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Bradbury v. Liberty Mut. Fire Ins. Co.
August 6, 1993
Unpublished Opinion

Bradbury v. Liberty Mut. Fire Ins. Co.

Court of Appeals of Texas,

Houston (14th Dist.).

Wilbur A. BRADBURY, Appellant,



No. A14-92-00928-CV.


August 5, 1993.

On Appeal from the 333rd District Court Harris County, Trial Court Cause No. 90-61428.



ELLIS, Justice.

*1 This is an appeal from a take nothing judgment in favor of Liberty Mutual Fire Insurance Company (Liberty Mutual), appellee. Wilbur A. Bradbury, appellant, filed suit against Liberty Mutual for breach of contract and breach of the duty of good faith and fair dealing in the denial of insurance coverage. The trial court found that Liberty Mutual had acted reasonably in refusing to pay for certain surgical procedures requested by appellant and no breach had occurred. Appellant raises six points of error attacking the factual sufficiency of the evidence to support the trial court’s findings of fact two, three, four, and five; the sufficiency of detail of all of the trial court’s findings; and the trial court’s refusal to admit testimony by his attorney as to fees. We affirm.

In points of error one, two and three, appellant alleges the trial court’s findings of fact two, three and four are against the great weight and preponderance of the evidence. The trial court, in finding of fact two, found Liberty Mutual and its claims adjuster John Ledbetter (Ledbetter) acted reasonably in declining payment for a vertebrectomy, and/or lumbar fusion surgery recommended by Dr. Kao. In finding of fact three, the trial court found Liberty Mutual had a reasonable basis for declining to authorize payment for the vertebrectomy and/or lumbar fusion surgery. Finding of fact four stated the trial court found that Liberty Mutual did not fail to authorize payment for any surgery reasonably required to cure and relieve the effects of appellant’s May 1, 1984 injury.

Under the Worker’s Compensation Act, appellant had “the sole right to select or choose the persons or facilities to furnish medical aid, ... hospital services, and nursing ....” for treatment of his injury. Act of Mar. 28, 1917, 35th Leg., R.S., ch. 103, 1917 Tex. Gen. Laws 269, 271, amended by Act of May 26, 1983, 68th Leg., R.S., ch. 483, 1983 Tex. Gen. Laws 2822, 28222823, repealed by Act of Dec. 12, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01, 1989 Tex. Gen. Laws 114. Per the statute, “the association[, Liberty Mutual, wa]s obligated for such services as may reasonably be required at the time of the injury and at any time thereafter to cure and relieve from the effects naturally resulting from the injury.” Id.

As pointed out in Aranda v. Insurance Company of North America, the Workers’ Compensation Act provides a scheme of compensation based upon an agreement between the employer, employee and compensation carrier. Aranda v. Insurance Co. of No. Am., 748 S.W.2d 210, 212 (Tex. 1988). This agreement creates a special trust relationship between the employee and compensation carrier that imposes upon the compensation carrier a duty of good faith and fair dealing to the employee. Id. When an employee brings suit against a carrier for breach of the duty of good faith and fair dealing based upon an allegation that the carrier has refused to pay or has delayed payment of a claim, the employee “must establish: (1) the absence of a reasonable basis for denying or delaying payment of the benefits of the policy and (2) that the carrier knew or should have known that there was not a reasonable basis for denying the claim or delaying payment of the claim.” Id. at 213. Under this standard, carriers still have “the right to deny invalid or questionable claims and will not be subject to liability for an erroneous denial of a claim.” Id.

*2 Keeping these rules in mind, we will now address appellant’s great weight and preponderance complaint raised against the trial court’s findings. Where a complete statement of facts appears in the record, the trial court’s findings of fact are not conclusive. Valencia v. Garza, 765 S.W.2d 893, 896 (Tex. App.-San Antonio 1989, no writ).

A complaint that a finding is against the great weight and preponderance of the evidence is a factual sufficiency challenge. See M.J. Sheridan & Son Co. v. Seminole Pipeline Co., 731 S.W.2d 620 (Tex. App.-Houston [1st Dist.] 1987, no writ).

A review of the record reveals the parties stipulated at the beginning of trial that appellant was found to be totally and permanently incapacitated as of May 1, 1984, the date of his on the job injury. The parties also stipulated that this finding of total and permanent incapacity was made in a May 1989 judgment on his underlying worker’s compensation claim, and the injuries from this claim involved appellant’s neck and back.

Liberty Mutual’s claims adjuster, Ledbetter, testified that he was present at the trial of appellant’s underlying compensation claim and had been the adjuster on the file ever since the May 1989 judgment was entered. He stated that appellant’s treating physician for these injuries was Dr. Stephen Weiss (Dr. Weiss), and he was aware appellant subsequently chose Dr. Kao to assist in treating the injuries. Appellant testified that Dr. Weiss began treating him a few months after his injury on the job, ceased treating appellant after he was denied medical treatment by an accident board, and then resumed treatment of appellant in May 1988.

*3 Ledbetter testified that appellant’s file contained various records and reports which he reviewed and utilized when making the decision not to authorize payment of appellant’s requested surgery by Drs. Kao and Weiss. We will discuss the evidence in Ledbetter’s file in chronological order. On May 12, 1989, Dr. Weiss wrote a letter to Liberty Mutual informing it that appellant had a T8-9 ruptured disc, C5-6, L3-4, L4-5, and L5-S1 problems, and an evaluation of the lumbar discs would be done with discography. On May 26, 1989, the discogram was performed on appellant. Dr. Weiss made a report regarding the discogram report stating in pertinent part:

At the present time, there is interdiskal disruption at the area with leakage posteriorly at L-4, 5 and L-5, S 1 and L-2, 3 with normal noted at L-3, 4. At the present time, we will continue on nonoperative care.

Patient is a candidate for surgical consideration from L-4 to the sacrum, hemilaminectomy, diskectomy and fusion, Steppie plating, transarticular screw and possible decompressive surgery at L-2, 3. However, patient, due to multiple levels of involvement cannot be given a good prognosis. Therefore, we will continue his nonoperative care....

On June 2, 1989, Dr. Weiss wrote another letter informing Liberty Mutual that the discogram had shown four level problems at L2-3, L3-4, L4-5 and L5-S1 and that three out of the four levels were ruptured. Dr. Weiss stated, “I feel [appellant] will need some form of surgery, but unfortunately Dr. Sepulvada and I only do cases with two levels, in a case such as his we send him to a major back specialist. Apparently he has gone to see several people.” He prescribed an epidural steroid injection, Colchicine, and a continuation of appellant’s nonoperative care. He went on to state that because in the future appellant would need some form of surgery he was being sent to see Dr. Sepulvada.

On June 16, 1989, Dr. Sepulvada sent Dr. Weiss and Liberty Mutual a written evaluation of appellant’s condition based upon an examination of appellant performed on June 14, 1989, and a review of a May 3, 1989 MRI, the May 26, 1989 discogram, and MRIs of the thoracic spine and the cervical spine. In the letter, Dr. Sepulvada stated his impression was one of “degenerative disk disease at multiple levels without evidence of important weakness present at this time .... but with a suggestion of some weakness in the iliopsoas.” He recommended a myelography and a CT scan post-myolography. He stated appellant had severe degeneration at so many levels that he did not believe fusion would make appellant functional. He was of the opinion the myelography needed to be done in order to rule out the possibility that appellant might require decompression to preserve his neurological function.

Appellant was hospitalized from July 10 to July 17, 1989 at Houston Northwest Medical Center. Ledbetter testified he received a report made by Dr. Weiss on July 17, 1989 regarding appellant’s hospitalization. In the report, Dr. Weiss stated the main areas of imaging showed appellant had multiple levels of degeneration with a cervical MRI showing several problematic areas and lesions in the area of the thoracic spine. His opinion, based upon appellant’s multiple problematic areas, was that surgery would not help him with his symptoms and appellant was being sent to the Texas Pain Management Center.

*4 Dr. Sepulvada performed a consultation on appellant while he was hospitalized and sent Ledbetter a report regarding that consultation. The report, made on July 24, 1989, stated appellant appeared to be extremely functional, however, there was some degeneration with very small minimal abnormalities in the cervical MRI and evidence of small lesions in the thoracic MRI without any sacular compression. Dr. Sepulvada’s opinion was that surgical intervention was not indicated and should not be pursued. He felt there was a certain amount of psychological component to appellant’s symptoms.

On March 30, 1990, Dr. Weiss wrote Dr. Kao a letter, and sent a copy to Ledbetter. Dr. Weiss thanked Dr. Kao for evaluating appellant’s chart, and stated that he and Dr. Sepulvada felt appellant had problems concerning the cervical and lumbar spine, and the thoracic discs. Dr. Weiss offered Dr. Kao any needed information or assistance on appellant’s case.

Also on March 30, 1990, Dr. Weiss wrote a letter to Liberty Mutual regarding appellant’s treatment by Dr. Kao. Dr. Weiss stated his diagnosis of appellant was cervical and lumbar spondylosis at multiple levels. He went on to say that he was sending appellant to Dr. Kao for an opinion. Dr. Weiss explained that simply because he and Dr. Sepulvada did not feel appellant’s problems could be handled surgically, did not mean appellant was not a surgical candidate in someone else’s hands.

On May 17, 1990, Dr. Weiss sent Liberty Mutual a letter regarding the results of a MRI report. Dr. Weiss stated the MRI revealed “mild cervical spondylosis with reduction of the normal lordotic curvature,” both cervical and thoracic disc space narrowing, “minimal posterior column involvement of the thecal sac,” “osteophyte formation anteriorly and microinstability in the thoracic spine,” and “disc space bulging in the cervical spine.” His opinion was “[t]his disc space narrowing and dysfunction of the discs themselves, based on all probability, could be causing him to have spasm and pain and dysfunctional qualities such as he exhibits.” Dr. Weiss further stated that he felt appellant needed to be evaluated for disability and should be on total permanent disability. His diagnosis was that appellant had “severe traumatic arthritis, osteoarthritis, disc space narrowing and microinstability of the thoracic, cervical and lumbar spine.”

Ledbetter testified appellant had informed him sometime in June 1990 that appellant had gotten a third opinion and this doctor wanted to perform some type of surgery. He told appellant “to get something specific in writing” on what the doctors wanted to do. Ledbetter indicated he had on several previous occasions encouraged appellant to see additional doctors in the Houston Medical Center or at UTMB in Galveston but appellant had refused.

In compliance with Ledbetter’s instructions, appellant had Dr. Kao send a medical report and curriculum vitae on July 5, 1990. Appellant testified that within a day or two of receiving these documents he faxed a copy to Ledbetter and Dr. Weiss. The report stated Dr. Kao had reviewed the medical records and x-rays sent to him but had not examined appellant in formulating his opinion.

*5 Despite Ledbetter’s testimony that he never received a letter or report explaining what Dr. Kao wanted to do, Dr. Kao’s report was divided into three sections based on the cervical, thoracic, and lumbar areas of the spine and made specific recommendations for each area. As to the cervical area, Dr. Kao stated there was a moderate amount of spondylosis or arthritis involving two levels of discs with no rupture. There was no compression of the spinal cord revealed by the MRI and the cervical spinal cord appeared quite free. He suggested traction at home and 250 mg. of Naprosyn four times a day. No surgery was recommended.

As to the thoracic area, Dr. Kao stated the thoracic spine was the major problem. He found two levels, T5-T6 and T6-T7, of moderate to severe thoracic disc protrusions which were not yet extruded. He explained this type of disc is potentially dangerous since it can either get so big or convert to an extrusion and compress the spinal cord causing total paralysis of the legs, bladder, and urinary function. The MRI he was reviewing however did not clearly show the primary area of concern. Dr. Kao felt that a clear view of these two discs was crucial to his diagnosis and therefore, he requested in writing another MRI with the T5 spine at the center of the picture. He recommended that if the new MRI showed compression of the spinal cord by any one of these discs then surgery must be performed because of the potential for paralysis to the patient.

As to the lumbar area, Dr. Kao found moderate to severe spondylosis or arthritis at three levels. He stated that due to the spondylosis there is movement of the L2 vertebral body backwards over the L3 vertebral body and there appeared to be a posterior movement of the L4 on top of the L5. He also found two protruding but not extruding discs and a bulging disc which he felt was the major problem in the lumbar area. He recommended that the L2-L3 disc be removed and based upon the results of a neurological examination might recommend the removal of the L4-L5 and L5-S1 discs. He felt that when the disc is removed a lumbar fusion should be performed at the same time to cure the instability problem. He recommended fusion from the L2 disc down to the sacrum. He felt that a bone fusion technique would be preferable in appellant’s case and after the fusion recommended appellant wear a body cast for at least two months.

Dr. Kao summarized by stating the verification of spinal cord compression by the T5-T6 and T6-T7 discs was the most important step. If compression was present he recommended transpedicle anterior vertebrectomy surgery in which no laminectomy is performed. He stated that using this technique the stability of the thoracic spine could be maintained. He explained he could perform these surgeries at the Dayton General Hospital Spinal Cord Rehabilitation Center.

Ledbetter testified the fact that Drs. Weiss and Sepulvada had previously stated appellant was not a candidate for surgery, and the fact that Dr. Kao was recommending surgery without a physical examination of appellant raised a red flag in his mind. Additionally, Ledbetter, who had been a claims adjuster for three years stated he had never heard of a vertebrectomy and was not familiar with Dr. Kao or his competency. He investigated Dr. Kao’s surgical recommendation by discussing it with Liberty Mutual’s in-house nurses who looked up the word vertebrectomy in an encyclopedia and told him it meant the removal of the vertebrae from your back. Since the nurses had never heard of the procedure either, they went and looked it up in the medical dictionary. Ledbetter then discussed the vertebrectomy with his supervisor who looked over Dr. Kao’s report. He got back with appellant and asked for clarification from Dr. Kao concerning the MRI he had requested. Ledbetter also explained the seriousness of a vertebrectomy to appellant and told him it was an unheard of procedure. Ledbetter testified that at no time did he call and follow-up with any of the physicians involved because they are all very busy people who will not talk to a claims adjuster. The evidence indicated this was common practice in the insurance industry and that most communication is either on the phone with a doctor’s nurse or with the doctor in writing. However, Ledbetter did not do any follow-up or investigation by either of these procedures either.

*6 After some clarification on Dr. Kao’s requested MRI, Ledbetter testified he authorized the additional MRI to be performed. Although Ledbetter stated he never received a request for surgery from Dr. Weiss, on August 1, 1990, Dr. Weiss wrote a short letter to Liberty Mutual regarding the surgery. Dr. Weiss stated the July 17, 1990 MRI requested by Dr. Kao “revealed T5-6 and T6-7 discopathy.” He stated appellant and copies of the films were to be sent to Dr. Kao, and that he and Dr. Kao would perform surgery on appellant in Virginia. This letter makes it apparent the additional MRI had confirmed Dr. Kao’s fears regarding the thoracic spine and the surgery outlined in Dr. Kao’s report was to be performed to eliminate the potential for paralysis.

Ledbetter testified he then spoke with his claims manager and his supervisor about getting someone here in Houston to give a second opinion. He testified that getting a second opinion when a claimant requests surgery is his usual practice. However, Dr. Weiss, appellant’s treating physician, and Dr. Kao were both already recommending the surgery, so Ledbetter was in fact in search of a third medical opinion. Ledbetter set up an appointment for appellant to see a Dr. Murphy, which appellant originally agreed to keep and then subsequently decided not to attend. Ledbetter testified a review of the file, combined with the radical nature of the surgery recommended by Dr. Kao, and the fact that appellant often gave him information regarding his treatment which was not consistent with the doctors’ reports, all added up to the need for another opinion.

Ledbetter stated after he consulted his supervisor and manager they came up with Dr. Hanson as the doctor appellant needed to see. Appellant testified he was suspicious of going to Dr. Hanson but had the impression he had to go or he would not get his surgery. After the appointment was set up for August 17, 1990, Ledbetter sent Kathy Twyman (Twyman) to see appellant and take him out to dinner at Liberty Mutual’s expense. Appellant testified he was informed the purpose for this visit was to review his case and medical records, and instruct him on the rehabilitative process after surgery. He indicated Twyman encouraged him to go see Dr. Hanson. He further testified that after Twyman’s visit he was under the impression that all he had to do was go see Dr. Hanson and then his surgery would be authorized. The tenor of appellant’s testimony makes it plain he felt Twyman was sent to lure him to the appointment with Dr. Hanson by her “friendly” behavior and the free dinner.

Appellant’s testimony indicates Twyman further encouraged him to keep the appointment with Dr. Hanson by being present to meet him at the doctor’s office on August 17th with a wheel chair and care for him until the doctor was ready to see him, even though such special care was not usually provided to him on doctors visits. Appellant testified the entire examination took about fifteen minutes and then Dr. Hanson examined his reports, x-rays, and discogram for about fifteen minutes. Appellant stated he was surprised because he was used to an examination of about two hours.

*7 Ledbetter testified he received Dr. Hanson’s report made on August 17, 1990 and after reviewing it determined to deny appellant’s surgery. Dr. Hanson’s report, in direct contravention to the other reports in Ledbetter’s file which we have discussed, states “[t]here are no significant objective findings of any nature to substantiate any structural abnormality in [appellant]’s cervical, thoracic or lumbar spine as a result of his injury six years ago.” Dr. Hanson goes on to state “[t]he fact that [appellant] had not worked since that date is not explainable [and][t]he recommendations outlined by Dr. Kao are not indicated.” Dr. Hanson concluded that appellant’s “major problem appears to be of a psychological nature [and][a]s far as any treatment is concerned it should be directed in this area as opposed to any further treatment for his purported spine problems which have no objective basis.”

Ledbetter took Dr. Hanson’s statement of appellant’s problem as 100% psychological and referred back to Dr. Sepulvada’s single statement that part of appellant’s problem was psychological. He indicated these two statements combined with his other concerns discussed above led to his determination that the surgery requested by Dr. Kao was not reasonable and necessary. After making his decision, Ledbetter requested the Worker’s Compensation Commission to hold a hearing on the case and render an opinion. The Worker’s Compensation Commission recommended appellant go see another doctor here in Houston for a fourth opinion, however, none of the doctors they suggested took compensation cases anymore. Appellant testified his attorney got three more names from the board and two of these doctors no longer took compensation cases and the other one was a neurologist and not a surgeon of any kind. After being given six useless names, appellant decided to wait and see what the lawsuit decided.

During the pendency of this litigation appellant has continued to request the surgery. Dr. Weiss, appellant’s treating physician, has also continued to recommend that Liberty Mutual pay for appellant to see Dr. Kao for proper evaluation and treatment of his injuries. Dr. Kao has physically examined appellant and reconfirmed that his recommendations are appropriate. Both doctors still feel appellant’s condition is real, and the longer treatment is withheld the more appellant’s condition will deteriorate. However, despite its continuing duty to provide medical benefits to appellant, to Liberty Mutual has continued to deny payment for the surgery based on Dr. Hanson’s report.

Dr. Hanson’s report standing alone would not be sufficient evidence to support a reasonable basis for denying appellant’s requested surgery. However, Dr. Hanson’s report and Dr. Sepulvada’s lone statement, coupled with the radical nature of the surgery and Ledbetter’s other concerns consitutes some evidence that Ledbetter had a reasonable basis for declining to authorize payment for the requested vertebrectomy and/or lumbar fusion surgery. Although Ledbetter’s investigation was limited and Dr. Hanson’s determination is based upon the somewhat unreasonable diagnosis that appellant had absolutely no injuries, we may not sit as the thriteenth juror. The trial court, and not this court, was the sole judge of the credibility of the witnesses and the weight to be given to their testimony. The trial court found Ledbetter and Liberty Mutual acted reasonably and there was a reasonable basis for denying payment of appellant’s surgery. We cannot say at the time this decision was made by Ledbetter these findings are clearly wrong and manifestly unjust.

*8 Unfortunately for appellant many of Ledbetter’s other concerns were alleviated after the request for surgery had already been denied and suit had been filed. Dr. Kao has now conducted a physical examination of appellant and reiterated his findings, he has plainly stated the surgery is required to cure and relieve the effects resulting from the injury, it is now apparent that Dr. Kao is a competent physician and that the surgery he proposes is not unheard of but simply complicated. Further, appellant’s counsel has filed a motion to expedite with this court accompanied by an affidavit from Dr. Weiss, appellant’s treating physician. Although we recognize this motion is not evidence in the case, Dr. Weiss’ affidavit makes it clear he now believes appellant’s condition is deteriorating and surgery should be performed in order to prevent the possibility of paralysis and quadriplegia to appellant. This information strongly supports appellant’s allegation that the surgery is reasonable and necessary. This information, however, was not before Ledbetter when he made his original decision to deny payment of the surgery and we cannot impute it to him in making our decision. Our review of the record reveals appellant is in a much better position at this time to re-request the surgery and a different result should obtain. We overrule appellant’s points of error one, two and three.

In point of error four, appellant alleges the trial court’s finding of fact number five was against the great weight and preponderance of the evidence. The trial court’s finding of fact number five states appellant did not sustain any damages as a result of Liberty Mutual’s performance or non-performance of its duties to provide future medical benefits pertaining to his May 1, 1984 injury.

The trial court’s finding of fact number five was based upon its failure to find any breach of the duty of good faith and fair dealing or breach of contract on the part of Liberty Mutual and Ledbetter. Due to our disposition of appellant’s first three points of error, we overrule appellant’s point of error four.

In point of error five, appellant contends the trial court failed to file sufficiently detailed findings of fact upon which to draw its conclusions of law. The trial court filed five findings of fact and two conclusions of law in this case. A trial court is generally required to make findings only on the ultimate, controlling, and material issues in a case. See Kansas City S. Ry. v. Catanese, 778 S.W.2d 114, 118 (Tex. App.-Texarkana 1989, writ denied). Although the trial court’s findings are not very detailed, they address the ultimate, controlling, material issues in this case. The trial court’s findings are sufficient. We overrule appellant’s point of error five.

In point of error six, appellant contends the trial court erred when it sustained Liberty Mutual’s objection to the proffered testimony of Mark E. Sandridge (Sandridge), appellant’s attorney, regarding his fees. Appellant alleges Sandridge should have been allowed to testify even though he was designated after the trial court’s docket control deadline for the designation of expert witnesses had passed.

*9 Based on our disposition of appellant’s points of error one, two and three, we need not address this point of error. However, we do agree with appellant that the trial court’s discretion to set dates by which expert witnesses must be designated, does not alter the fact that parties, under the rules, may supplement their designation of experts up until 30 days before trial without any requirement of a showing of good cause. See TEX. R. CIV. P. 166b(6), (6)(b). We overrule appellant’s point of error six.

Liberty Mutual raises a single cross-point of error complaining the trial court erred in admitting appellant’s exhibits 5, 6, 8, 9, 10, 12, and 13 and Dr. Weiss’ exhibits 7, 8, 11 and 17. Liberty Mutual alleges these documents and medical reports are all hearsay, did not fall into any exception to the hearsay rule and were improperly admitted over objection.

Appellant established these documents fell into the business records exception to the hearsay rule and the trial court admitted them on that basis. We overrule Liberty Mutual’s crosspoint of error.

The judgment of the trial court is affirmed.


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