Court Concludes that Bad Faith Claim Should be Pursued in Arizona rather than Texas
The Fifth Court of Appeals has conditionally granted a writ of mandamus that directs a trial court to issue a written order vacating an earlier order that denied a comp carrier’s motion to dismiss a bad faith claim based on the doctrine of forum non conveniens. The decision, In re: Ace American Insurance Co., et al, No. 05-17-01032-CV, June 15, 2018, also orders the trial court to dismiss the claimant’s bad faith claims in his Texas suit without prejudice to refiling them.
The claimant, Doug Vates, injured his shoulder while working at a bakery in Arizona. Vates is an Arizona resident. He filed a workers’ compensation claim with the Industrial Commission of Arizona. Ace had coverage for the claim, and assigned a Dallas County resident to adjust the claim.
The Industrial Commission of Arizona ruled that Vates had suffered a permanent partial disability and authorized medical treatment for him. The Commission also stated that it would authorize permanent benefits and medical maintenance in a separate notice.
Before the Commission issued another notice, Vates sued Ace, Underwriters, and the adjuster in Texas. Vates alleged that Ace refused to pay insurance benefits in a timely manner and that its refusal breached the duty of good faith and fair dealing under Arizona law. He also claimed that Underwriters and Lee did not adequately investigate his claim and that they had decided to ignore evidence of his injury. Vates argued that this aided and abetted Ace’s breach and asked for actual and punitive damages under Arizona law.
Ace filed a motion to dismiss based on the doctrine of forum non conveniens and, when it was denied, sought mandamus relief with the Dallas Court of Appeals.
Forum non conveniens is an equitable doctrine exercised by courts to prevent the imposition of an inconvenient jurisdiction on a litigant. A trial court will exercise the doctrine of forum non conveniens when it determines that, for the convenience of the litigants and witnesses and in the interest of justice, the action should be instituted in another forum. When considering whether to apply the doctrine, a court should address several different factors that bear on where the most appropriate venue is for addressing the claimed allegations.
In this case, the court of appeals concluded that each factor weighed in favor of the suit being pursued in Arizona, rather than Texas. For example, when considering the “burden of jury duty” factor, the court wrote:
[A] Dallas County resident called to serve as a juror in a case (a) about an accident that happened in Arizona (b) to a man from Arizona (c) regarding a workers’ compensation claim filed in Arizona against (d) companies incorporated in Arizona and (e) tried under Arizona law would likely not see a relationship between the case and Dallas County, Texas.
In analyzing each factor, the court concluded that the interest of trying the case in Arizona outweighed that of trying the case in Texas. Accordingly, the court of appeals ordered the trial court to dismiss the claims against the carrier without prejudice to refiling them in Arizona.
FOLIO
