dissenting.
I respectfully dissent.
The Texas Supreme Court has imposed a duty on the part of workers’ compensation carriers to deal fairly and in good faith when processing claims brought by injured employees. Aranda v. Ins. Co. of North America, 748 S.W.2d 210 (Tex.1988). Were it not for such a duty, employees with disabling injuries would have no immediate recourse when a carrier makes an arbitrary and otherwise indefensible decision to delay payment or to refuse to pay a valid claim. By virtue of the Legislature’s mandate that political subdivisions provide workers’ compensation coverage to their employees, our public servants are promised insurance against the economic calamity of disabling injuries, and they are guaranteed that their claims will be dealt with fairly and in good faith. Or so it would seem. In the majority’s view, if the political subdivision, in its discretion and for reasons promoted solely by its own self-interest, chooses to be self-insured, then sovereign immunity shields the political subdivision from tort liability. Employees are left out in the cold. This should not be the law in the state of Texas.
In deciding that the doctrine of sovereign immunity excuses the City of Galveston from dealing fairly and in good faith with its injured employees, the majority explains that, for better or worse, the Legislature has seen fit to shield a municipality from tort liability when the city is performing a “governmental” function. Conversely, the doctrine of sovereign immunity would not protect the City from torts committed while performing a “proprietary,” or discretionary, function. In reality, both governmental and proprietary functions may be involved in fulfilling the requirement that cities “become either self-insurers, provide insurance under workmen’s compensation insurance contracts or policies, or enter into interlocal agreements with other political subdivisions providing for self-insurance, extending workmen’s compensation benefits to their employees.” Tex.Rev.Civ. StatAnn. art. 8309h § 2(a) (Vernon Supp. 1992). Although providing employees with workers’ compensation insurance is mandated by law, the State allows a city three options on how to fulfill the requirement. This discretionary aspect of the requirement is particularly significant, for if a city chooses to purchase coverage from an insurance company, its employees enjoy the protection afforded workers in the private sector, protection the supreme court imposes on the insurer “because of the disparity of bargaining power and the exclusive control that the insurer exercises over the processing of the claims[.]” Aranda, 748 S.W.2d at 212-13. However, under the majority’s reasoning, if the city elects to become self-insured, its injured employees forfeit any rights or remedies when such an insurer deals with them in bad faith or refuses to timely honor their legitimate claims. I believe that when a city elects to take on the role of insurer of its employees, it is acting in a proprietary capacity and it should not be able to shed its duty of dealing with the employees fairly and in good faith. While normally immune from tort liability resulting from an employee’s work-related injury, a city should be as liable to the employee as any other third-party tortfeasor when and if the city chooses to occupy a second capacity that imposes obligations independent of those conferred upon it as an employer. See Davis v. Sinclair Refining Co., 704 S.W.2d 413 (Tex.App. — Houston [14th Dist.] 1985, writ ref’d n.r.e.) (Sears, J., dissenting). Robert Jackson’s case illustrates why, as a matter of public policy, we must adopt such a doctrine of “dual capacity” so that public servants are not denied the same protection as private employees. Consequently, I would reverse the trial court’s judgment and allow Mr. Jackson the same opportunity to litigate his claim of bad faith as would be allowed an employee who does not work for a self-insured municipality.