Rednour v. JC & P PARTNERSHIP

• Decision Date: 05 November 1999
• Docket Number: No. 92,673.,92,673.
• Citation: 2000 OK CIV APP 10,996 P.2d 487
• Parties: Delbert Glenn REDNOUR, Jr., Plaintiff/Appellant, v. JC & P PARTNERSHIP, d/b/a Hampton Woods Capitol Investors, Defendant, and Acceptance Insurance Company, Defendant/Appellee.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

996 P.2d 487

2000 OK CIV APP 10

Delbert Glenn REDNOUR, Jr., Plaintiff/Appellant, v. JC & P PARTNERSHIP, d/b/a Hampton Woods Capitol Investors, Defendant, and Acceptance Insurance Company, Defendant/Appellee.

No. 92,673.

Court of Civil Appeals of Oklahoma, Division No. 1.

November 5, 1999.

Certiorari Denied January 11, 2000.

Roger R. Williams, Donald B. Bolt, III, Williams & Bolt, Tulsa, Oklahoma, For Plaintiff/Appellant.

Ray Wilburn, Wilburn, Masterson & Smiling, Tulsa, Oklahoma, For Defendant/Appellee.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

OPINION

ADAMS, Judge:

¶ 1 After he was injured in a fall in the common area of Hampton Woods Apartments, which were owned and operated by JC & P Partnership, d/b/a Hampton Woods Capitol Investor (Insured), Delbert Glenn Rednour, Jr. (Rednour) asked Acceptance Insurance Company (Insurer) to pay medical expenses incurred as a result of that fall under the medical expenses provision of the Businessowner Liability insurance policy issued by Insurer to Insured. When Insurer did not pay those expenses as quickly as Rednour believed was appropriate, he filed an action against Insured for negligence and against Insurer for breach of the duty of good faith and fair dealing (the bad faith claim) and requested actual and punitive damages.

¶ 2 Insurer filed a summary judgment motion, admitting that Rednour was entitled to payments under the medical expenses provision, but arguing, inter alia, that it had no duty of good faith and fair dealing to him because he was not a party to the insurance policy issued to Insured. Following a response from Rednour and additional briefing by both parties, the trial court concluded that, as a matter of law, Rednour could not bring the bad faith claim against Insurer because he lacked the proper status vis a vis the contract under Oklahoma law. Accordingly, the trial court granted Insurer's motion and entered judgment in favor of Insurer against Rednour on the bad faith claim.¹

¶ 3 The material facts are undisputed. The controversy in this case turns on the legal question whether Rednour, whose injuries are undisputedly covered by the medical expenses provision of Insured's liability policy, may bring an action against Insurer for breach of its implied duty of good faith and fair dealing. This precise issue has never been addressed by our courts. However, other cases involving insurance proceeds lead us to conclude that we must focus on the contracting parties' primary intent in order to determine if Insurer had a duty of good faith and fair dealing toward Rednour.

¶ 4 Roach v. Atlas Life Insurance Company, 1989 OK 27, 769 P.2d 158, required the Court to consider whether a named beneficiary of a life insurance contract might have a bad faith claim against the life insurer. Holding that such a claim was possible, the Court specifically rejected the argument urged here by Rednour that because the insurance proceeds were payable directly to him under the medical expenses provision, he could pursue a bad faith claim. According to Roach, 1989 OK 27, ¶ 8, 769 P.2d at 161, "the insurer's duty to deal fairly and act in good faith is limited. It does not extend to every party entitled to payment from insurance proceeds. There must be either a contractual or statutory relationship between the insurer and the party asserting the bad faith claim before the duty arises." ¶ 5 Roach also applied the provisions of what is now 15 O.S.1991 § 29 and determined that the life insurance contract was made "expressly" for the benefit of the beneficiary and was therefore enforceable by the beneficiary. Most significantly, the Court concluded that "[t]he failure to afford a cause of action for bad faith to the beneficiary of a life insurance policy would negate a substantial reason for the insured's purchase of the policy — the peace of mind and security which it provides in the event of loss." Roach, 1989 OK 27, ¶ 10,769 P.2d at 162.

¶ 6 Gianfillippo v. Northland Casualty Company, 1993 OK 125, ¶ 10, 861 P.2d 308, 309, reinforced Roach's holding that the insured's reason for purchasing the insurance policy determines if the required contractual relationship exists, not the entitlement to payment of insurance proceeds.

Third-party beneficiary status was found in Roach v. Atlas Insurance Company. There, the named beneficiary in a life insurance policy was allowed to pursue a bad faith claim against the insured [sic]. But Walker's [driver] insurance policy was not made for the express benefit of Gianfillippo [passenger]. The policy was intended for the protection of the insured. It benefitted Gianfillippo only incidentally. Gianfillippo was merely a third-party claimant who lacked standing to bring a bad faith claim.

¶ 7 Despite the fact that the motor vehicle liability policy covered Gianfillippo's injuries as a passenger in an insured vehicle, her entitlement to those insurance proceeds did not give her the contractual relationship required by Roach to bring a bad faith action. Instead, to make that determination, the Gianfillippo Court, applying § 29, considered only the insured's intent for purchasing the liability policy.

¶ 8 This approach is also consistent with cases interpreting § 29. Applying § 29 to decide whether the future homeowners were third-party beneficiaries and could enforce the contract between the builder and an architect, Keel v. Titan Construction Corporation, 1981 OK 148, ¶ 5, 639 P.2d 1228, 1231, held:

It is not necessary that the party be specifically named as a beneficiary but only that the contract be made "expressly for the benefit of a third person" and "expressly" simply means "in an express manner; in direct or unmistakeable [sic] terms; explicitly; definitely; directly." . . . It is the intention of the parties to the contract as reflected in the contract which must provide the answer to the question of whether the contracting parties intended that a third person should receive a benefit which might be enforced in the courts. (Citations omitted).

¶ 9 Townsend v. State Farm Mutual Automobile Insurance, 1993 OK 119, 860 P.2d 236, upon which Rednour relies, is also consistent with this approach. The Court concluded Townsend, who was covered by the insured driver's uninsured motorist policy as a occupant in an...