Oglesby v. Liberty Mut. Ins. Co.

• Decision Date: 05 May 1992
• Docket Number: No. 77745,77745
• Citation: 832 P.2d 834,1992 OK 61
• Parties: Katie Jean OGLESBY, Individually as Surviving Widow, and as Administratrix of the Estate of James Alford Oglesby, Jr., Deceased, et al., Plaintiffs, v. LIBERTY MUTUAL INSURANCE COMPANY and Oklahoma Property & Casualty Insurance Guaranty Association, Defendants.
• Court: Oklahoma Supreme Court

Page 834

832 P.2d 834

1992 OK 61

Katie Jean OGLESBY, Individually as Surviving Widow, and as Administratrix of the Estate of James Alford Oglesby, Jr., Deceased, et al., Plaintiffs, v. LIBERTY MUTUAL INSURANCE COMPANY and Oklahoma Property &amp Casualty Insurance Guaranty Association, Defendants.

No. 77745.

Supreme Court of Oklahoma.

May 5, 1992.

As Corrected May 29, 1992.

Certified Questions of Law from the United States District Court, Eastern District of Louisiana; George Arceneaux, Jr., Judge.

Pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.1981 § 1601 et seq., the United States District Court for the Eastern District of Louisiana certified the following questions:

1. Whether parties whose injuries arise from a single occurrence each may be entitled to recover $150,000.00 under the Oklahoma Property & Casualty Insurance Guaranty Association Act (Oklahoma Guaranty Act), 36 O.S.1981 § 2001 et seq.

2. Does 36 O.S.1981 § 2004 entitle a claimant to pre-judgment interest and costs incurred after the determination of insolvency of its insurer. If so, is the recovery of pre-judgment interest limited by 36 O.S.Supp.1985 § 2007' § $150,000.00 cap.

3. Whether 36 O.S.1981 § 2012(A) requires a claimant to exhaust all other covered claims he/she might have against an insurer before recovering from the Oklahoma Guaranty Association. If so, is the obligation of the Oklahoma Guaranty Association reduced by the amount recovered.

4. Does 36 O.S.1981 § 2012(B) require that any recovery received from workers' compensation benefits under the Oklahoma Guaranty Act be reduced by the amount of the recovery from any other insurance guaranty association.

QUESTIONS ANSWERED.

Kristi A. Post, New Orleans, for plaintiffs.

John G. Gomila, Jr., Alexander H. Plache, New Orleans, for defendant Liberty Mut. Ins. Co.

Larry Derryberry, Robert N. Naifeh, Jr., Oklahoma City, William E. Wright, Jr., Judy L. Burnthorn, Gary J. Giepert, New Orleans, for defendant Okl. Property and Cas. Ins. Guar. Ass'n.

KAUGER, Justice.

Four issues are presented by the questions certified. ¹ We find that: 1) Pursuant to 36 O.S.Supp.1985 § 2007, ² parties whose claims arise from a single occurrence may be entitled to recover the $150,000.00 statutory limitation under the Oklahoma Property and Casualty Insurance Guaranty Association Act (Oklahoma Guaranty Act), 36 O.S.1981 § 2001 et seq. 2) Pursuant to 36 O.S.1981 § 2004, ³ a claimant may be entitled to pre-judgment interest and costs incurred after the determination of insolvency of its insurer. The recovery of pre-judgment interest may not exceed the $150,000.00 statutory cap imposed by 36 O.S.Supp.1985 § 2007. 3) Pursuant to 36 O.S.1981 § 2012(A), ⁴ a claimant must exhaust all other covered claims he/she might have against an insurer, under an insurance policy, before recovering from the Oklahoma Guaranty Association. Any amount payable under the Oklahoma Guaranty Act is reduced by the amount recovered. And 4) Pursuant to 36 O.S.1981 § 2012(B), ⁵ any recovery received for workers' compensation benefits under the Oklahoma Guaranty Act must be reduced by the amount of the recovery from any other insurance guaranty association.

FACTS

James Alford Oglesby, Jr. (husband/father/employee), a Louisiana resident, worked for Grosse Tete Well Service (Well Service). On November 7, 1985, he was fatally injured when the hydraulic system of a mobile work rig failed. Pacific Marine Insurance (Pacific Marine) provided the Well Service's workers' compensation coverage. Pacific Marine was declared insolvent on July 7, 1989, and the Louisiana Insurance Guaranty Association began making workers' compensation payments to the plaintiffs, Katie Jean Oglesby (wife/mother), and Janice Renee Oglesby and James Alford Oglesby, III (children) (collectively, Oglesby).

On August 4, 1986, the mother filed a complaint on behalf of herself, the estate, and her two children in the United States District Court of the Eastern District of Louisiana. Oglesby alleged that Permian Engineering and Manufacturing Corporation (Permian Engineering) and Cooper Manufacturing Corporation (Cooper Manufacturing), an Oklahoma corporation, negligently manufactured the mobile work rig on which the employee was killed. Oglesby later named as defendants, Liberty Mutual Company (Liberty Mutual) and Allied Fidelity Insurance Company (Allied Insurance). Allied Insurance is Cooper Manufacturing's insurer. Liberty Mutual provides coverage to Permian Engineering. After the instant cause was filed, Permian Engineering and Cooper Manufacturing filed for bankruptcy and were dismissed from the cause. On March 28, 1986, Allied Insurance filed a petition for liquidation. The order of liquidation was signed on July 15, 1986. Because Cooper Manufacturing is an Oklahoma corporation, the Oklahoma Guaranty Association was added as a defendant. Allied Insurance was dismissed. Liberty Mutual and the Oklahoma Guaranty Association are the only remaining party-defendants. ⁶

Oglesby filed a motion for summary judgment requesting that the trial court interpret the Oklahoma Guaranty Act to determine: 1) whether the mother and the children are entitled to receive $150,000.00 each from the Oklahoma Guaranty Association or whether the three claims are aggregated and limited to a total recovery of $150,000.00; 2) whether Oglesby must exhaust insurance recovery from Liberty Mutual and workers' compensation benefits before seeking recovery from the Oklahoma Guaranty Association; and 3) whether the Oklahoma Guaranty Association is entitled to a credit against its liability for any amounts Oglesby recovers from Liberty Mutual or in workers' compensation benefits. Finding no Oklahoma precedent to resolve the questions of law concerning the Oklahoma Guaranty Act, the trial court certified six questions to this Court pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.1981 § 1601 et seq.

I.

PURSUANT TO 36 O.S.SUPP.1985 § 2007, PARTIES WHOSE CLAIMS ARISE FROM A SINGLE OCCURRENCE EACH MAY BE ENTITLED TO RECOVER THE $150,000.00 STATUTORY LIMITATION UNDER THE OKLAHOMA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION ACT, 36 O.S.1981 § 2001 et seq.

Oglesby asserts that she and each of her two children have a covered claim within the meaning of 36 O.S.Supp.1985 § 2007 entitling them to a combined recovery of $450,000.00. The Oklahoma Guaranty Association contends that all three claims are aggregated and constitute a single covered claim subject to one $150,000.00 recovery.

The Oklahoma Guaranty Association was established by statute to protect claimants and policyholders from financial losses associated with the insolvency of an insurance company. ⁷ The funds necessary for the satisfaction of claims arising from the insolvency of an insurer are obtained by proportionate assessments against member insurers. ⁸ The liability of the Oklahoma Guaranty Association is statutorily limited to the payment of covered claims. Pursuant to 36 O.S.1981 § 2004, a covered claim is an unpaid claim of an insured or a third party liability claimant arising from and within the coverage of a policy issued by an insolvent insurer. ⁹ Except in the case of a workers' compensation claim, 36 O.S.Supp.1985 § 2007 provides that payments for covered claims are limited to the lesser of $150,000.00 or the coverage afforded in the insolvent insurer's policy. ¹⁰

The issue of whether the Oklahoma Guaranty Association is obligated to pay up to the statutory maximum of $150,000.00 to each individual beneficiary upon the insolvency of an insurer in a wrongful death action is one of first impression in Oklahoma. The jurisdictions which have decided the issue are divided. ¹¹ Those courts recognizing that each beneficiary has a claim under the guaranty acts note that the statutes refer to covered claims rather than to covered occurrences. ¹² They find that failure to allow each injured party to recover would largely defeat the remedial purpose of the guaranty laws. ¹³ The Courts holding that there is only one covered claim equate the statutory language to insurance principles and find that there is only one injury. ¹⁴

The determination of legislative intent controls judicial statutory construction. ¹⁵ Legislative intent is determined from the language of the statute in light of its general purpose and object. ¹⁶ We presume that the Legislature intends what it expresses in a statute. ¹⁷ Except when a contrary intention plainly appears, the words used are given their ordinary and common definitions. ¹⁸ In determining whether the Oglesbys are entitled to a single or to multiple recoveries, we must construe the language of § 2007 which provides that the obligation of the Guaranty Association includes the amount of each covered claim which is less than $150,000.00. ¹⁹

The word "each" is generally defined to mean any one of a number, separately considered. ²⁰ It is a distributive adjective pronoun denoting or referring to every one of two or more persons or things, composing the whole, separately considered. ²¹ The Legislature's use of the word "each" rather than "all" covered claims indicates that it anticipated the possibility of multiple recoveries. Additionally, § 2007 does not use the word "occurrence". It expressly applies the $150,000.00 limit to "claims". There is no basis for substituting the word "occurrence" for "claim" in order to aggregate multiple claims arising from a single accident. ²²

The plain meaning of the text of § 2007 does not support aggregation of multiple claims. A finding that only one claim may arise out of a single occurrence would largely defeat the remedial purpose of the Oklahoma Guaranty Association Act--to protect claimants and policyholders from financial losses associated with the insolvency of an insurance company. ²³ Recovery against losses resulting from the insolvency of insurance carriers, which the Legislature intended to provide, would...