencing her symptoms. However, an employee’s admission as to when her symptoms began does not, in itself, establish the first distinct manifestation of an occupational disease. Smith, 596 S.W.2d at 664. Thus, Ward’s statements concerning her reactions to cigarette smoke is insufficient to establish the first distinct manifestation of her occupational disease.

Alternatively, American argues that Ward’s statements conclusively show that Ward suffered the first distinct manifestation of her occupational disease by 1986 because they show that Ward knew her disease was related to her employment in June 1986 and that a reasonably prudent person would have recognized by that time that the symptoms were job- related.

However, in Ward’s deposition testimony, she also stated that her symptoms did not all begin at one time, but developed gradually over time. She went to see Dr. Rea in 1986 because she was having symptoms and illnesses and did not “know what was going on.” Dr. Rea performed a number of tests and concluded that she had sensitivities to several substances, such as foods, pollens, mold, dust, and some chemicals. He gave her dietary advice, some antigens, and instructed her generally on lifestyle and taking care of herself. Dr. Rea did not tell her that her symptoms were job-related. He did not suggest that she either cut back on her work or stop flying. Ward continued working while under Dr. Rea’s care. She followed Dr. Rea’s advice and her health improved. She quit seeing Dr. Rea in the fall of 1986 because she felt better and did not feel she needed to see a doctor any longer. Ward did not seek medical treatment again until June 1988.

Although Ward experienced her symptoms getting worse when she worked, and although she believed or “knew” in June 1986 that her symptoms were caused by her job, the record shows that she sought medical advice in June 1986 and that Dr. Rea’s diagnosis did not support her beliefs. In fact, Dr. Rea’s determination shows that Ward’s sensitivities resulted from many substances to which people are exposed to on a daily basis. An ordinary disease of life is not compensable as an occupational disease. Home Ins. Co. v. Davis, 642 S.W.2d 268, 269 (Tex. App.-Texarkana 1982, no writ). We conclude that this summary judgment evidence, when viewed in the light most favorable to Ward, the nonmovant, raises a fact issue with respect to whether a reasonably prudent person in Ward’s circumstances would have continued to believe that her symptoms were job-related and that she had an occupational disease.

Further, in her affidavit filed in response to American’s motion for summary judgment, Ward stated that she did not know she had an occupational disease in 1986. She followed Dr. Rea’s comprehensive health plan, her health improved, and she felt better for a period of time. These statements directly conflict with her deposition testimony. If conflicting inferences may be drawn from a deposition and from an affidavit filed by the same party in opposition to a motion for summary judgment, a fact issue is presented precluding summary judgment. Randall v. Dallas Power & Light Co., 752 S.W.2d 4, 5 (Tex. 1988).

*5 The summary judgment evidence does not conclusively establish that the first distinct manifestation of Ward’s occupational disease occurred by 1986. We conclude that American did not meet its summary judgment burden of establishing that there was no material fact issue and that Ward’s notice of injury and compensation claim were untimely as a matter of law. Therefore, the trial court improperly granted American’s first motion for summary judgment. We sustain Ward’s first point of error. We do not reach the parties’ arguments concerning good cause because of our disposition on the timeliness issue.

AMERICAN’S SECOND MOTION FOR SUMMARY JUDGMENT

In Ward’s second point of error, she contends that the trial court erred in granting American’s second motion for summary judgment because fact questions existed precluding summary judgment.

In its second motion for summary judgment, American contended that it had a reasonable basis for denying Ward’s compensation claim because Thompson’s investigation revealed that (1) Ward had not strictly complied with the notice requirements of section 4a of article 8307, (2) Ward’s illness did not occur within the course and scope of her employment, and (3) Ward’s illness was an ordinary disease of life rather than an occupational disease. Therefore, American argued that it was not liable to Ward on her bad faith, DTPA, and insurance code claims. In support of its summary judgment motion, American relied upon Thompson’s affidavit, American’s notice of controversion, Ward’s notice of injury to her employer, the employer’s first report of injury, and the transcription of Thompson’s telephone interview with Ward.

For a worker’s compensation claimant to recover for breach of the duty of good faith and fair dealing based on a denial of her claim, the claimant must show (1) that the carrier had no reasonable basis for denying the claim and (2) that the carrier knew or should have known, at the time of the denial, that it had no reasonable basis for denying the claim. Aranda v. Ins. Co. of North America, 748 S.W.2d 210, 213 (Tex. 1988). Insurers have the right to deny invalid or questionable claims and will not be subject to bad faith liability for an erroneous denial of a claim. Id.

Ward first argues that American did not conduct a proper investigation before filing its notice of controversion with the IAB. She argues that American failed to request any medical records and failed to request an independent medical examination within the twenty days allowed for investigation. She maintains that had American conducted a proper investigation, it may have decided to begin benefits pending further investigation.

American controverted Ward’s claim on the ground that Ward failed to comply with the statutory notice requirements of section 4a. Thompson’s affidavit stated that she decided to controvert Ward’s claim based upon her telephone interview with Ward and after reviewing all documentation available to her at the time, which consisted of Ward’s statement of injury to her employer and the employer’s first report of illness. Thompson stated that these forms showed on their face the untimeliness of Ward’s notice to her employer. They showed Ward’s date of illness as April 27, 1988 and that she reported her illness to her employer in June 1988. The forms also showed that Ward had suffered from the same or similar symptoms since June 1986. These facts provided Thompson with a reasonable indication that Ward had failed to comply with section 4a by providing notice of injury to her employer within thirty days of the injury or by filing her compensation claim within one year of the injury.

*6 Additionally, during the phone interview with Thompson, Ward admitted that she had seen her doctor in June 1986 for the same symptoms listed in the statement of injury, that she had been experiencing symptoms since she began her job in 1983, that she got “sicker and sicker” from the time she began her job in 1983, and that she knew that the “breakdown” in her health was coming from her job. Thompson relied upon these statements and reasonably inferred from them that Ward had not complied with the statutory notice requirements under section 4a.

Thompson’s investigation showed that she had a reasonable basis to deny Ward’s claim as untimely. Under these circumstances, no further medical investigation was necessary.

Ward argues, however, that American continued to controvert her claim after liability became clear through Dr. Kurt’s independent medical evaluation. In determining whether an insurer acted unreasonably, we look only to the information available to the insurer at the time it made its decision to deny. Aranda, 748 S.W.2d at 212-13. Dr. Kurt’s evaluation was not before Thompson at the time she made the decision to deny Ward’s claim. Thompson made the decision to deny Ward’s claim on March 13, 1989, seven days after receiving the employer’s first report of injury from Southwest. Dr. Kurt conducted an independent medical evaluation on Ward in June 1989. We do not consider Dr. Kurt’s evaluation in determining whether American acted unreasonably in denying Ward’s claim.

Ward further argues that Thompson made misrepresentations which caused the late filing of her paperwork with the IAB. She maintains that this creates a fact issue of whether American acted unreasonably in asserting the notice defense when American itself contributed to the late filing. However, the alleged misrepresentations Ward relies upon occurred after American made its decision to deny Ward’s claim. Again, we do not consider this argument in determining whether American acted unreasonably in denying Ward’s claim. See id.

We conclude that American established that it had a reasonable basis for denying Ward’s claim. American based its denial of the claim upon Ward’s apparent failure to comply with the statutory notice and reporting requirements of section 4a. A reasonable insurer under similar circumstances would have denied Ward’s claim. Therefore, American did not breach its duty of good faith and fair dealing. Since American did not act in bad faith, American is not liable under the DTPA or insurance code. See Beaumont Rice Mill, Inc. v. Mid-American Indemnity Ins. Co., 948 F.2d 950, 952 (5th Cir. 1991). Accordingly, the trial court properly granted American’s second motion for summary judgment. We overrule Ward’s second point of error.

We reverse and remand the trial court’s summary judgment in favor of American on Ward’s worker’s compensation claim. We affirm the trial court’s summary judgment in favor of American on Ward’s bad faith, DTPA, and insurance code claims.

	Footnotes
1		The Industrial Accident Board is now known as the Texas Workers’ Compensation Commission. See Tex. Lab. Code Ann. § 401.001 et seq. (Vernon Pamph. 1994).
2		See Tex. Bus. & Com. Code Ann. § 17.41 et. seq. (Vernon 1987 & Supp. 1994).
3		See Tex. Ins. Code Ann. art. 21.21 (Vernon 1981 & Supp. 1994).