Barre v. State Farm Fire & Cas. Co.

• Decision Date: 07 October 2013
• Docket Number: Case No. 12–CV–0507–CVE–TLW.
• Citation: 982 F.Supp.2d 1267
• Parties: Etta BARRE, individually and as Personal Representative of the Estate of Anthony Barre, Deceased, Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Oklahoma

982 F.Supp.2d 1267

Etta BARRE, individually and as Personal Representative of the Estate of Anthony Barre, Deceased, Plaintiff,

v.STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

Case No. 12–CV–0507–CVE–TLW.

United States District Court, N.D. Oklahoma.

Oct. 7, 2013.

Mike Walter Jones, Jones Law Office, Bristow, OK, Steven M. Hightower, Tulsa, OK, for Plaintiff.

Andrew Charles Jayne, John Scott Gladd, Atkinson Haskins Nellis Brittingham Gladd & Carwile, Tulsa, OK, for Defendant.

OPINION AND ORDER

CLAIRE V. EAGAN, District Judge.

Now before the Court is Defendant's Motion for Summary Judgment and Brief in Support (Dkt. # 46). Defendant State Farm Fire and Casualty Company (State Farm) ¹ argues that it had a reasonable basis to delay payment of plaintiff's theft claim, because State Farm gathered evidence reasonably suggesting that plaintiff's claim could be fraudulent and further investigation was required before the claim could be settled. Plaintiff responds that State Farm unreasonably withheld payment on plaintiff's theft claim because there was no justifiable basis to State Farm for continue its investigation into plaintiff's theft claim.

I.

Etta and Anthony Barre owned a 2001 Chevrolet Suburban, which was insured by State Farm. Dkt. # 46–5. On May 30, 2009, the vehicle was stolen and the theft allegedly occurred sometime between 1:00 a.m. and 5:00 a.m. Dkt. # 46–3, at 12; Dkt. # 46–4, at 7. Etta Barre claimed that she returned home from a party at approximately 1:00 a.m. or 2:00 a.m. and went to bed shortly thereafter, and that her husband, Anthony Barre, observed that the car was missing when he woke up for work at approximately 5:00 a.m. Etta Barre reported the loss to State Farm on the morning of May 30, 2009. Dkt. # 46–6, at 52. State Farm opened an investigation into the claim and the matter was initially referred to Princella Young of the Special Investigative Unit Claims Resolution Team (SIUCRT). Young obtained a report from the National Insurance Crime Bureau (NICB), and the NICB report showed that the same vehicle had been reported stolen in 2004. Id. at 50. Under the NICB guidelines, this is an indicator that an insurance claim is possibly fraudulent. Dkt. # 57–6, at 4. Young sent a letter to the Barres requesting a theft affidavit and authorization to run credit reports. Dkt. # 46–8. Etta Barre gave a recorded statement on June 10, 2009, and she confirmed that her husband noticed that the vehicle was missing around 5:00 a.m. Dkt. # 46–4, at 9. She also stated that the Barres owed about $6,000 on the vehicle, but she gave conflicting statements as to the vehicle's mileage. ²

On June 23, 2009, Young contacted Etta Barre and again requested a theft affidavit and authorization for credit reports, and Etta Barre claimed that she had mailed the documents the previous week. Dkt. # 46–6, at 49. However, Young had not received the documents by June 29, 2009, and she again contacted Etta Barre to request the documents. Id.; Dkt. # 46–9. Young faxed the forms to the Barres' insurance agent, but Young noted in the claims log that the Barres' claim was proceeding slowly due to the insureds' failure to contact Young during work hours. Dkt. # 46–6, at 48–49. On June 30, 2009, Etta Barre faxed a theft affidavit to Young, but the affidavit was not signed by the titled owner of the vehicle, Anthony Barre. Etta Barre sent a fully executed copy of the theft affidavit to Young the following day. Id. at 47–48. Young also received authorizations for credit reports on June 30, 2009, and she requested credit reports for Etta and Anthony Barre. Id. The credit reports showed that both Etta and Anthony Barre had a history of late payments, and it also appeared that both Barres owed substantial amounts in installment loans.³ Dkt. # 46–10; Dkt. # 46–11. Young believed that the credit reports revealed financial issues that required further investigation, and she referred the Barres' claim to the Special Investigation Unit (SIU) for claims handling. Dkt. # 46–6, at 47.

State Farm assigned the Barres' claim to Genesis Edwards for further review, and Edwards sent a letter to the Barres to advise them that she would be handling the theft claim. On July 10, 2009, Edwards called Etta Barre to obtain more information about her credit history, and Etta Barre claimed that many of the delinquent accounts actually belonged to her daughter. Dkt. # 46–6, at 43. Edwards also spoke to Anthony Barre about his credit history, and he explained that he had made arrangements with his bank to make up late payments on a mortgage for rental property.⁴Id. He stated that he had been injured but that he had returned to work about three or four months earlier, and he claimed that he was unaware of any other inquiries listed on his credit report. Id. at 43–44. Edwards requested the Barres' banking records for the prior six months to ensure that the credit report was accurate, and Etta Barre faxed the records to Edwards on July 13, 2009. Dkt. # 46–7, at 13; Dkt. # 46–13. Edwards reviewed the bank records and could not find any payments for the rental property, and she noticed other inconsistencies with the Barres' statements on July 10, 2009. On July 14, 2009, Edwards called the Barres to go over the bank records, but Etta Barre screamed at Edwardsand hung up. Dkt. # 46–6, at 43. Edwards received a call from Anthony Barre later on July 14, 2009, and he explained that the bank had foreclosed on the rental property. Anthony Barre also stated that he had been on disability and he got behind on certain accounts, but he returned to work and banking records verified his claims that the Barres had taken care of debts listed on his credit report. Id. at 42. Edwards concluded that the Barres were making payments to creditors and that “there appears NOT to be a financial struggle” that would give rise to a suspicion that the theft claim was fraudulent. Id. at 41–42. Edwards referred the claim to the Central Total Loss Unit (CTLU) for payment. Id. at 41.

State Farm prepared drafts for the lienholder, Tulsa Teachers Credit Union (TTCU), and the Barres, and State Farm contacted Anthony Barre on July 16, 2009 to notify him of the settlement. During the conversation with Anthony Barre, he stated that he had been separated from his wife and he said “did I put my foot in my mouth....” Id. at 38; Dkt. # 46–7, at 16. Edwards spoke to her team manager, Valerie Hampton, and Edwards directed CTLU to put a hold on the payments to the Barres and TTCU. SIU determined that the residency issue had to be resolved before the payments would be issued, because Anthony Barre could have not discovered that the vehicle was missing if he did not actually live with his wife on the date of the alleged theft. Dkt. # 46–7, at 7. On July 20, 2009, Edwards spoke to Etta Barre concerning her husband's statement that the Barres were separated, and Etta Barre screamed at Edwards and hung up. Dkt. # 46–6, at 37. Edwards and Hampton discussed the Barres' theft claim and determined that it was necessary to take EUOs of Etta and Anthony Barre. Id.; Dkt. # 46–7, at 18–19. On July 22, 2009, Etta Barre called State Farm and asked to speak to Edwards' manager, and Edwards forwarded the message to Hampton. Dkt. # 46–6, at 36. Hampton spoke to Etta Barre and advised her that State Farm was requesting an EUO of Etta Barre and her husband, and Etta Barre contacted the customer service department following the conversation with Hamption. Dkt. # 46–17. Edwards contacted an attorney, Eileen Morris, and Morris agreed to conduct the EUOs sought by State Farm. Dkt. # 46–6, at 35. On July 23, 2009, Edwards also called Anthony Barre to clarify certain matters on his credit report, but he claimed to be unaware of any credit problems and he ended the call without answering Edwards' questions. Id. at 34. Etta Barre called back about five minutes later and “got excited exclaiming she has never been treated this way and hung up again.” Id.

Edwards sent a letter advising the Barres that Morris would be conducting their EUOs on behalf of State Farm. Morris attempted to contact the Barres and she was able to speak to Anthony Barre. Dkt. # 46–19. Morris advised him that he could retain an attorney for the EUO and that he would need to bring certain documents to his EUO. Id. at 32. Anthony Barre also stated that he was separated from his wife and he was staying with his father. Id. Morris suggested possible dates for the EUOs and she selected a date based on the information provided by Anthony Barre. Id. The EUOs were scheduled for August 10, 2009, but neither of the Barres appeared. Dkt. # 46–6, at 31. Etta Barre claimed that she did not receive a letter from Morris about the scheduling of an EUO. Dkt. # 46–20. Morris made additional attempts to reschedule the EUOs of Etta and Anthony Barre, but they would not return Morris' calls. Dkt. # 46–21. Morris sent the Barres a letter advising them that their failure to provide documentation and appear for an EUO was delaying resolution of the theft claim. Id. Morris received some of the documents she had requested from the Barres and she sent them a letter explaining what documents remained to be produced before the EUOs could take place. Dkt. # 46–22. By October 6, 2009, Morris still had not received all of the documents she had requested from the Barres, and she advised the Barres that their delay in participating in an EUO was preventing completion of State Farm's investigation. Dkt. # 46–24.

On October 7, 2009, the Barres provided nearly all of the information sought by Morris, and Morris scheduled the EUOs of the Barres for November 4, 2009, to accommodate Etta Barre's work schedule. Dkt. # 46–27. The Barres appeared for their EUOs on November 4, 2009, but Etta Barre halted her EUO after two hours and refused to proceed without her attorney present. Dkt. # 46–3, at 8–10. Morris asked to have Etta Barre provide a letter of representation from her attorney,...