Court of Appeals of Texas, Dallas.

Kenneth PRUITT, Appellant,

v.

UNITED CHESTER INDUSTRIES, INC., The Home Insurance Co., and Highlands Insurance Co., Appellees.

No. 05-98-01013-CV.

|

Aug. 28, 2000.

Before Justices JAMES, OVARD,¹ and ROACH.

OPINION

JAMES

*1 Appellant Kenneth Pruitt appeals a summary judgment in favor of United Chester Industries, Inc. (United), The Home Insurance Co. (Home), and Highlands Insurance Co. (Highlands). In this bad-faith workers’ compensation case, Pruitt brings two points of error arguing the trial court erred in granting summary judgment to: (1) Home and Highlands for breach of a duty of good faith for failing to timely and properly investigate appellant’s claim; and (2) United for breach of fiduciary duty for tortious interference with prospective economic advantage. For the reasons set forth below, we affirm the judgment of the trial court.

Background

Kenneth Pruitt was injured on March 3, 1995 in a fall from a piece of equipment while performing welding services for Halliburton Energy Services (Halliburton). He was a regular employee of United, but was on loan to Halliburton through an agreement between United and Halliburton. Halliburton’s employees filled out an accident report on the date of the accident. That day Pruitt informed the vice-president of United, David Osborne, that he had been injured. However, Pruitt told Osborne he would “rest up” over the weekend to see how he felt. Although Pruitt thought he may have had broken ribs, he did not think a doctor could do anything for him.

Over the next three weeks, Pruitt continued to work at United. He then left the employ of United and began work for Ingersoll-Rand (Ingersoll). He passed Ingersoll’s physical but claimed it was painful. On the second day of work, while using an impact wrench, Pruitt experienced extreme pain in his left shoulder. A doctor determined Pruitt had a torn rotator cuff and there was evidence the injury occurred during the fall at Halliburton. Pruitt was informed he would need surgery and rehabilitation.

In June 1995 Pruitt notified both United and Halliburton of the injury. That same month, United advised its workers’ compensation carrier, Home, and Halliburton told Pruitt it would inform its carrier, Highlands. Additionally, in July Pruitt filed a claim with the Texas Workers’ Compensation Commission (TWCC). During processing of the claim, a question arose as to whether Pruitt was a “borrowed servant” of Halliburton’s at the time of the incident. The TWCC ultimately determined Halliburton to be Pruitt’s employer for purposes of the March 3, 1995 injury. After the final determination was made on appeal to TWCC in October of 1996, Halliburton’s compensation carrier, Highlands, paid Pruitt’s claim.

Summary Judgment

In his first and second points of error, Pruitt contends the trial court erroneously granted summary judgment in favor of United; its workers’ compensation carrier, Home; and Halliburton’s carrier, Highlands. The movant for summary judgment must show there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex.1995). A defendant who conclusively negates at least one of the essential elements of a cause of action is entitled to summary judgment on that cause of action. Id. Likewise, a defendant who conclusively establishes each element of an affirmative defense is entitled to summary judgment. Id.

*2 Once the movant has established a right to a summary judgment, the burden shifts to the nonmovant. Marchal v. Webb, 859 S.W.2d 408, 412 (Tex.App.-Houston [1st Dist.] 1993, writ denied). The nonmovant must respond to the motion for summary judgment and present to the trial court any issues that would preclude summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S .W.2d 671, 678 (Tex.1979); Marchal, 859 S.W.2d at 412. We must accept as true evidence in favor of the non-movant, indulging every reasonable inference and resolving all doubts in the non-movant’s favor. Evans, 986 S.W.2d at 75.

On appeal, we cannot consider any ground for reversal that was not expressly presented to the trial court by written motion, answer, or other response to the motion for summary judgment. See Tex.R.Civ.P. 166a(c); Clear Creek Basin Auth., 589 S.W.2d at 677. When the trial court’s judgment does not state the grounds upon which it granted the motion for summary judgment, the appellant must show that each of the independent arguments alleged in the motion is insufficient to support summary judgment. Holloway v. Starnes, 840 S.W.2d 14, 18 (Tex.App.-Dallas 1992, writ denied), cert. denied, 510 U.S. 828 (1993). We will affirm the summary judgment if any of the theories advanced in the motion for summary judgment is meritorious. See de Monet v. PERA, 877 S.W2d 352, 356 (Tex.App.-Dallas 1994, no writ).

Liability of United Chester

Pruitt contends United breached its fiduciary duty by its intentional and tortious interference with appellant’s contractual relations.² The TWCC determined Halliburton to be Pruitt’s employer for the purposes of the March 3, 1995 injury. A decision of the TWCC, after the time for appeal has passed, operates as a final judgment on parity with the judgment of a court. See Tex.Lab.Code Ann. § 410.205 (Vernon Supp.2000); Gonzales v. Texas Workers’ Compensation Fund, 950 S.W.2d 380, 383 (Tex.App.-Hous. [14th Dist.] 1997, no writ), citing Anderson v. New York Underwriters Ins. Co., 613 S.W.2d 16, 18 (Tex.Civ.App.-Texarkana 1981, writ dism’d); Moore v. Means; 549 S.W.2d 417, 418 (Tex.Civ.App.-Beaumont 1977, writ ref’d n.r.e.). Therefore, for the purposes of Pruitt’s March 3, 1995 injuries, United is not responsible; it was not Pruitt’s employer. When United was informed of Pruitt’s injuries in July of 1995, it promptly reported the injuries to its workers’ compensation carrier, Home. That was the end of United’s responsibilities. See Tex .Lab.Code Ann. § 409.005(a) (Vernon 2000)³.

Pruitt contends, however, this breach occurred outside the worker’s compensation realm. He claims United, as his regular employer, breached its fiduciary duty by its intentional and tortious interference with appellant’s contractual relations because of statements made by the vice-president of United, David Osborne.

First, Texas does not generally recognize a fiduciary duty between employers and employees. Fiduciary duties arise in confidential relationships. See Caserotti v. State Farm Ins. Co., 791 S.W.2d 561, 565 (Tex.App.-Dallas 1990, writ denied). Some of those relationships are formal, such as attorney-client, partnership, or trustee-beneficiary. See id. Some are informal, but all have in common the requirement the evidence show dealings between the parties have continued for a sufficient time to justify one party to rely on the other to act in his or her best interest. See id. Here the relationship between Pruitt and United did not rise above the normal employee/employer relationship. There was no special confidential relationship or trust. United had no such duty to Pruitt, therefore could not have breached this duty.

*3 Second, to establish the necessary elements for his claim of tortious interference with contract, appellant must show (1) that a contract existed, (2) that the defendant maliciously interfered with the contractual relationship, and (3) did so without legal justification or excuse. See Holloway v. Skinner, 898 S.W.2d 793, 95-96 (Tex.1995). A party must show there was an actual damage or loss which occurred as a result of the alleged interference. See id.

The Workers’ Compensation Act sets forth a compensation scheme that is based on a three-party agreement entered into by the employer, the employee, and the compensation carrier. Aranda v. Ins. Co. of North America, 748 S.W.2d 210, 212 (Tex.1988). The constitutionality of the Workers’ Compensation Act rests on the contractual nature of this agreement. Id. As between the compensation carrier and the employee, there is a promise for a promise: the carrier agrees to compensate the employee for injuries sustained in the course of employment, and the employee agrees to relinquish his common law rights against his employer. Id. The employee is thus a party to the contract and therefore entitled to recover in that capacity. The contract between a compensation carrier and an employee creates the same type of special relationship that arises under other insurance contracts. Id.

Thus, the only relevant contractual relationship in existence between the parties to this suit was between Pruitt and Halliburton’s carrier, Highlands. Pruitt alleges the vice-president of United, David Osborne, misrepresented the nature of Pruitt’s injuries to the TWCC and that this misrepresentation constituted tortious interference with appellant’s contract. Texas jurisprudence has long recognized that a party to a contract has a cause of action for tortious interference against any third person (a stranger to the contract) who wrongly induces another contracting party to breach the contract. See Holloway, 898 S.W.2d at 794-95.

Osborne testified at the workers’ compensation hearing he had seen Pruitt use his left arm normally during the three weeks after the incident. He also stated Pruitt told him he had injured his shoulder at Ingersoll. Pruitt denies making that statement and argues that a proper investigation would have revealed employees who were aware of his injuries. However, Osborne’s statements are irrelevant because no breach of contract occurred. The TWCC found there was an injury which occurred on March 3, 1995. Halliburton was deemed to be the employer for the purposes of the injury and its carrier, Highlands, paid Pruitt for his injuries. The relevance Osborne’s statement would have arisen only if the TWCC had determined the injury did not occur until Pruitt began working for Ingersoll, or that the injury did not occur at all. His statement could not constitute tortious interference because it did not interfere with the only relevant contractual relationship in existence in this case, that between Pruitt and Highlands. Pruitt has not raised a material fact issue to overcome United’s summary judgment motion. Therefore, we overrule appellant’s second point of error.

Liability of Home Insurance

*4 Pruitt contends Home breached its duty to act in good faith by failing to properly investigate Pruitt’s claim. As the carrier for United, Home is responsible for covering worker’s compensation claims for United’s employees who are injured on the job. Pruitt was not United’s employee for the purposes of the March 3, 1995 injury; therefore, Home had no liability for Pruitt’s injuries incurred on that date. Pruitt argues that Home acted in bad faith by not properly investigating the complaint to determine if it was responsible. The Texas Supreme Court has recognized a duty on the part of insurers to deal fairly and in good faith with their clients. See Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987). Further, the court has specifically recognized such a duty in the context of a claim for worker’s compensation benefits. See Aranda, 748 S.W.2d at 212-13. Thus, the failure of an insurer reasonably to investigate a claim by an insured can constitute a breach of the duty of good faith and fair dealing. See State Farm Fire & Cas. Co. v. Simmons, 963 S.W.2d 42, 44-45 (Tex.1998). However, a claimant who seeks to show that his insurer acted in bad faith must demonstrate that it denied or delayed payment of a claim after its liability became reasonably clear. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 55 (Tex.1997).

To uphold a finding of bad faith against an insurance carrier there must be a finding that the carrier was ultimately deemed responsible. As a general rule there can be no claim for bad faith when an insurer has promptly denied a claim that is in fact not covered. Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex.1995). Here, the TWCC determined United was not Pruitt’s employer for purposes of the March 3, 1995 injury, so of course its carrier, Home, would not be liable. Therefore, no bad faith claim can stand as to Home as a matter of law. We overrule appellant’s first point of error as to Home.

Liability of Highlands

Pruitt next contends Highlands acted in bad faith by failing to properly investigate the claim. Highlands paid Pruitt’s claim. It did so after the question of liability was resolved by the TWCC. There was a reasonable dispute as to which carrier, Home or Highlands, was liable. Halliburton informed Highlands that Pruitt was not its employee. Highlands then conducted an interview with Pruitt who again confirmed that United was his employer on the date of the accident. At the TWCC hearings, Pruitt asserted he was United’s employee and was under the control of United at the time he worked at Halliburton. Highlands was entitled to rely on appellant’s statement.

A bad faith claimant must prove that a carrier failed to attempt to effectuate a settlement after its liability has become reasonably clear. Universe Life Ins. Co., 950 S.W.2d at 55. An insurer is allowed to wait until a dispute is settled and insurer breaches its duty of good faith and fair dealing when the insurer fails to settle a claim if the insurer knew or should have known that it was reasonably clear that the claim was covered. See U.S. Fire Ins. Co. v. Williams, 955 S.W.2d 267, 268 (Tex.1997). An insurer does not breach its duty merely by erroneously denying a claim. Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 17 (Tex.1994). Evidence that shows only a bona fide dispute about the insurer’s liability on the contract does not rise to the level of bad faith. National Union Fire Ins. Co. v. Dominguez, 873 S.W.2d 373, 376-77 (Tex.1994). Pruitt failed to present any summary judgment evidence tending to raise a fact issue that Highlands’ denial of liability was the result of anything other than a bona fide dispute over which carrier was liable. Highlands relied on the statements made by Pruitt that he was United’s employee and under United’s control while working at Halliburton. A reasonable dispute arose over which carrier had liability, therefore Highlands did not act in bad faith by waiting for a proper ruling by the TWCC. We overrule appellant’s first point of error as to Highlands.

*5 We affirm the judgment of the trial court.

	Footnotes
1		Justice John Ovard was a member of the panel at the time this case was argued and submitted for decision. Justice Ovard retired from the Court on July 31, 2000. Therefore, he did not participate in the issuance of this opinion.
2		Appellant and appellees fail to clearly distinguish between two separate torts: “interference with prospective economic advantage” and “interference with contract.” Although appellant uses the term “interference with prospective economic advantage,” the argument and authorities cited by both parties reference matters dealing primarily with interference with contractual relations. Therefore, we interpret appellant’s claim as one for interference with contract. Even if appellant’s cause of action was for interference with prospective economic advantage, it would not change the results. Interference with prospective economic advantage (also called interference with business relations or interference with prospective contractual relations) requires a showing that (1) there was a reasonable probability of entering a business relationship or contract; (2) the defendant acted maliciously by intentionally preventing the relationship from occurring with the purpose of harming the plaintiff; (3) the defendant was not privileged or justified; and (4) actual harm or damage occurred as a result. Winston v. American Medical Intern., Inc., 930 S.W.2d 945, 953 (Tex.App.-Houston [1st Dist.] 1996, writ denied); Gillum v. Republic Health Corp., 778 S.W.2d 558, 565-56 (Tex.App.-Dallas 1989, no writ). Pruitt has not met the elements for this cause of action. The only relevant relationship was the one between Pruitt and Halliburton’s carrier, Highlands, and that relationship was in existence, not prospective. Statements made by United’s vice president, David Osborne, form the basis for Pruitt’s interference claim. Those statements did not interfere with the relationship between Pruitt and Highlands so no “tortious interference” occurred.
3		Section 409.005(a) of the Texas Workers’ Compensation Act states: (a) An employer shall report to the employer’s insurance carrier if: (1) an injury results in the absence of an employee of that employer from work for more than one day; or (2) an employee of the employer notifies that employer of an occupational disease under section 409.001. (b) The report under Subsection (a) must be made not later than the eighth day after: (1) the employee’s absence from work for more than one day due to an injury; or (2) the day on which the employer receives notice under Section 409.001 that the employee has contracted an occupational disease. Pruitt had not missed work at United due to this injury. He was working for Ingersoll-Rand when the need for the surgery was discovered.