Meeks v. Guarantee Ins. Co.

• Decision Date: 28 February 2017
• Docket Number: No. 113,752,113,752
• Citation: 392 P.3d 278
• Parties: Tracy MEEKS, Appellant, v. GUARANTEE INSURANCE COMPANY, Appellee.
• Court: Oklahoma Supreme Court

392 P.3d 278

Tracy MEEKS, Appellant,

v.GUARANTEE INSURANCE COMPANY, Appellee.

No. 113,752

Supreme Court of Oklahoma.

FILED: February 28, 2017

Rick Bisher, RYAN BISHER RYAN PHILLIPS & SIMONS, Oklahoma City, Oklahoma, for Appellant.

Bob Latham, Brian Carter, Lindsey Elizabeth Albers, LATHAM WAGNER STEELE & LEHMAN, Tulsa, Oklahoma for Appellee.

Colbert, J.

¶ 1 This appeal was retained to reiterate the proper application of this Court's decision in Summers v. Zurich Am. Ins. Co. , 2009 OK 33, 213 P.3d 565, to monetary awards—although paid—not provided as ordered. Today, this Court reemphasizes that an order of the Workers' Compensation Court (WCC) that clearly identifies previously ordered benefits and finds that insurer failed to demonstrate good cause for its delay in, or noncompliance with, providing court ordered benefits satisfies the certification requirements delineated in Summers . Because the certification requirements were met here, employee may proceed in district court on his bad-faith claim against insurer for insurer's alleged bad faith refusal to provide temporary total disability benefits as ordered by the WCC.

FACTS AND PROCEDURAL HISTORY

¶ 2 On September 10, 2014, the appellant, Tracy Meeks (Meeks), filed a petition in district court alleging that appellee, Southside Recycling LLC (Employer), through its insurance carrier, Guarantee Insurance Co. (Insurer), had in bad faith engaged in a systematic pattern and practice of refusing to pay court ordered temporary total disability (TTD) benefits on twenty-six separate occasions, without just cause. In support, Meeks relied on various previously entered TTD orders by the WCC. In particular, Meeks proffered a June 26, 2014 WCC Order that stated:

The Court previously determined, and ordered, that claimant was, and is entitled to temporary total disability payments. The Court ordered respondent to pay such benefits and respondent had repeatedly failed to comply with the Court's orders.

The Court has given respondent the opportunity to provide just cause as to its refusal or failure to comply with the Court's orders in this matter, and respondent has failed to satisfy its burden in that regard resulting in the court ordering this respondent to pay penalties and interest in its APRIL 15, 2010, AUGUST 18, 2010, SEPTEMBER 30, 2011, JANUARY 4, 2012, JUNE 15, 2012 AND OCTOBER 12, 2012 orders.

Respondent continued to fail to comply with the Court's order for payment of temporary total disability benefits to claimant and now on this 19^th day of JUNE 2014, this cause came for consideration, and after hearing arguments of counsel, the Court FINDS and ORDERS AS FOLLOWS:

THAT respondent has again, without just cause, failed to comply to pay claimant temporary total disability payments since the last order of OCTOBER 12, 2012 on the following specific occasions:

DECEMBER 24, 2012,

DECEMBER 31 2012,

JANUARY 7, 2013, JANUARY 14, 2013, JANUARY 21, 2013,

JANUARY 28, 2013, FEBRUARY 4, 2013,

MARCH 5, 2013, APRIL 2, 2013,

OCTOBER 15, 2013,

OCTOBER 22, 2013, OCTOBER 29, 2013,

NOVEMBER 5, 2013, NOVEMBER 12, 2013, NOVEMBER 19, 2013

NOVEMBER 26, 2013,

DECEMBER 3, 2013,

DECEMBER 10, 2013,

DECEMBER 17, 2013,

DECEMBER 24, 2013

DECEMBER 31, 2013, JANUARY 7, 2014,

JANUARY 14, 2012, JANUARY 21, 2014, JANUARY 28, 2014,

FEBRUARY 4, 2014

for a total of twenty-six (26) separate occasions.

The WCC assessed penalties based on Insurer's late payment of prior TTD awards. However, the WCC denied certification under section 42(A) "due to respondent's carrier paying said penalty requested by claimant, prior to the hearing today."

¶ 3 Insurer filed its motion to dismiss in lieu of answer contending that Meeks failed to follow the procedural requirements under the Oklahoma Workers' Compensation Act, a prerequisite to commencing a bad-faith action against Insurer in district court. Relying on Sizemore , Insurer alleged that a bad-faith action can be premised only upon a carrier's outright refusal to pay a compensation award. Insurer acknowledged that Meeks sought certification from the WCC pursuant to section 42(A), but that request was denied.

¶ 4 Relying on Summers , the district court sustained Insurer's motion to dismiss finding that Meeks did not possess a certification or other order complying with section 42(A) and Rule 58. Although the district court acknowledged that the June 26, 2014 WCC Order made detailed findings of fact about Insurer's twenty-six separate occasions in failing to comply with the WCC orders absent good cause shown, the district court based its denial on the WCC's express denial for certification that all prior awards were satisfied prior to the WCC hearing. Meeks appealed.

¶ 5 Once again, this Court is presented with the confusion surrounding certification procedures and requirements pursuant to section 42(A) of the Workers' Compensation Act and Rule 58 as explained in Summers , 2009 OK 33, 213 P.3d 565, and set forth in Sizemore v. Cont'l. Cas. Co. , 2006 OK 36, 142 P.3d 47. The confusion, here, was compounded by the fact that Meeks' bad-faith claim was premised on Insurer's alleged failure to provide benefits as ordered, not on a claim of unpaid benefits. Thus, this Court retained the appeal to reemphasize that the two alternative categories for certification articulated in Summers , and reaffirmed in Silljer v. Mega Life and Health Ins. Co. , 2009 OK 44, 213 P.3d 1156 are: "that a final workers' compensation award (1) remains unpaid or (2) benefits have not been provided as ordered ." Summers , ¶ 10, 213 P.3d at 568 (emphasis added).

STANDARD OF REVIEW

¶ 6 The essence of this appeal turns upon the propriety of the district court's jurisdiction—purely a question of law. This Court reviews issues of law de novo without deference to the lower court's legal rulings. K & H Well Serv., Inc. v. Tcina, Inc. , 2002 OK 62, ¶ 9, 51 P.3d 1219, 1223.

ANALYSIS

¶ 7 At the outset, a district court may only exercise jurisdiction in an employee's bad-faith action against his or her employer/insurer when that employee has obtained an order of the Workers' Compensation Court certifying "that a final workers' compensation award either (1) remains unpaid or (2) benefits have not been provided as ordered " without good cause. Summers , 2009 OK 33 , ¶ 10, 213 P.3d at 568 (emphasis added). The certification order is the vehicle that confers jurisdiction on the district court. Stewart v. Mercy Health Center, Inc. , 2014 OK 101, ¶ 3, 341 P.3d 70, 70 (where this Court reemphasized the procedural mandates for conferring jurisdiction on the district court in a bad-faith action for unpaid WCC benefits). As delineated in Summers , the certification procedures differ for awards remaining (1) unpaid and (2) benefits not provided as ordered.

1. The Unpaid, Late Payment, or Outright Refusal to Pay a Monetary Award

¶ 8 The certification procedures for an insurer's unpaid, late payment of, or outright refusal to pay a final monetary benefit award still owing are two fold: employee must (1) first utilize the mechanism provided in section 42(A)¹ of the Workers' Compensation Act and (2) have the award certified for enforcement as a judgment of the district court pursuant to Rule 58² of the Workers' Compensation Court rules.

Summers , 2009 OK 33, ¶¶ 9-10, 213 P.3d at 568. Section 42(A) prescribes the conditions for assessing penalties and provides the method for entering an unpaid award, whether accumulative or lump sum, on the judgment rolls. Id. ¶ 12. The policy rationale behind section 42(A) is to encourage timely payment of workers' compensation awards, discourage mere non-compliance, and provide a mechanism for enforcement of the judgment in district court. Sizemore , 2006 OK 36, ¶ 25, 142 P.3d at 53-54. But, an insurer's bad faith refusal to pay an award is beyond that incentive. Id. Notably, section 42(A) only contemplates a dollar amount still owing on a monetary award. Consequently, where no amount is owing, by its terms, section 42(A) does not apply. See Summers , 2009 OK 33, ¶ 13, 213 P.3d at 569 ; see also Okla. Stat. tit. 85, § 42(A).

¶ 9 In certifying an award as unpaid pursuant to section 42(A), the employer and its insurer must be given at least ten (10) days notice prior to the trial on certification. Okla. Stat. tit 85, ch. 4, Rule 58 (Supp. 2008). At that time, the employer and the insurer shall be afforded an opportunity to show good cause why the application for an order directing certification to the district court should not be granted. Id. Because the insurer owes a duty to act in good faith and deal fairly towards the injured employee, the insurer bears the burden to demonstrate why benefits were not provided as ordered. See Christian v. Am. Home Assurance Co. , 1977 OK 141, ¶¶ 25-26, 577 P.2d 899, 904 ;³ Goodwin v. Old Republic Ins. Co. , 1992 OK 34, 828 P.2d 431 ;⁴ see also Badillo v. Mid Century Ins. Co. , 2005 OK 48, 121 P.3d 1080. Thus, the WCC's inquiry surrounds an insurer's conduct and whether that conduct was justified.

¶ 10 If the WCC determines that the insurer demonstrated good cause, no certification order will issue. However, if the insurer fails to demonstrate good cause, the WCC "certification order will issue identifying the benefits which have not been provided as ordered. The certification order will make specific findings [of facts] as to the basis for the court's determination" that the insurer failed to demonstrate good cause why the award should not be certified. Summers , 2009 OK 33 ¶ 11, 213 P.3d at 568.

¶ 11 This Court reemphasizes that where an employee has complied with section 42(A) and Rule 58, and obtains a WCC order finding that an award of monetary benefits remains unpaid without good cause, the employee may

(1) file a certified copy of the certification order, with the award attached, in the district court as a judgment and proceed to execution pursuant to section 42(A) or (2) the claimant may file a claim in tort for the insurer's bad faith. Sizemore , 2006 OK 36, ¶ 26, 142 P.3d

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