Hamilton v. Northfield Ins. Co.
| Decision Date | 05 May 2020 |
| Docket Number | No. 117,707,117,707 |
| Citation | 473 P.3d 22 |
| Parties | Billy HAMILTON, Plaintiff/Appellant, v. NORTHFIELD INSURANCE COMPANY, Defendant/Appellee. |
| Court | Oklahoma Supreme Court |
Kris Ted Ledford, Ledford Law Firm, Owasso, Oklahoma, for Plaintiff/Appellant Billy Hamilton.
R. Stratton Taylor, Darrell W. Downs, and Jacob R. Daniel, Taylor Foster Mallett Downs Ramsey & Russell, P.C., Claremore, Oklahoma, for Defendant/Appellee Northfield Insurance Company.
J. Drew Houghton, Merlin Law Group, P.A., Oklahoma City, Oklahoma, Simone G. Fulmer, Fulmer Sill, Oklahoma City, Oklahoma, Timothy B. Hummell, Hummell Law Firm, Oklahoma City, Oklahoma, and Rex Travis, Travis Law Office, Oklahoma City, Oklahoma, for Amicus Curiae, Oklahoma Association for Justice.
¶1 The United States Court of Appeals for the Tenth Circuit certified to this Court two questions of law:
¶2 We answer the first question with a "no." The statute at issue in this case–– 36 O.S. § 3629(B) ––creates an incentive for insurance companies to promptly investigate and resolve claims submitted by their insureds. It allows attorney fees to the prevailing party if a dispute arises over the payment of benefits and litigation eventually results between the insurer and the insured. Answering the first question, we conclude that a court may consider only those timely offers of settlement of the underlying insurance claim ––and not offers to resolve an ensuing lawsuit that results from the insurer's denial of the same––when determining the prevailing party for purposes of awarding attorney fees and costs under section 3629(B).
¶3 Our answer to the first question also resolves the second. Section 3629(B) contemplates only those offers made by the insurer to settle the insured's claim within the prescribed sixty-(formerly, ninety-) day window. Quite plainly, the statute never discusses an offer to settle a lawsuit initiated beyond that period––the whole purpose of the statute is to avoid litigation by creating fee-shifting disincentives if the insured's claim is not speedily resolved. Because the federal court's second question necessarily relates solely to offers made in the course of litigation after the lapse of the statute's crucial sixty- (formerly, ninety-) day period, we must answer this question in the negative as well. We caution, however, that this second answer of "no" is strictly limited to the specific context of determining prevailing-party status under section 3629(B) alone. We express no opinion on a trial court's evaluation of the form of settlement offer described in the certifying court's second question when made outside the section 3629(B) setting.
¶4 The federal court's certification order sets out the underlying facts of this case. When answering a certified question, this Court will not presume facts outside those presented by the certification order itself. Gov't Emps. Ins. Co. v. Quine , 2011 OK 88, ¶ 14, 264 P.3d 1245, 1249. That is, "our examination is confined to resolving legal issues." Id. We remain free, however, to "consider uncontested facts supported by the record." Siloam Springs Hotel, LLC v. Century Sur. Co. , 2017 OK 14, ¶ 2, 392 P.3d 262, 263.
¶5 Billy Hamilton––a small-business owner in Council Hill, Oklahoma––filed a claim in December 2015 with his insurer, Northfield Insurance Company, seeking coverage for his building's leaking roof. Northfield twice denied his claim––once in February 2016, and again in April 2016. Hamilton filed suit against Northfield in November of that year, alleging bad-faith denial of his insurance claim and breach by Northfield of the insurance contract.2
¶6 In June 2017, Hamilton's attorney sent Northfield's attorneys an email that included a draft of a proposed pretrial order. In that communication, Hamilton's counsel asked Northfield's lawyers to send him "a serious settlement offer" the following week, noting he had "almost $12k in hard costs invested in this case thus far" and was conveying that information "because that figure impacts how much of any settlement Mr. Hamilton would receive." Counsel for Northfield responded that the insurance company was "willing to offer $45,000 to settle this case," observing that they "believe[d] this [wa]s a fair offer as it [wa]s more than three times the actual damages in this case." Northfield's counsel also stated, "Based upon your out of pocket litigation expenses, this settlement amount will allow you to recover these expenses along with some fees and should reimburse Mr. Hamilton for the entire amount of his repair costs."
¶7 Hamilton rejected the offer and went to trial. A jury awarded him $10,652––the maximum amount of damages the judge instructed the jury it could award. Hamilton then sought attorney fees and statutory interest under section 3629(B). Northfield responded that Hamilton was not the prevailing party under the statute, given that he had recovered less than its settlement offer to him. The federal district court agreed with Northfield, and Hamilton appealed to the Tenth Circuit Court of Appeals. Initially, a panel of that court affirmed the district court's determination that Hamilton was not the prevailing party for purposes of awarding attorney fees under section 3629(B). But––following a petition for en banc rehearing by Hamilton and additional briefing by amicus curiae––the Tenth Circuit Court of Appeals granted panel rehearing sua sponte, vacated its opinion as to the issues raised in Hamilton's appeal, and certified the two questions to this Court.
¶8 The federal court's certified questions ask us to define the proper scope and application of a provision of the Oklahoma Insurance Code, 36 O.S. § 3629(B).3
"The primary goal of statutory interpretation is to ascertain and, if possible, give effect to the intention and purpose of the Oklahoma Legislature as expressed by the statutory language." Raymond v. Taylor , 2017 OK 80, ¶ 12, 412 P.3d 1141, 1145. Every provision of every Oklahoma statute "is presumed to have been intended for some useful purpose and every provision should be given effect." Darnell v. Chrysler Corp. , 1984 OK 57, ¶ 5, 687 P.2d 132, 134. And "statutes are interpreted to attain that purpose and end, championing the broad public policy purposes underlying them." Estes v. ConocoPhillips Co. , 2008 OK 21, ¶ 16, 184 P.3d 518, 525.
¶9 The plain language of section 3629(B) imposes an affirmative duty on an insurer to submit a written offer of settlement or rejection of the claim to the insured within a definite time period: sixty days. "A statute will be given a construction, if possible, which renders every word operative, rather than one which makes some words idle and meaningless." Estes , 2008 OK 21, ¶ 16, 184 P.3d at 525. This interpretive principle applies to "every word, phrase, and clause" of the statute. Matthews v. Rucker , 1918 OK 29, ¶ 5, 67 Okla. 218, 170 P. 492, 493. Moreover, when construing a statute, "relevant provisions must be considered together, where possible, to give force and effect to each." Ledbetter v. Okla. Alcoholic Beverage Laws Enf't Comm'n , 1988 OK 117, ¶ 7, 764 P.2d 172,179. Section 3629(B) speaks of a specific kind of offer––an offer of settlement or rejection of a claim. Its preceding subsection, in turn, contextualizes and clarifies precisely what is meant by a claim: "An insurer shall furnish, upon written request of any insured claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person ...." Id. § 3629(A) (emphasis added).
¶10 We construe the words in a statute "according to their plain and ordinary meaning." In re Protest of Hare , 2017 OK 60, ¶ 10, 398 P.3d 317, 319–20. And so in this case we take section 3629(B)'s words in their plain and ordinary sense––just as would the layperson who purchases an insurance policy, suffers a covered loss, and submits proof of that loss to the insurer. The statute tells both parties what to expect when the insured submits the claim. Upon receiving the insured's claim––that is, the proof of loss––the insurer must act within sixty days to settle (or else reject outright––as happened in this case) that claim.
¶11 By its own plain terms, then, section 3629(B)'s claim––toward which the offer of settlement or rejection is directed––must be an insured's request to the insurer to be made whole for a covered loss. This does not equate to, and must not be mistaken for, a claim arising in later litigation. Had the insured's claim been promptly resolved, no litigation would have arisen at all. A section 3629(B) claim directly flows from the insured's written claim of loss, arising under the insurance contract and duly...
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