Mental Anguish Claim And Worry

Any Dallas insurance attorney can tell you that mental anguish can be a part of an insurance bad faith claim. The key to keep in mind is the evidence necessary to show a person eligible to recover for mental anguish.
This was explained in part by the 1996, Texas Supreme Court case styled, Saenz v. Fidelity & Guaranty Insurance Underwriters.
In Saenz, Corina Saenz sued her employer’s workers compensation insurance company for wrongfully inducing her to settle her claim. Saenz recovered actual damages for future medical costs, damages for mental anguish, and punitive damages.
Saenz fell over a chair at work and hit her head on the floor. She was hospitalized for several days and after being released, she saw numerous doctors for chronic headaches, drowsiness, seizures, and other ailments. Her diagnosis was that she had post concussion syndrome which might require indefinite medical treatment. Fidelity promptly began paying her weekly wage benefits and medical bills. During the next year, adjuster Armstrong, had many conversations with Saez to settle her claim. Saenz repeatedly emphasized that her primary concern was that her medical bills be paid for the rest of her life. This was a benefit she was entitled to but Armstrong never told Saenz she was entitled to this benefit, instead telling her that the benefits would cover medical expenses for only five years.
After settling, Saenz called Fidelity and asked for copies of medical records. They were sent but by accident included two letters from Fidelity’s attorneys indicating the claim was “very serious” and that “the limitation of five years medical on this case will be very important” because the carrier avoided “the possibility that this lady’s condition could deteriorate and eventually result in a condition of imbecility which would cause” the carrier to pay statutory lifetime compensation benefits in addition to lifetime benefits. Saenz says she learned this for the first time upon reading the letters.
Saenz then sued Fidelity for bad faith and violations of the Texas Insurance Code and the Texas DTPA. She also sued the adjuster personally for fraud. She did not sue for rescission of the settlement agreement. The jury found in her favor by awarding $250,000 for past and future mental anguish among other damages.
The Texas Supreme Court ruled Saenz’s sole remedy for loss of medical benefits was rescission. Saenz did not adduce any evidence of mental anguish. A person who is fraudulently induced to settle a workers compensation claim has as their sole remedy, rescission of the settlement agreement and reassertion of the compensation claim.
The evidence regarding mental anguish did not arise to the level sufficient for damages. Saenz testified that she worried a lot, that she worried she was going to lose her house, and that she could not afford medical bills. This evidence was insufficient.
The courts have ruled that “mere worry and vexation” is not sufficient to justify recover of mental anguish damages. An experienced Insurance Law Attorney would be able to discuss the elements necessary to recover mental anguish damages.