Higgins v. State Auto Prop. & Cas. Ins. Co., 11-CV-90-JHP-TLW
| Decision Date | 12 June 2012 |
| Docket Number | 11-CV-90-JHP-TLW |
| Court | U.S. District Court — Northern District of Oklahoma |
| Parties | BLAKE HIGGINS, Plaintiff, v. STATE AUTO PROPERTY & CASUALTY INSURANCE COMPANY Defendant. |
Before the Court are Plaintiff's Motion for Partial Summary Judgment (Plaintiff's Motion),2 Defendant's Motion for Summary Judgment and Brief in Support (Defendant's Motion),3 Plaintiff's Errata/Correction to Plaintiff's Motion for Partial Summary Judgment,4 Defendant's Response to Plaintiff's Motion for Partial Summary Judgment and Brief in Support (Defendant's Response),5 Plaintiff's Response Brief in Opposition to Defendant's Motion for Summary Judgment(Plaintiff's Response),6 Plaintiff's Reply Brief to Defendant's Response to Plaintiff's Motion for PartialSummary Judgment (Plaintiff's Reply),7 and Defendant's Reply in Support of Motion for Summary Judgment (Defendant's Reply).8 Also considered by the Court are Defendant State Auto Property and Casualty Company's Memorandum of Authorities Regarding Stacking,9 Plaintiff's Supplemental Brief in Support of Summary Judgment,10 Defendant State Auto Property and Casualty Company's Response to Plaintiff's Supplemental Brief on Stacking,11 and Plaintiff's Brief in Opposition to State Auto's Memorandum of Authorities Regarding Stacking.12 For the reasons detailed below, Plaintiff's Motion for Partial Summary Judgment is DENIED. Defendant's Motion for Summary Judgment is GRANTED IN PART, DENIED IN PART.
A. Undisputed Factual Background13
The instant case arises from a September 27, 2009 automobile accident in which Plaintiff was struck by another vehicle.14 At the time of the Accident, Plaintiff was operating a vehicle owned by his employer Empire Plumbing Supply Company, Inc. (Empire).15 The vehicle was covered bya insurance policy (Policy) from State Auto Property and Casualty Insurance Company (State Auto), a policy which included uninsured/under insured motorist (UIM) coverage with a medical pay limit of $2,000 and an individual policy limit of $1,000,000.16 As a consequence of his operating a covered vehicle at the time of the accident, Plaintiff was covered by this UIM policy.17 Plaintiff was determined to be not at fault for the accident.18
Defendant received notice of the accident on November 11, 2009, and on November 13, 2009, Defendant received a release form from the accident tortfeasor's insurance company in the amount of $25,000.00, the tortfeasor's liability limit.19 Both parties concede Plaintiff's damages exceed the $25,000 liability limit.20 On November 16, 2009, Plaintiff executed and returned a medical records authorization to Defendant, although the extent of that authorization is disputed.21 On December 1, 2009, Defendant released its right of subrogation against the tortfeasor's insurance company.22
Early in the claim process, Plaintiff was represented by Attorney Tom Sullivent, who exchanged multiple letters with claims adjusters regarding Plaintiff's claim.23 The record shows thaton September 10, 2010, Attorney Sullivent submitted medical bills totaling the amount of $79,182.84, and on November 8, 2010, Sullivent Submitted further bills bring that total to $86,531.09.24 It is unclear whether any of these bills had been partially paid by Plaintiff's health insurance. Plaintiff's initial demand of a $425,000 partial payment was denied, and, on January 5, 2011, after no payment was tendered, Attorney Sullivent brought the instant suit in Tulsa County District Court.25
Over the course of the claims process and through the litigation, several adjusters reviewed Plaintiff's claim, and it remains disputed as to whether or not these adjusters were able to adequately evaluate Plaintiff's medical expenses and claims for lost wages.26 It is undisputed that on or about January 26 2010, Plaintiff received medical pay benefits of $2,000, the limits of the medical pay portion of the Policy.27 Defendant made no other payments to Plaintiff until January 25, 2012, over one year after the commencement of this litigation, when it tendered a partial payment to Plaintiff, Plaintiff's attorneys, and certain medical providers in the amount of $375,000.28
Plaintiff's First Amended Complaint seeks relief for (1) breach of the insurer's duty to deal fairly and in good faith; (2) negligent claims handling; (3) breach of the insurance agreement (breachof contract); and (4) punitive damages.29 In his Motion for Partial Summary Judgment Plaintiff seeks summary judgment as to his claims of bad faith and breach of contract.30 In its Motion for Summary Judgment, Defendant seeks summary judgment as to Plaintiff's multiple allegations of bad faith, and Plaintiff's allegations of breach, negligence, and request for punitive damages.31 Through Plaintiff's Response to Defendant's Motion for Summary Judgment, the Court is aware that the parties have agreed to a stipulation of dismissal with regard to Plaintiff's allegation of negligent claims handling.32 As such, that claim is DISMISSED.
Federal Rule of Civil Procedure 56(c) provides the standard courts must use when determining whether summary judgment is proper. According to the rule, summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."33 A material fact is one that is essential to disposition of a claim, and a genuine issue is present when the trier of fact could resolve it in favor of either party.34 Whendetermining issues of law in a diversity action, this Court has an obligation to apply Oklahoma law as announced by the highest court of the state.35 In the absence of an authoritative pronouncement, federal courts, sitting in diversity, must predict how Oklahoma's highest court would rule, following "any intermediate state court decision unless other authority convinces [this Court] that the state supreme court would decide otherwise."36
Both parties seek summary judgment as to all of Plaintiff's multiple allegations of bad faith. The Court addresses each allegation in turn. It is important to note that, in an action for bad faith, "[a]n insurer is entitled to have any dispute concurring the reasonableness of its actions settled by a jury."37 "[I]f there is conflicting evidence from which different inferences may be drawn regarding the reasonableness of insurer's conduct, then what is reasonable is always a question to be determined by the trier of fact by a consideration of the circumstances in each case."38
Throughout his pleadings, Plaintiff alleges that Defendant's representative intentionally delayed and deceived Plaintiff with regard to Defendant's subrogation waiver in an attempt to make Plaintiff settle with the tortfeasor's insurer without the waiver.39 Plaintiff is correct in asserting thatfailure to obtain such a waiver before accepting settlement from the tortfeasor would destroy Plaintiff's right to recover under the Policy.40 Therefore any evidence of deception may point to a triable issue of bad faith. However, rather than evidencing an effort to deceive, the uncontroverted record reflects that the improper instructions by Defendant's representative regarding the subrogation waiver were the result of general incompetence.41 Further, the waiver of subrogation was delivered to Plaintiff within the 60-day time frame mandated by Oklahoma State title 36, §3636(F)(2), and did not ultimately impact Plaintiff's claim.42 For these reasons, the Court finds that no reasonable jury could find Defendant's actions regarding the waiver of subrogation constituted bad faith. Plaintiff's Motion for Partial Summary Judgment on this issue is DENIED, Defendant's Motion for Summary Judgment on this issue is GRANTED.
Plaintiff's claim that Defendant failed to reveal the Policy limits is without merit. The record is replete with references to the individual Policy limit beginning as early as December 14, 2009. For example, on December 14, 2009, Defendant mailed a letter responsive to a December 7, 2009inquiry letter from Attorney Sullivent.43 That letter states: "This policy has a $2,000 medical payments benefit as well as BI/PD-single limits in the amount of 1,000,000.00."44
Further, in two faxes dated December 9, 2010, Sullivent recognized that Defendant had previously informed him of the $1,000,000 limits. 45 The Policy's limit of $1,000,000 is also clearly listed on the UIM policy form to which Plaintiff, as Chief Operating Officer of Empire Plumbing, had at least some access.46 Based on this evidence, no reasonable jury could conclude that Defendant delayed in revealing the Policy's individual limits. Because there is no evidence of delay, the Court need not address Plaintiff's argument that the purported delay in the disclosure of policy limits was a violation of the Oklahoma Unfair Claims Settlement Practices Act and therefore evidence of bad faith.47 Plaintiff's Motion for Partial Summary Judgment as to this issue is DENIED, Defendant's Motion for Summary Judgment on this issue is GRANTED.
Plaintiff's supplemental allegation, that Defendant acted in bad faith by withholding the fact that Plaintiff could stack the coverage of the multiple vehicles under Policy, is similarlyunfounded.48 From the supplemental briefing it is apparent that Plaintiff conflates the Policy term "Named Insured" with who is generally "insured" under the Policy.49 This distinction is clear on the face of the Policy.
As a matter of Oklahoma law, only named insureds and resident relatives of those named insureds may stack UIM coverage.50 The Oklahoma Supreme Court has held time and again that "those qualifying as insured because of occupancy or of permissive use do not qualify as insureds...
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