Torres v. Kansas City Fire and Marine Ins. Co., 70973

Citation1993 OK 32,849 P.2d 407
Decision Date30 March 1993
Docket NumberNo. 70973,70973
PartiesGary Leon TORRES, Personal Representative of the Estate of Christopher Wade Torres, Deceased, Appellee, v. KANSAS CITY FIRE AND MARINE INSURANCE COMPANY, Appellant.
CourtSupreme Court of Oklahoma

Certiorari to the Court of Appeals, Division 3. Appeal from the District Court of Comanche County William M. Roberts, Trial Judge.

Appellee, representative of decedent's estate, sued appellant insurance company to recover under uninsured/underinsured (UM) endorsement to policy of insurance issued to decedent's employer by appellant. Decedent was killed in a one-car accident while a passenger in a vehicle driven by a coemployee. Appellant admitted decedent was an insured under the UM endorsement by virtue of his occupancy in the vehicle and that the coemployee was negligent in causing the accident. The trial court ruled UM coverage available and the matter was tried to a jury on damages. A verdict of $350,000.00 was returned for appellee and to this sum the trial court added prejudgment interest from the date of commencement of suit to the date of verdict. Appellant appealed arguing the UM endorsement was inapplicable because appellee was not legally entitled to recover damages from the coemployee, such employee having statutory immunity under our workers' compensation laws. It also asserted it was error to add prejudgment interest to the verdict. The Court of Appeals affirmed. HELD: The trial court was correct in ruling the UM endorsement provided coverage and in adding prejudgment interest to the verdict.

Certiorari Previously Granted; Court of Appeals Opinion Vacated and Withdrawn from Publication; Trial Court Affirmed.

David H. Cole and Brian Husted, Edmonds, Cole, Hargrave & Givens, Oklahoma City, for appellee.

James A. Jennings, III, Holloway, Dobson, Hudson & Bachman, Oklahoma City, for appellant.

LAVENDER, Vice Chief Justice.

We decide in this case the trial court was correct in ruling as a matter of law appellee, personal representative of the estate of Christopher Wade Torres (decedent), was entitled to recover under an uninsured/underinsured (UM) endorsement to a policy of insurance issued by appellant, Kansas City Fire and Marine Insurance Company, to decedent's employer. We also decide the trial court was correct in adding prejudgment interest to the jury verdict from the date appellee commenced suit against appellant to the date of verdict pursuant to 12

O.S.1991, § 727(A)(2). 1

PART I. FACTS AND PROCEDURAL HISTORY

Decedent, sixteen years old, obtained employment with Mid-America Lumber, Inc. in the summer of 1986. On July 9, 1986, while riding as a passenger in a vehicle owned by his employer and driven by a coemployee, decedent died as a result of a one-car accident. Both parties agree decedent and the coemployee were in the course of their employment at the time and that both (in the case of decedent his beneficiaries) recovered benefits under the Oklahoma Workers' Compensation Act. 85 O.S.1981, § 1 et seq., as amended. Appellant also admitted the accident was caused by the negligence of the coemployee.

At the time of the accident there was in effect a comprehensive business insurance policy purchased by Mid-America Lumber, Inc. and issued by appellant, which contained an UM endorsement. The limit of UM coverage was $500,000.00. Appellant admits decedent was an insured under the endorsement by reason of his occupancy in the covered vehicle and the definition of insured in the policy. 2 In pertinent part the scope of coverage provided as follows:

In accordance with Title 36, Oklahoma Statutes, we will pay all sums the insured is legally entitled to recover as damages from the owner or driver of an uninsured motor vehicle. The damages must result from bodily injury sustained by the insured caused by the accident. The owner's or driver's liability for these damages must result from the ownership, maintenance or use of the uninsured motor vehicle. (bolding in original).

Appellee sued appellant to recover under the UM endorsement. The trial court ruled as a matter of law recovery was proper under the UM endorsement and the matter was tried to a jury on the amount of damages. Appellant does not dispute the appellee sought damages normally recoverable in a wrongful death action. The jury returned a verdict against appellant in the amount of $350,000.00. Thereafter, the trial court added prejudgment interest to the verdict from the date appellee's petition was filed against appellant to the date of verdict which amounted to $34,912.64.

On appeal appellant asserted the UM coverage did not apply based on an argument that because the negligent coemployee was immune from liability by virtue of the exclusivity provisions of the workers' compensation laws the insured was not legally entitled to recover damages from the tortfeasor. 3 It stressed the fact decedent was merely a Class 2 insured under the UM endorsement and on this basis sought to distinguish our holding in Barfield v. Barfield, 742 P.2d 1107 (Okla.1987), which ruled a premium paying Class 1 insured under his own policy of insurance was entitled to recover UM benefits even though the negligent tortfeasor was a coemployee immune under the workers' compensation laws. 4 Appellant also argued it would have no subrogation rights if recovery was allowed because of the immunity of the coemployee. It finally asserted error in allowing prejudgment interest under § 727(A)(2) because the claim against it was based in contract and the suit was not one by reason of personal injuries subject to the mandate of that provision. The Court of Appeals affirmed and we previously granted certiorari.

PART II. UM COVERAGE DOES EXIST FOR THE ACCIDENT IN

QUESTION NOTWITHSTANDING THE STATUTORY IMMUNITY OF
THE COEMPLOYEE

The phrase legally entitled to recover damages from owners or drivers of an uninsured motor vehicle in the instant insurance policy is derived from the statutory mandate of 36 O.S.1981, § 3636(A) and (B) which provide in pertinent part as follows:

(A) No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be issued, delivered, renewed, or extended in this state with respect to a motor vehicle registered or principally garaged in this state unless the policy includes the coverage described in subsection (B) of this section.

(B) The policy referred to in subsection (A) of this section shall provide coverage therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from the owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. (emphasis added).

On at least three occasions we have considered the meaning of the phrase. Barfield v. Barfield, supra; Karlson v. City of Oklahoma City, 711 P.2d 72 (Okla.1985); Uptegraft v. Home Insurance Company, 662 P.2d 681 (Okla.1983). In Uptegraft, in holding a suit to recover under an UM endorsement to a policy of insurance was contractual in nature and governed by the five year limitation period for written contracts found at 12 O.S.1981, § 95 (First), we said, "[t]he words 'legally entitled to recover' simply mean that the insured must be able to establish fault on the part of the uninsured motorist which gives rise to damages and prove the extent of those damages." 662 P.2d at 685. We rejected the view the phrase required an insured to establish all the elements of a viable claim in tort or that the timely filing of a claim against the tortfeasor within the two year limitation period found at 12 O.S.1981, § 95 (Third) was an indispensable requirement or condition to recovery against the UM carrier. Uptegraft, 662 P.2d at 685.

In Karlson we again construed the phrase legally entitled to recover damages. Relying on the meaning we had given the words in Uptegraft, we held an insured could recover under an UM endorsement amounts in excess of the limits of liability imposed by the Political Subdivisions Tort Claims Act, even though a section of that Act [51 O.S.1981, § 154] placed an upper monetary limit on the amount an injured party could recover against the tortfeasor municipality or its employee. Karlson, 711 P.2d at 74-75. We ruled the phrase meant only that the insured be able to establish fault on the part of the uninsured or underinsured motorist which gives rise to damages and the extent of those damages. Id. In so ruling we recognized our decision merely employed principles of contract interpretation which were geared toward effectuating the intention of the parties, an intention determined to be that where an insured suffered a loss which was not able to be compensated by the tortfeasor, it was the insurance company that would assume the risk of that loss, not the insured. Id.

Barfield was the next occasion we had to construe the phrase. There we ruled although the exclusivity provisions of the Oklahoma Workers' Compensation Act precluded recovery against the negligent coemployee tortfeasor, the widow of decedent could recover under the UM endorsement of decedent's own policy of insurance. We again cited Uptegraft in concluding the phrase legally entitled to recover damages simply means the insured must be able to establish fault on the part of the uninsured motorist which gives rise to damages and prove the extent of those damages. Barfield, 742 P.2d at 1112. We said:

An uninsured motorist carrier does not stand in the tortfeasor's shoes and the conditions for recovery under an uninsured motorist policy can be satisfied even if the insured cannot prove all the elements of the tort against the uninsured.

Id.

We further said in such regard:

The rationale and legal application of Uptegraft will permit no other conclusion than reached...

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