Is this operating in bad faith? What do I do now?

Yes she can do that. Consult an attorney as soon as possible.

Is there any kind legal action we should pursue?

Consult a workers compensation attorney as soon as possible.

How do I go about filing a suit against wrongful median driver ?

Consult a personal injury attorney in Texas.

Are there any good malpractice attorneys who a person could depend on?

Yes, use the tool and talk to a few. It may be difficult to find one under these circumstances but they exist.

What should my next steps be? contact the opposing side attorney or obtain a lawyer?

Obviously get an insurance policy and consult an attorney.

HOA can issue fines and give notices. Document all efforts to remedy the problem.

Looking for an attorney that is competent, aggressive, knows what they are doing. Not thinks they know what they are doing!

Use the tool and talk with a few attorneys. Hire the one you like the best.

Drop the claim or does it transfer to another state?

Find and consult with an attorney who handles these cases.

Selected as the best answer

Can I file a suit against him for slander and defamation of character by calling me an "aggressive black woman" three times?

Sounds like an opinion. Maybe offensive but not actionable.

Is it worth to pursue compensation, lawsuit?

Sounds like a bad experience but the limited damages described would not justify the expense in this case.