Henry v. Dillard Department Stores, Inc.

In this case, Carol Ann Henry sought payment of workers’ compensation medical benefits related to a back injury allegedly sustained while working at a Dillard’s store. Dillard, which was self-insured, denied Henry’s claim because it was not job-related and notified the Texas Workers’ Compensation Commission of its decision. Nevertheless, Dillard paid Henry benefits without admitting the validity of the claim. The dispute over the compensability of Henry’s claim has never been resolved before the Commission.

Two years later, Henry and her husband filed this suit in district court against Dillard and its adjuster, Pulaski Adjusting Co., alleging a bad faith denial of reasonable and timely workers compensation benefits. Dillard moved for summary judgment, arguing that the bad faith suit was barred because Henry had failed to exhaust her administrative remedies. The trial court granted Dillard’s motion for summary judgment, and the court of appeals affirmed. Henry v. Dillard Dept. Stores, Inc., 21 S.W.3d 414 (Tex. App.-San Antonio 2000).