McCoy v. Oklahoma Farm Bureau Mut. Ins. Co.
| Decision Date | 24 March 1992 |
| Docket Number | No. 68085,68085 |
| Citation | 841 P.2d 568,1992 OK 43 |
| Parties | Ralph McCOY, Appellee, v. OKLAHOMA FARM BUREAU MUTUAL INSURANCE COMPANY, Appellant. |
| Court | Oklahoma Supreme Court |
Certiorari to the Court of Appeals, Division III.
In an appeal from the District Court of Greer County; David E. Brooks, Trial Judge; the Court of Appeals, Division III, affirmed in part, reversed in part, and remanded a jury verdict awarding homeowner damages on this insurance contract and bad faith claim against insurer.
CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; JURY VERDICT REINSTATED AND AFFIRMED AS MODIFIED.
Shirley, Stephenson, Shirley & Webber, Tom R. Stephenson and Christine Beadle, Watonga, for appellee.
Cathcart, Gofton & Stratton, W.R. Cathcart and Allison Herzfeld, Oklahoma City, for appellant.
Petitioner Ralph McCoy, (Homeowner), was awarded actual damages under an insurance policy with respondent Oklahoma Farm Mutual Insurance Company, (Insurer). The same jury also returned a verdict for Homeowner on his bad faith claim against Insurer, and awarded actual and punitive damages arising from Insurer's handling of Homeowner's claim. Upon review, the Court of Appeals affirmed the jury's verdict which held Insurer contractually liable under its policy.
However, the appellate court opined that the jury verdict should have been reduced by the amount Insurer paid to Homeowner's mortgagee. The intermediate court also reversed the verdict as to Homeowner's bad faith claims against Insurer, and the trial court's award of attorneys' fees. Finally, the Court of Appeals remanded the cause for a redetermination of attorneys' fees arising from Homeowner's contractual claim only.
Homeowner's residence in Mangum, Oklahoma and his personal property were destroyed by fire. Homeowner filed a proof of loss and a statement of personal property lost and damaged under an insurance policy. Homeowner alleged that his loss was caused by faulty wiring. The insurance policy provided, inter alia, coverage of $50,000.00 for damage to the structure, $25,000.00 for damage to personal property, and $10,000.00 for living expenses.
Insurer denied Homeowner's claim. Almost one year after Homeowner's loss, Insurer contended, 1) that the fire was intentionally set either by or at the direction of Homeowner, 2) that Homeowner made material misrepresentations and violated the fraud and false swearing provisions of the policy, and 3) that Homeowner increased or had knowledge of the hazard leading to the loss. Homeowner then filed this action against Insurer for breach of contract and bad faith refusal to pay a valid claim. At Insurer's request, the trial was bifurcated; that is, Homeowner's claim under breach of the insurance contract was separated from Homeowner's action alleging Insurer breached its implied duty to deal fairly and act in good faith.
In phase one of the trial, dealing with Homeowner's contractual claim against Insurer, the jury heard testimony and reviewed conflicting evidence concerning whether the fire was incendiary, electrical, or accidental in nature. Homeowner's fire investigation experts found no evidence of arson. The volunteer firemen who fought the blaze testified that due to the inaccessibility of a sufficient water supply and mechanical failure of the fire fighting apparatus, major structural damage was incurred to Homeowner's residence. The State Fire Marshal's office could not determine the actual cause of the fire, but ruled that it was accidental in nature.
However, Insurer's cause and origin expert, who investigated Homeowner's claim approximately eight days after the fire, claimed that he was able to smell fuel and found traces of an accelerant in the ruins of Homeowner's residence. Insurer's expert testified that the fire was deliberately set using white gas. Insurer's expert alleged that he saw a Coleman lantern at the scene of the fire; however, the lantern was gone after he returned from his lunch break. Homeowner presented evidence challenging the credibility of Insurer's expert and his investigation techniques. In addition to its alleged evidence of an incendiary fire, Insurer introduced evidence tending to show that Homeowner had motive, intent, and an opportunity to commit arson. Nevertheless, the jury found for Homeowner and awarded $55,000.00 in actual damages under Homeowner's contractual claim.
During the second phase of the trial, the jury heard testimony concerning whether Insurer breached its obligation of good faith and fair dealing in handling Homeowner's claim under the insurance policy. Homeowner contended that Insurer acted unreasonably in handling his claim, that Insurer's investigation of the claim was biased, and not conducted as claims are ordinarily handled in the insurance industry. Homeowner also alleged that Insurer was experiencing cash-flow problems and had informed its adjusters to stall payments of claims. The jury returned a verdict in favor of Homeowner on his bad faith claim, and awarded $30,000.00 in non-contractual damages and $30,000.00 in punitive damages. Subsequently, the trial court awarded Homeowner attorney's fees and costs for litigation of the contractual phase of this action. From this adverse verdict, Insurer appealed.
The Court of Appeals affirmed the jury's verdict insofar as it held Insurer contractually liable under its policy. However, the appellate court reasoned that the jury's award of $55,000.00, arising from Homeowner's contractual claim, should have been credited by the amount Insurer paid to Homeowner's mortgagee. 1 Consequently, Homeowner's contractual damage award was reduced. Upon further review of the record, the Court of Appeals found "no evidence reasonably tending to support the verdict regarding Insurer's alleged unreasonable and bad faith breach of the insurance contract." In other words, as more fully addressed herein below the Court of Appeals improperly weighed the evidence in reaching its conclusion that there was a "legitimate dispute" between Insurer and Homeowner regarding the bad faith claim. Accordingly, the appellate court reversed the jury's verdict awarding Homeowner actual and punitive damages under his bad faith action.
Finally, the Court of Appeals reversed the trial court's award of attorney's fees, holding that Homeowner was not the prevailing party on the bad faith claim, inasmuch as the court had reversed the jury verdict for tort damages. The court remanded the cause for a redetermination of reasonable attorney's fees arising from Homeowner's prosecution of his breach of contract action only. 2 We granted Homeowner's petition for certiorari.
In its examination of the record, regarding Homeowner's bad faith claim against Insurer, the Court of Appeals found no evidence reasonably tending to support the jury's verdict. We hold that Homeowner's bad faith claim was properly submitted for determination by the jury, and that the jury's verdict should be reinstated and affirmed. In a case properly submitted to the jury, an appellate court will not weigh the evidence, nor will it invade the jury's peculiar province and substitute its judgment for that of the jury in the exercise of its function as a fact-finding body. 3
There is no evidence that the bad faith damage verdict was actuated by passion, prejudice, improper sympathy, or based upon caprice, or without any reasonable foundation. 4 This Court will indulge in the presumption that the jury's verdict is correct, and if there is any competent evidence reasonably tending to support the verdict of the jury, this Court will not disturb the verdict and judgment based thereon.
The jury's verdict is conclusive as to all disputed facts and all conflicting statements, including the credibility of witnesses and the effect and weight to be given to conflicting or inconsistent expert testimony. Inasmuch as these are questions of fact to be determined by the trier of facts, whether court or jury, the same will not be disturbed on appeal since such are not questions of law. 5
In the instant case, the jury, in awarding Homeowner damages under the insurance policy, must have believed that Homeowner did not set his house on fire, or procure his residence to be burned. We are of the opinion that there is competent evidence to support the jury's conclusion that the fire was not of an incendiary origin, that Insurer unreasonably withheld payment of...
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