Campbell v. American Intern. Group, Inc., s. 92,029

• Decision Date: 16 February 1999
• Docket Number: No. 2,92,030,Nos. 92,029,s. 92,029,2
• Citation: 976 P.2d 1102
• Parties: 1999 OK CIV APP 37 Christopher Shawn CAMPBELL, individually and as parent and next friend of Tatum Leigh Campbell, a minor; and Anna Ruth Donham Campbell, individually, Appellants, v. AMERICAN INTERNATIONAL GROUP, INC., a foreign corporation; and, AIG Europe S.A., a foreign corporation, Appellees, and Michael Stephen Muller, Defendant. Court of Civil Appeals of Oklahoma, Division
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 1102

976 P.2d 1102

1999 OK CIV APP 37

Christopher Shawn CAMPBELL, individually and as parent and next friend of Tatum Leigh Campbell, a minor; and Anna Ruth Donham Campbell, individually Appellants, v. AMERICAN INTERNATIONAL GROUP, INC., a foreign corporation and, AIG Europe S.A., a foreign corporation, Appellees and Michael Stephen Muller, Defendant.

Nos. 92,029, 92,030.

Released for Publication by Order of the Court

of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma,

Division No. 2.

Feb. 16, 1999.

Appeal from the District Court of Oklahoma County, Oklahoma; Karl R. Gray, Trial Judge.

REVERSED AND REMANDED.

Sidney A. Martin II, Carr & Carr Attorneys, Tulsa, Oklahoma, For Appellants.

Michael E. Smith Holloway, Dobson, Hudson, Bachman, Alden, Jennings & Holloway, Oklahoma City, Oklahoma, For Appellees.

OPINION

STUBBLEFIELD, P.J.

¶1 These are consolidated appeals from orders of the trial court sustaining defendants' motions to dismiss. The appeals were assigned to the accelerated docket pursuant to Okla. Sup.Ct. R. 1.36(a)(2), 12 O.S. Supp.1998, ch. 15, app. 1. Based on our review of the record on appeal and applicable law, we reverse.

¶2 This action arises out of a one-vehicle automobile accident that occurred in Bavaria, Germany, on April 28, 1996. Christopher Campbell was a passenger in a vehicle driven by Michael Muller. Muller lost control of the vehicle and, as a result, Campbell suffered injuries. At the time of the accident, both men were United States soldiers stationed in Germany. Muller's automobile liability insurance was issued in Germany by AIG Europe S.A. (AIG Europe), a French corporation.

Trial Court Proceedings

¶3 After both men returned to the United States, Campbell, a Louisiana resident, filed this action in Oklahoma naming Muller, an Oklahoma resident, and his liability insurance carrier as defendants. Consortium-related claims also were made by Campbell's wife and daughter. Plaintiffs sought damages for personal injuries, alleging that Muller drove recklessly and was intoxicated. They also alleged that, under applicable German law, AIG Europe was jointly liable with its insured, Muller, and was "amenable to suit in a direct action."

¶4 Plaintiffs attempted service by mailing a copy of the summons and petition by certified mail to AIG Europe at the New York City headquarters of its parent corporation, American International Group, Inc. (AIG). Later, Plaintiffs would add AIG as a party defendant, alleging:

AIG Europe S.A. is a wholly owned subsidiary of American International Group, Inc., a Delaware corporation headquartered in New York, and controlled by the latter through American International Underwriters [AIU], a division of American International Group, Inc., which manages its Foreign General Group of member companies. AIG Europe S.A. is an agent or instrumentality of American International Group, Inc., through which American International Group, Inc., does business in Germany, including sale of the policy issued to [Defendant] Muller.

Plaintiff would also add counts for breach of the covenant of good faith and fair dealing against both these defendants.

¶5 A considerable dispute developed over service, which we need not delineate herein. Ultimately, each corporate defendant filed a motion to dismiss. AIG based its motion on lack of in personam jurisdiction, improper venue and Plaintiffs' failure to state a cognizable cause of action. In its supporting brief, AIG asserted that it was a "holding company which has as one of its subsidiaries, AIG Europe S.A.," and that it did not (1) issue the insurance policy in question, or (2) have sufficient minimum contacts with Oklahoma to justify exercise of in personam jurisdiction. It further asserted that the action was not properly brought against it, or AIG Europe, because Oklahoma recognizes neither direct actions by an injured party against a tortfeasor's liability insurer nor actions for bad faith brought by strangers to an insurance contract. According to AIG, Oklahoma had no interest in recognizing and giving effect to German law to afford a Louisiana resident benefits that an Oklahoma resident could not obtain, and allowing Plaintiffs to bring a direct action and claim for bad faith would offend the public policy of this state. AIG attached evidentiary materials to its brief, which included copies of the German insurance policy and endorsements.

¶6 Plaintiffs objected to AIG's motion to dismiss, asserting that a substantial controversy existed as to several material facts, including whether Plaintiffs were third-party beneficiaries under the terms of the policy and thus entitled to bring a direct action, whether AIG Europe was a "mere instrumentality" of AIG and whether AIG Europe specifically had contracted to assume the obligation of defending its insured in foreign jurisdictions and had waived objections to jurisdiction and venue. Plaintiffs attached exhibits including copies of pages from AIG's and AIU's "web sites," which they claimed tended to demonstrate that corporate distinctions should be disregarded and the two entities treated as one. The trial court sustained AIG's motion to dismiss, although no formal order was entered at the time.

¶7 AIG Europe then filed its motion to dismiss, upon substantially the same grounds as those urged by AIG. In fact, it did not file a supporting brief but adopted the motion and brief of AIG, incorporating those "by reference." Plaintiffs filed a substantial response, but the trial court entered a "Final Order" in favor of each corporate defendant, sustaining each defendant's motion to dismiss "with prejudice." The orders are not detailed and do not specify any grounds for the dismissals. Plaintiffs appeal both orders. ¹

Waiver of Defenses

¶8 We first address Plaintiffs' claim of waiver of defenses by AIG Europe. Plaintiffs maintain that the trial court erred in dismissing AIG Europe from the action because the insurer failed to preserve defenses of lack of personal jurisdiction, failure to state a claim and improper venue by omitting such defenses from its original motion. Plaintiffs' argument is based on their assertion that the first motion raised only the issue of insufficient service of process. We do not agree with this contention.

¶9 AIG Europe's first appearance was denominated a "Special Appearance" and not a general one. By making such a qualified appearance, it reserved the right to later assert additional defenses. Young v. Walton, 1991 OK 20, p 4, 807 P.2d 248, 249-50; First Texas Savings Ass'n v. Bernsen, 1996 OK CIV APP 24, p 7, 921 P.2d 1293, 1296. Accordingly, AIG Europe did not waive any defenses and was not precluded from asserting, in a subsequent motion, the defenses of lack of personal jurisdiction, improper venue or failure to state a claim.

Issues Raised on Appeal

¶10 Plaintiffs' remaining allegations of error have more merit. Regarding the trial court's dismissal of AIG Europe, Plaintiffs claim: (1) The AIG Europe policy sold to Defendant Muller in Germany incorporates German insurance law by reference to define the rights and duties of the parties; (2) Under German law, an injured party is recognized as a third-party beneficiary with standing to sue a liability carrier in a direct action; (3) Under German law, the liability insurer is jointly and severally liable for any damages within policy limits, which must be paid directly to the injured party; (4) Oklahoma's choice of law rule will enforce German law; (5) Oklahoma law recognizes a cause of action for bad faith by a third-party beneficiary; and, (6) Under the terms of the policy, AIG Europe assumed a duty to defend Muller in his legal residence of Oklahoma, thus waiving objections to personal jurisdiction and venue, and may be sued as a codefendant with Muller, who made no objection to venue. Therefore, according to Plaintiffs, they may maintain an action for damages against AIG Europe, in Oklahoma, including a claim for bad faith.

¶11 As to AIG, Plaintiffs claim that the trial court erred in granting summary judgment dismissing AIG because: (1) AIG Europe is managed by American International Underwriters (AIU), a division of AIG, which is handling the claim and controlling the litigation; (2) AIG Europe's initial appearance was through Cyrial Bassett, Jr., an adjustor employed by AIU North America, Inc. (AIU); (3) AIG Europe is a mere agent or instrumentality of AIG; (4) AIG sells insurance in Oklahoma through various wholly owned subsidiaries, which also are mere agents or instrumentalities of the parent company, AIG; (5) Corporate identities may be disregarded herein and the parent company made to answer for the torts of its subsidiary; and, (6) AIG is liable for the failure to pay Plaintiffs benefits due directly to them from AIG Europe through the mishandling of the claim by its AIU division.

Standard of Review

¶12 The grounds for dismissal asserted by both corporate defendants included failure to state a claim upon which relief can be granted. However, because matters outside the pleadings were presented to and not excluded by the trial court, the motions must be treated as ones for summary judgment. 12 O.S.1991 § 2012(B). Summary judgment is appropriate only where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. Oliver v. Farmers Ins. Group of Companies, 1997 OK 71, 941 P.2d 985. Therefore, as the decision involves purely legal determinations, the appellate standard of review of a trial court's grant of summary judgment is de novo. Kirkpatrick v. Chrysler Corp., 1996 OK 136, p 2, 920 P.2d 122, 124. This court will view all inferences and conclusions to be drawn from underlying facts contained in evidentiary materials in a light most favorable to the party opposing the motion. Oliver, 1997 OK 71 at p 6, 941 P.2d at 987. If the uncontroverted facts support legitimate inferences favoring...