Andres v. Oklahoma Farm Bureau Mutual Insurance Co.

2012 OK CIV APP 93, 290 P.3d 15, 2012 Okla. Civ. App. LEXIS 77, 2012 WL 4936562
CourtCourt of Civil Appeals of Oklahoma
DecidedJune 12, 2012
DocketNo. 109,929
StatusPublished
Cited by3 cases

This text of 2012 OK CIV APP 93 (Andres v. Oklahoma Farm Bureau Mutual Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Andres v. Oklahoma Farm Bureau Mutual Insurance Co., 2012 OK CIV APP 93, 290 P.3d 15, 2012 Okla. Civ. App. LEXIS 77, 2012 WL 4936562 (Okla. Ct. App. 2012).

Opinion

P. THOMAS THORNBRUGH, Judge.

¶ 1 Plaintiff, Jennifer Andres, appeals from the trial court's entry of summary judgment in favor of Defendant, Oklahoma Farm Bureau Mutual Insurance Company (OFB), on Plaintiff's claim alleging OFB's bad faith conduct after remand of a related case between Plaintiff and OFB. For the reasons set forth below, we affirm the trial court's judgment.

BACKGROUND

¶ 2 This case has its origins in OFB's denial, in 2007, of Plaintiff's property damage claim resulting from a sewer line backup into [16]*16Plaintiff's home. Plaintiff filed an action1 against OFB asserting breach of contract and breach of the duty of good faith. In November 2008 the trial court granted summary judgment to OFB. In Andres v. Oklohoma Farm Bureau Mut. Ins. Co., 2009 OK CIV APP 97, 227 P.3d 1102 (Andres I), this Court affirmed in part and reversed in part. Our opinion noted that the trial court had refused Plaintiff's request for additional discovery prior to entering its judgment, which was based on the exclusion language of the homeowner's policy alone. We held that, although OFB had a reasonable basis for denying coverage and therefore was not liable for bad faith, Plaintiff's claim was in fact covered under OFB's policy. Thus, we held Plaintiff was entitled to judgment on her breach of contract claim as a matter of law. We remanded with directions to the trial court to enter judgment in Plaintiff's favor on the latter claim, and to "set the matter for trial on the issues of damages, attorney fees, and costs." Id. at ¶ 19, 227 P.3d at 1107. OFB sought certiorari, which was denied.

¶ 3 The matter now before us also is an appeal from a summary judgment in favor of OFB in an action filed by Plaintiff. This case is based on Plaintiffs allegation that OFB engaged in bad faith conduct following remand of Andres I, thereby giving rise to another claim for breach of the duty of good faith. The essence of Plaintiff's claim here, as described in her trial court briefings, is that after remand, "OFB did absolutely nothing to independently investigate and evaluate Plaintiff's claim so that it could pay her on it." Rather, Plaintiff complains that OFB "simply sat back and waited for Plaintiff to 'prove'" her claim's value "without ever prof-erring its own evaluation."2

¶ 4 The parties do not dispute the essential facts. In February 2010, after the Supreme Court denied certiorari in Andres I, OFB made an offer of judgment for $20,001, which was based on Plaintiff's 2007 handwritten list of expenses and damages totaling approximately $22,000 (less certain expenses that OFB disputed). Plaintiff did not accept the offer.

¶ 5 OFB then requested a scheduling order and sought further pretrial discovery as to Plaintiff's damages. Plaintiff objected that the matter should be set immediately for trial, and applied to the Supreme Court for a writ3 to prohibit the trial court from proceeding with discovery. On September 18, 2010, the Supreme Court denied Plaintiff's application to assume original jurisdiction.

¶ 6 In October 2010, the trial court entered a scheduling order setting a discovery cutoff date of February 18, 2011. In November 2010, Plaintiff served a witness and exhibit list containing the name of an expert witness to testify as to Plaintiffs restoration and other property damages. OFB asserted the expert had not previously been identified, and it had not previously seen the exhibits. Ultimately, the expert's report and other exhibits were provided, discovery continued, and Plaintiff filed a motion for summary judgment supported by an affidavit seeking damages of more than $94,000. OFB objected to the motion.

¶ 7 Plaintiff thereafter filed the action underlying this appeal, asserting OFB's bad faith.4 About a week later, OFB tendered an offer of judgment for $47,001 to Plaintiff to settle her breach of contract claim in Andres I. On March 7, 2011, Plaintiff accepted the offer, thus concluding the Andres I case on all issues except Plaintiff's attorney fees and costs.

¶ 8 OFB moved for summary judgment in this action. The trial court granted the motion. Plaintiff appeals.

STANDARD OF REVIEW

¶ 9 "Summary judgment is proper only when it appears that there is no substantial controversy as to any material fact and that [17]*17one of the parties is entitled to judgment as a matter of law." Jordan v. Jordan, 2006 OK 88, ¶ 17, 151 P.3d 117, 121 (quoting Seitsinger v. Dockum Pontiac, Inc., 1995 OK 29, 894 P.2d 1077). This Court reviews a grant of summary judgment de novo. Young v. Macy, 2001 OK 4, ¶ 9, 21 P.3d 44, 47. "In a de novo review we have plenary, independent and non-deferential authority to determine whether the trial court erred in its application of the law." Id. (citing Kluver v. Weatherford Hosp. Auth., 1993 OK 85, ¶ 14, 859 P.2d 1081, 1084).

ANALYSIS

¶ 10 As noted above, the essence of Plaintiff's bad faith cause of action here is her contention that OFB failed to initiate and pursue an independent investigation to evaluate her claim onee the appeal in Andres I was concluded. The parties do not cite, and we do not find, authority in Oklahoma or elsewhere involving a claim of bad faith arising from an insurer's exercise of its duty to an insured plaintiff on remand after coverage has been judicially determined. However, Oklahoma law is clear that an insurance company has a duty to its insured to conduct an investigation of a claim that is "reasonably appropriate under the cireumstances," and to "promptly settle the claim for the value or within the range of value assigned to the claim as a result of its investigation." Newport v. USAA, 2000 OK 59, ¶ 16, 11 P.3d 190, 196-97.

¶ 11 What is "reasonably appropriate under the circumstances," in terms of an investigation, of necessity will differ depending on the facts of a particular case. In this regard, it has been noted that "[olnce a court ... proceeding is commenced seeking insurance benefits, normal claim handling is superseded by the litigation proceeding." Allan D. Windt, 2 Insurance Claims and Disputes Sth: Representation of Insurance Companies & Insureds, § 9:28 (Database updated March 2012). The article continues:

The insurer retains counsel, and the insurer then relies upon its counsel to handle discovery in the context of the litigation proceeding. Accordingly, properly analyzed, an insurer cannot be guilty of bad faith because it does not conduct its own investigation, but instead relie[s] upon its counsel to conduct an investigation that is appropriate in a litigation context.

¶ 12Not inconsistently with this sentiment, the Court in Newport also made clear that its statement of an insurer's duty "is not to say that an insurer may not negotiate or litigate the value of the claim." 2000 OK 59 at 116, 11 P.3d at 197. Clearly, an insurer's right to engage in litigation in good faith has been recognized since the tort of bad faith was first recognized by the Oklahoma Supreme Court in Christian v. American Home Assur. Co., 1977 OK 141, ¶ 25, 577 P.2d 899

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2012 OK CIV APP 93, 290 P.3d 15, 2012 Okla. Civ. App. LEXIS 77, 2012 WL 4936562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/andres-v-oklahoma-farm-bureau-mutual-insurance-co-oklacivapp-2012.