Benefit Trust Life Insurance Co. v. Littles
Leslie Littles and the City of Victoria sued Benefit Trust Life Insurance Company for bad faith in handling a medical claim for Littles, an employee of the City. Littles was severely burned, and Benefit Trust, the administrator of the City's self-funded health plan, refused to pay a substantial portion of his medical bills, citing 'prevailing fee' limitations. The jury found Benefit Trust liable under the Texas Insurance Code and for breach of contract, awarding actual damages, statutory damages, and attorney fees to both Littles and the City. On appeal, the court affirmed Littles' standing as a third-party beneficiary and upheld the jury's findings on unfair practices and bad faith. However, the appellate court ruled that prejudgment interest could not be trebled under the Insurance Code, necessitating a modification of the damage and attorney fee awards. Ultimately, the motions for rehearing were denied, and the judgment was affirmed in all other respects with modified financial awards.