Deanda v. AIU INS.

Decision Date29 June 2004
Docket NumberNo. 98,986.,98,986.
Citation98 P.3d 1080,2004 OK 54
PartiesKeir DEANDA, Plaintiff, v. AIU INSURANCE and AIG Claim Services, Inc., Defendants.
CourtOklahoma Supreme Court

Roger B. Hale, Wyatt, Austin, Kingery & Hale, Ada, OK, for plaintiff.

William D. Perrine, Perrine, McGivern, Redemann, Reid, Berry & Taylor, P.L.L.C., Tulsa, OK, for defendants.


¶ 1 The United States District Court for the Northern District of Oklahoma certified the following question pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.2001, § 1601 et seq.: "Does Oklahoma recognize the tort of bad faith against a workers' compensation insurance carrier for post-award conduct?" We answer, consistent with our recent holding in Kuykendall v. Gulfstream Aerospace Technologies, 2002 OK 96, 66 P.3d 374, Oklahoma does not recognize such a tort. Title 85 O.S.2001, § 42 provides the sole remedy when an insurance company fails to pay the compensation awarded by the Workers' Compensation Court.


¶ 2 The plaintiff, Keir DeAnda, was an employee of Terra Telecom. The defendant, AIU Insurance Company, issued a policy for workers' compensation insurance to Terra Telecom, which was in effect at the time of DeAnda's injury. The defendant, AIG Claim Services, Inc., is the third party administrator for AIU, responsible for the payment of allowed benefits, and authorization and payment of reasonable and necessary medical care related to DeAnda's workers' compensation claim.

¶ 3 The Workers' Compensation Court entered orders providing for reasonable and necessary medical expenses, and ordered reimbursement of expenses, prepayment of expenses and interest. DeAnda alleges that authorization for reasonable and necessary medical expenses, payments of reimbursements, prepayment of expenses and payment of interest were unreasonably delayed. The defendants deny that any award was entered determining what treatment was reasonable and necessary, or that their denial of medical treatment or delay in reimbursement was unreasonable. They further deny that the orders at issue rise to the level of an award.

¶ 4 These facts give a context to the certified question, and establish that the answer to the question may be determinative of an issue in pending litigation in the certifying court. 20 O.S.2001, § 1602. There is no controlling decision of this Court that answers this certified question.


¶ 5 The Workers' Compensation Act "provides a complete, comprehensive, and exclusive method for administration of its provisions and for the enforcement of any and all awards made thereunder." May v. Covington, 1939 OK 429, ¶ 0, 95 P.2d 233. In the May case, the claimant's award was not paid. A general execution issued and was returned unsatisfied. The claimant then tried to collect against the stockholders of his employer, based on a statute in title 18, now repealed. The Court held that the Workers' Compensation Act, at that time the "Workmen's Compensation Law," was not complementary to any prior existing legislation, but an independent and separate legislative expression that established rights and liabilities and created methods for their determination and for the enforcement of any awards. May, 1939 OK 429, ¶ 6, 95 P.2d at 234. The Workers' Compensation Act is exclusive as to both awards and remedies. That Act provides in pertinent part:

"The liability prescribed in Section 11 of this title shall be exclusive and in place of all other liability of the employer ... at common law or otherwise, for such injury, loss of services, or death, to the employee, or the spouse, personal representative, parents, or dependents of the employee, or any other person."

85 O.S.2001, § 12.

¶ 6 The plaintiff, Keir DeAnda, maintains that this provision relates only to the liability of the employer, not to that of the insurance carrier. This question was answered in United States Fidelity and Guaranty Co. v. Theus, 1972 OK 9, ¶¶ 7, 12, 493 P.2d 433, 434, 435. In that case the Court observed that although the Workers Compensation Act does not specifically exclude the insurance carrier from suit in district court for its own negligence, nevertheless, "the carrier is immune from suit in a common law action." After examining provisions in the Workers' Compensation Act, the Court held that the intent of the law was "to make the insurance carrier one and the same as the employer as to liability and immunity." Theus, 1972 OK 9, ¶ 12, 493 P.2d at 435, Fehring v. State Ins. Fund, 2001 OK 11, ¶ 28, 19 P.3d 276, 285.

¶ 7 In Kuykendall we held that a common law remedy was not available against an employer for a post-judgment failure to pay an award ordered by the Workers' Compensation Court. Kuykendall, 2002 OK 96, ¶ 13, 66 P.3d at 378. DeAnda attempts to distinguish Kuykendall from the facts before us because one involves a self-insured employer and the other an insurance carrier for an employer. But the teaching of Theus is that they are treated the same; if a self-insured employer cannot be sued for a bad faith failure to pay, neither can an employer's insurance carrier.


¶ 8 Title 85 O.S.2001, § 11 provides compensation for "accidental personal injury." DeAnda argues that intentional acts of the insurance carrier are not covered by the Workers' Compensation Act. He continues that because bad faith is an intentional act, recovery for damages does not fall within the exclusive jurisdiction of the Workers' Compensation Court.

¶ 9 In Whitson v. Oklahoma Farmers Union Mut. Ins. Co., 1995 OK 4, 889 P.2d 285, the issue was whether a successful workers' compensation claimant could later assert a tort claim against his employer for the manner in which the employer defended the claim. The Court held that he could not. Whitson, 1995 OK 4, ¶ 1, 889 P.2d at 286. The facts reveal that Whitson's supervisor claimed that he never received notice of Whitson's injury within the statutory time. The supervisor allegedly instructed other employees to deny notice of the claim. However, despite the supervisor's actions, an employee did confirm Whitson's accident to the investigator for the workers' compensation carrier early in his investigation. The court awarded compensation. Whitson, 1995 OK 4, ¶ 2, 889 P.2d at 286.

¶ 10 Whitson sued for fraud and bad faith. The trial court granted summary judgment to the defendants. On appeal, this Court held that an employer's liability to an injured worker is limited to that created by § 12 of the Workers' Compensation Act. Whitson, 1995 OK 4, ¶ 8,889 P.2d at 287.1 The act of the supervisor was alleged to be intentional, yet because it occurred during the adjudication of an employee's claim, the Court found the intentional act could not be grounds for a separate lawsuit.

¶ 11 Without citing Theus, Anderson v. United States Fidelity and Guaranty Co., 1997 OK 124, 948 P.2d 1216, nevertheless followed its teaching in placing the insurer in the same position as the employer for conduct that predates a workers' compensation award. Anderson held that Oklahoma does not recognize a bad faith claim for pre-award conduct against a workers' compensation insurance carrier. Anderson, 1997 OK 124, ¶ 11, 948 P.2d at 1218, citing "Whitson 889 P.2d at 285." The insurance carrier in that case contested Anderson's workers' compensation claim and filed an objection to his medical report. About six months later, the insurer authorized medical treatment. Anderson, 1997 OK 124, ¶ 3, 948 P.2d at 1216-1217.

¶ 12 Anderson filed suit in the district court of the State of Oklahoma for bad faith and intentional infliction of emotional distress. The case was removed to the United States District Court for the Northern District of Oklahoma, which certified this question:

"Does Oklahoma law recognize the tort of bad faith for unjustified denial of workers' compensation insurance coverage or the assertion of a groundless defense, based on alleged damages incurred for the carrier's conduct that predated the claimant's workers' compensation award?"

Anderson, 1997 OK 124, ¶ 1, 948 P.2d at 1216. Like Whitson, Anderson alleged an intentional act, yet this Court refused to recognize the pre-award tort.

¶ 13 Whitson and Anderson conclusively establish that not all intentional torts fall outside the jurisdiction of the Workers' Compensation Court. Therefore, even if the actions of the defendants, AIU and AIG, were intentional, that fact does not necessarily exclude them from the exclusive jurisdiction of the Workers' Compensation Act.


¶ 14 A remedy for failure to pay is found in 85 O.S.2001, § 42.2 The Legislature has included a remedy within the Workers' Compensation Act for post-judgment acts, such as when a failure to pay occurs after an award has been ordered. Title 85 O.S.2001, § 42, provides that the certified copy of the Workers' Compensation award shall have the same force and be subject to the same law as judgments of the district court. Accordingly, whatever law applies to the district courts for collection of judgments also applies to the collection of awards originating from the Workers' Compensation courts. When a copy of the certification order is filed in the offices of any court clerk and county clerk, and is entered on the judgment docket, the certified unpaid award acquires by force of statute the efficacy of a district court judgment, "transforming an unpaid award in default into an enforceable district court adjudication by clothing the obligor's compensation liability with the attributes of a district court judgment." Lee Way Motor Freight, Inc. v. Welch, 1988 OK 121 ¶ 9, 764 P.2d 191, 195. "When filed in the district court, the certification affords a legal vehicle for enforcement proceedings to be conducted in that forum." Lee Way Motor Freight, 1988 OK 121 ¶ 10,764 P.2d at 195.

¶ 15 That award bears interest at the rate of...

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