Henry v. Dillard Department Stores, Inc.
Carol Ann Henry and James S. Henry appealed a summary judgment in favor of Dillard Department Store, Inc., and its adjuster, Pulaski Adjustment Company. Mrs. Henry sustained a back injury during employment in February 1994 and sued Dillard for alleged unreasonable denial or delay of workers’ compensation benefits, asserting claims for breach of good faith, Texas Insurance Code violations, and breach of contract. Dillard initially denied coverage, leading to delayed testing and surgery for Mrs. Henry's cauda equina diagnosis. The key legal question was whether the Henrys needed to exhaust administrative remedies with the Texas Workers Compensation Commission (TWCC) before bringing their bad faith suit. The appellate court affirmed the trial court's judgment, ruling that exhaustion of administrative remedies was required given no evidence of Dillard's misconduct causing an independent injury.