Mann v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 13 September 1983
• Docket Number: Nos. 52672,53770,s. 52672
• Citation: 1983 OK 84,669 P.2d 768
• Parties: Marvin D. MANN, Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner, v. Honorable Ronald N. RICKETTS, Judge of the District Court of Tulsa County, Fourteenth Judicial District, Oklahoma, and, Marvin D. Mann, Respondents.
• Court: Oklahoma Supreme Court

Page 768

669 P.2d 768

1983 OK 84

Marvin D. MANN, Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner, v. Honorable Ronald N. RICKETTS, Judge of the District Court of

Tulsa County, Fourteenth Judicial District,

Oklahoma, and, Marvin D. Mann, Respondents.

Nos. 52672, 53770.

Supreme Court of Oklahoma.

Sept. 13, 1983.

Appeal filed by insurer from partial summary judgment entered in favor of insured for breach of insurance contract. District Court of Tulsa County, Honorable Ronald N. Ricketts. Companion case, original action seeking prohibition, consolidated for disposition of original proceedings. Trial court's judgment is final judgment as to damages and liability.

Writ of Prohibition Issue to Prohibit Further Proceedings in Case No. 53,770. Parties Directed to Brief Issues in Appeal in Case No. 52672.

Thomas L. Palmer, Tulsa, for appellant State Farm.

John L. Osmond, Whitten, McDaniel, Osmond, Goree & Davies, Tulsa, for appellee.

Patrick E. Carr, Carr & Carr, Tulsa, for respondents.

PER CURIAM:

State Farm Mutual Insurance Company (hereafter defendant or insurer) appeals from a judgment entered for appellee Marvin Mann (the plaintiff below and hereafter designated as plaintiff) in the sum of $8,822.00 for breach of an insurance contract. In a companion case defendant applies for a writ of prohibition to prevent the trial court from further proceedings on the issue of tortious breach until the appeal is decided. We consolidate these two actions for disposition of the original proceedings.

Before considering the question of our jurisdiction to hear the appeal, we review the pertinent facts. Plaintiff sued State Farm Mutual Insurance Company for recovery under an insurance policy because of the alleged theft of his vehicle. Defendant insurer admitted the existence of a contract of insurance but denied coverage, alleging plaintiff had sold the car, put the buyer in possession, and delivered the keys and bill of sale in return for a personal check (later returned because of insufficient funds). Defendant argued that such a transaction did not constitute a theft under the policy, and in fact, was specifically excluded as a conditional sale or sales agreement. Plaintiff later amended his petition, adding a second "cause of action" against defendant for bad faith refusal to pay.

The trial court granted plaintiff's motion for partial summary judgment as to liability, determining that the loss was a theft under the policy. On its own motion the court went on to try the issue of plaintiff's damages under the contract and entered judgment.

In presenting an appeal from a judgment which resolves fewer than all issues in the case below, defendant insurer requires us to consider whether this judgment is final and therefore ripe for appeal. Further, we must determine whether it is appropriate for our Court to prohibit the trial court from determining the issue of bad faith refusal to compensate its insured until the appeal has been decided on the merits. We stress at the outset that because this case arose before the new civil procedure rules were promulgated, effective January 1982, our decision rests on prior case law and the former Rule 13 of the Rules for the District Courts of Oklahoma, 12 O.S.1971, Ch. 2, app.

The problem of what constitutes a final judgment or order has been a perplexing one both in federal and state courts. See, e.g., Kasishke v. Baker, 144 F.2d 384 (10th Cir.1944). Justice Black's complaint about the ambiguity in the federal rules is equally applicable to state rules of civil procedure: "[whether a ruling is final] is frequently so close a question that decision of that issue either way can be supported with equally forceful arguments, and ... it is impossible to devise a formula to resolve all marginal error coming within what might well be called the 'twilight zone' of finality. Because of that difficulty this court has held that the requirement of finality is to be given a 'practical rather than a technical construction.' " Gillespie v. U.S. Steel Corp., 379 U.S. 148, 149, 85 S.Ct. 308, 309, 13 L.Ed.2d 199 (1964).

Because of the judiciary's concern for practicality, many inroads have been made towards changing the rule at common law which allowed no appeal except from a final judgment. At common law a final judgment was defined as one disposing of all of the issues as to all of the parties. Green, Basic Civil Procedure; Collins v. Miller, 252 U.S. 364, 40 S.Ct. 347, 64 L.Ed. 616 (1920); Reams v. Tulsa Cable Television, Okl., 604 P.2d 373 (1979). The advantage of the common law rule was expressed by Justice Frankfurter in Cobbledick v. U.S., 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940): "To be effective, judicial administration must not be leaden-footed. Its momentum would be arrested by permitting separate reviews of the component elements in a unified cause."

Yet while federal and state rules of civil procedure reflect an awareness of Justice Frankfurter's concern over piecemeal litigation, they also provide for practical exceptions to the harshness of the common law rule. The federal rules, for example, did not relax the final judgment rule but they did achieve a kind of compromise between the Black and Frankfurter views of establishing the individual claim as the unit of litigation for appellate purposes rather than the entire lawsuit. Fed.R.Civ.P. 54(b); Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 76 S.Ct. 895, 100 L.Ed. 1297 (1956).

In Reams v. Tulsa Cable Television, Inc., supra, we discussed the Oklahoma exceptions to the general rule that summary adjudication of less than all issues is beyond the reach of review: (1) interlocutory orders appealable by right [12 O.S.1981, § 952(b), (a) and § 993; Part II(a) and II(c) Rules on Perfecting a Civil Appeal, 12 O.S.1981, Ch. 15, App. 2]; (2) orders certified for appeal ¹ by the trial court in advance of final judgment [12 O.S.1981, § 952(b); Part II(b), Rules on Perfecting a Civil Appeal, 12 O.S.1981, Ch. 15, App. 2]. ² Reams' primary concern was whether a partial summary judgment (in Reams a determination of the issue of agency in an action over an automobile collision) could be appealed. We determined that such a summary disposition of a portion of a cause of action could not properly be appealed.

It should be emphasized at this point that the disposition of but a portion of a single cause of action is not a judgment at all ³ but an interlocutory summary adjudication, a limitation on the issues to be tried ⁴, subject to alteration or modification by the trial court before final judgment. In using the order the trial court retains full power to make one complete judgment as to all facets of the action. An interlocutory summary adjudication does not constitute an appealable order. ⁵ Thus, an order or "judgment" that disposes merely of a portion of a cause of action is not appealable unless it falls within one of the statutory exceptions discussed in Reams.

Though the term is generally misused, the partial summary judgment does exist. A partial summary judgment is akin to a true judgment, i.e., it disposes of an entire cause of action and is therefore appealable. ⁶

In deciding our jurisdiction, then, we must examine whether the judgment appealed from (denominated by the parties and the trial court as a partial summary judgment) is a final judgment as to an entire cause of action, and thus immediately appealable, or simply an order specifying that the issue of breach of the insurance contract was not in controversy, and thus an interlocutory, non-appealable order.

In order to resolve whether the trial court determined an entire cause of action ⁷ or simply a portion thereof, it is necessary to look to the case where our Court established the existence of an action in tort for breach of an insurance contract. Christian v. American Home Assurance Co., Okl., 577 P.2d 899 (1977) ⁸. Christian, in creating an action in tort for a bad faith refusal to compensate the insured, did not hold that simple breach of an insurance contract and bad faith breach are separate causes of action which may be brought separately. Rather, Christian held that under the unique circumstances of the case, i.e., the existence of fraudulent concealment, the defendant was estopped by his own conduct from relying upon a former judgment as a bar to an action for tortious breach. Christian, then, while adopting the tort in Oklahoma, also suggested that except in situations where fraud, deception, or wrongful concealment has occurred, the actions must be brought together.

"It is an elementary rule that a cause of action cannot be split or divided and made the subject of several suits, but that plaintiff must include in one action all the various items of damage he has suffered from defendant's wrong. [citations omitted]

"This rule exists primarily to protect defendant from vexatious litigation. As the rule is for the defendant's protection, he may waive its benefits, either expressly or impliedly. Empire Oil & Refining Co. v. Chapman, 182 Okl. 639, 79 P.2d 608 (1938). Aetna Cas. & Surety Co. v. Associates Transports, Inc., Okl., 512 P.2d 137 (1973)." p. 905.

Christian contemplated that as a general rule the action in tort and the actions in contract would be brought together, arising as they do from the same transaction. Oklahoma has adopted the general rule that a cause of action includes all theories of recovery or types of damages stemming from one occurrence or transaction (in the instant case the refusal of defendant insurer to pay plaintiff). Retherford v. Halliburton Company, Okl., 572 P.2d 966 (1977).

We subscribe to the general rule that an appeal will not lie from the trial court's determination of breach of an insurance contract when the rest of the cause of action has not yet been tried. Despite our belief that adherence to this rule will result in...