Self Insurers' Management Group v. YWCA of Oklahoma City

1997 OK 95, 954 P.2d 115, 1997 Okla. LEXIS 90, 1997 WL 381865
CourtSupreme Court of Oklahoma
DecidedJuly 8, 1997
Docket86718
StatusPublished
Cited by7 cases

This text of 1997 OK 95 (Self Insurers' Management Group v. YWCA of Oklahoma City) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Self Insurers' Management Group v. YWCA of Oklahoma City, 1997 OK 95, 954 P.2d 115, 1997 Okla. LEXIS 90, 1997 WL 381865 (Okla. 1997).

Opinions

WATT, Justice.

This is an appeal from the judgment of the District Court of Oklahoma County, Oklahoma, Honorable Niles Jackson, Judge. The trial court granted summary judgment for the thirteen Defendants/Appellees listed in the style of this appeal, and against Plaintiff/Appellant, Self Insurors’ Management Group. On October 21, 1996, we withdrew this case from assignment to the Court of Civil Appeals because of its important public policy implications. On January 31, 1997 we ordered that jurisdiction be retained in this appeal and that it be made a companion case with Oklahoma Employers Safety Group, S.I.A. v. Colbert Nursing Homes, Inc., 1997 OK 94, 954 P.2d 120 (Okla.1997), decided this day, because it involves the same important public policy issues.

FACTS AND PROCEDURAL HISTORY

In 1981 the Legislature passed 85 O.S. 1981 § 149.1, which directed that “The Workers’ Compensation Court shall adopt rules permitting two or more employers ... to pool together liabilities under this act for the purpose of qualifying as a group self in-surer_” Section 149.1 allowed small employers to pool their risks of workers’ compensation liabilities and, thereby, spread their risk of loss among a far larger group of employers than an individual employer could do. By joining a group self-insurer, employers could avoid paying the profit built into a commercial insurance company’s workers’ compensation premiums. Those employers joining in the group however, jointly and severally undertook the risk of loss that insurance companies would otherwise have assumed.

In 1982 the Workers’ Compensation Court approved Self Insurors’ Management Group, then known as the Oklahoma City Drillers Association, to act as a group self-insurance association in accordance with § 149.1. The Association, with the approval of the Workers’ Compensation Court, changed its name to Self Insurors’ Management Group in 1984.

During the mid 1980s several hundred small employers, including the Defendants/Appellees, joined the Association. In 1989 the Association ceased to provide new coverages for its members because of heavy underwriting losses, but was authorized by the Administrator of workers’ compensation to continue business in order to wind up its affairs.

This long and tortured litigation began on November 3, 1989 when the Association filed this suit against hundreds of its members, including Defendants/Appellees. It sued for breach of its Application for Membership, Indemnity Agreement, and Power of Attorney that each of its members had executed upon joining the organization. Such agreements were required by Rule 3 of the Workers’ Compensation Court’s Rules, which governed group self-insurers. The Agreement stated that

Each and every Member jointly and severally agrees to assume, pay and discharge any liability under the [Workers’ Compen-. sation] ACT of any and all members of the ASSOCIATION and éach Member agrees to pay any assessments as may be required by the BOARD [of Directors of the Association].

In its original petition, the Association sought to require the payment of unpaid assessments that its members had failed to pay in violation of the terms of the Agreement. The Association filed an amended pe[117]*117tition on March 31, 1994 claiming that each named defendant was jointly and severally liable for $2,500,000, which was the aggregate amount owed to the Association by its members to cover the Association’s losses. Earlier, on December 3, 1991, the District Court of Oklahoma County, while the case was assigned to Judge Virgil C. Black, denied the “Defendants Motion for Summary Judgment” on the ground that the Agreements did not violate the securities laws. The record does not identify which defendants the 1991 order referred to, as those defendants’ motion for summary judgment was not made a part of the record on appeal.

On July 31, 1995 the Defendants/Appellees filed a motion for summary judgment in which they claimed that (1) the Agreements were unregistered securities and, therefore, illegal, unenforceable, and void; and (2) Plaintiff materially breached the Agreements. The trial court granted summary judgment for Defendants/Appellees and as part of its order allowed for an immediate appeal. This part of the order was made necessary because other defendants were not parties to Defendants/Appellees motion for summary judgment.

In its order, entitled “Final Journal Entry of Judgment Limited as to Certain Parties and Defendants,” the trial court confirmed its order granting Defendants/Appellees summary judgment and overruled Plaintiffs motion for new trial. The trial court based its ruling in favor of Defendants/Appellees on the following conclusions: (1) the Agreements were unregistered securities and could not be enforced against Defendants/Appel-lees, and (2) Plaintiff materially breached the Agreements because there was “no recognizable purpose for associating” among Association’s members, in violation of Workers’ Compensation Court Rules. The Rules relied on by the trial court, Rule 3, Sections 3(b) and (d), provide:

(b) “Group self-insurance association” or “association” means an association organized by two or more employers having a common interest which have entered into agreements under the Oklahoma Workers’ Compensation Act.
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(d) “Common interest” means employers engaged in the same or similar types of business or who otherwise have a recognizable common purpose for associating....
ISSUES
(1) Were the Agreements unregistered securities and therefore unenforceable against Defendants/Appellees?
(2) Did the trial court correctly rule that the Agreements violated Workers’ Compensation Court rules because there was no “common interest” between the Association’s members?

We answer no to each question.

DISCUSSION

I.

In this part of our opinion we will consider whether the Association’s Agreements with its members violated the Oklahoma Securities Act. For the reasons set forth in the balance of this part of the opinion we believe that the Agreements did not violate the Oklahoma Securities Act.

In 1996 the Legislature amended 85 O.S.Supp.1996 § 149.1 by adding subsection C, which states:

A group self-insurer created pursuant to this section either prior to or after the effective date of this act shall not be subject to the provisions of the Oklahoma Securities Act.

This amendment to § 149.1 makes abundantly clear the Legislature’s intention that the agreements of all members of all associations created under the terms of § 149.1, including the Agreements at issue here, are not covered by the Oklahoma Securities Act. We note that the trial court ruled that the Securities Act was violated without the benefit of the Legislature’s clear mandate to the contrary in its 1996 amendment to § 149.1.

Defendants/Appellees rely on the rule that the validity of a judgment must be measured by the law in force when it was rendered, citing Evans v. Evans, 852 P.2d 145 (Okla. 1993). The Evans rule does not apply here for two reasons. First, the judgment at is[118]*118sue in Evans was a final judgment.

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Self Insurers' Management Group v. YWCA of Oklahoma City
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1997 OK 94 (Supreme Court of Oklahoma, 1997)

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Bluebook (online)
1997 OK 95, 954 P.2d 115, 1997 Okla. LEXIS 90, 1997 WL 381865, Counsel Stack Legal Research, https://law.counselstack.com/opinion/self-insurers-management-group-v-ywca-of-oklahoma-city-okla-1997.