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Tolman v. Reassure America Life Insurance Co.

Court of Appeals of Oklahoma, Division III

November 20, 2015

EMERY ZANE TOLMAN, Plaintiff/Appellee/Counter-Appellant,
REASSURE AMERICA LIFE INSURANCE COMPANY, formerly known as Valley Forge Life Insurance Company, Defendant/Appellant/Counter-Appellee, and BANK of the LAKES, National Association, Lake Bancshares Corporation and J.P. Morgan Chase Bank, N.A., Defendants.

          Mandate Issued: 03/21/2017


          Michael S. Linscott, Jon E. Brightmire, Tulsa, Oklahoma, for Defendant/Appellant/Counter-Appellee,

          Timothy G. Best, Matthew B. Free, Benjamin D. Reed, Tulsa, Oklahoma, for Plaintiff/Appellee/Counter-Appellant.

          Larry Joplin, Judge

         ¶1 This matter came on for jury trial on April 28, 2014 and the jury rendered its verdict in Emery Zane Tolman's favor on May 2, 2014. Plaintiff/Tolman was awarded $450, 000 in actual damages against two defendants, Reassure America Life Insurance Co. (Appellant) and Bank of the Lakes (Bank). Reassure and the Bank were each apportioned 50% liability for the injuries to Tolman. Additionally, the jury found in favor of Defendant, J.P. Morgan Chase. Reassure moved for a judgment notwithstanding the verdict under 12 O.S. §698, arguing that its motion for directed verdict should have been granted as to Appellee's negligence claim. The trial court denied Reassure's motion and prejudgment interest of $106, 539.05 was included in the judgment, per 12 O.S. §696.3 (A)(2). From this judgment only Reassure appeals.

         ¶2 Appellee's wife passed away in 2009 at the age of 43. Mrs. Tolman had a life insurance policy with Reassure America Life Insurance Co., the Appellant, for $100, 000. Appellee, Emery Zane Tolman, was the named beneficiary on the life insurance policy. Shortly after Mrs. Tolman's death on January 22, 2009, Mr. Tolman submitted the claim to Reassure. Reassure issued the check which Mr. Tolman deposited with Bank of the Lakes on February 27, 2009. The check from Reassure indicated "Bank One, N.A" as the drawee bank.

         ¶3 The Bank teller who accepted Tolman's check for deposit was suspicious of the check, because Bank One had not been an existing institution for some time, having been acquired by J.P. Morgan in 2004. For this reason the teller attempted to contact someone at Bank One, but the phone numbers had been disconnected. Due to the teller's concerns about the check, which were expressed to Tolman, and the Bank teller not being able to reach anyone at Bank One, Tolman contacted his Reassure agent and was given a contact name at the insurance company. Tolman shared the contact name with the teller. The teller then left a message with the company contact asking his call be returned.

         ¶4 Tolman learned as the day progressed that the Bank suspected the check to be fraudulent. After hearing of the Bank's fraud suspicions, Tolman again contacted Reassure; he spoke to both the customer service center and again to the internal company contact. The company contact told Tolman she was not sure what was going on, the check was valid, and she would investigate the matter to find out what was going on and get back with Tolman. However, the Reassure contact never got back with him, nor is there any evidence she investigated or inquired into the matter for Tolman.

         ¶5 Remarkably, the Bank manager and the teller went to the Catoosa Police Department on the 27th, the day Tolman deposited the check, and filed a complaint against Tolman, asserting the check was "in a range of checks" reported as fraudulent by Reassure and that Tolman had "claimed his wife died" to explain the origin of the check. The Bank manager said she had spoken to a representative at J.P. Morgan Chase who the Bank manager said had informed her the check was in the range of fraudulent checks. The Chase representative testified at the trial and denied saying anything to the Bank manager regarding the check being "in a range of fraudulent check numbers."

         ¶6 The check cleared on March 2, 2009, the next business day after being deposited, which might explain why Tolman's banking expert testified that better banking practices would have been to track the check to determine if it was valid prior to contacting law enforcement. Tolman was not able to access any of the funds until March 16th, as the bank had placed a hold on the funds until that date. However, after filing a criminal complaint against Tolman, the Bank manager did not follow the payment of the check and was not aware when the check cleared. She did nothing in the intervening two weeks between the deposit and Tolman's accessing the funds to confirm the status of the check, nor did she update the information she had given to the police on February 27th.

         ¶7 And there, the matter laid, until June 28, 2009, when Tolman received a call from his mother informing him he was charged with a felony, uttering a forged instrument, and that the charges were listed in the local paper. Tolman sought the advice of an attorney and turned himself in to the police to avoid having the police arrest him at his office or his home. He was booked, had his mug shot taken and was released the same day, having already secured the services of a bail bondsman. His attorney contacted Reassure. Thereafter, Reassure sent a letter which Tolman's attorney was able to present to the district attorney's office explaining the check was not a fraudulent instrument and the charges were dismissed and eventually expunged. In October 2009, Tolman filed suit against Reassure, Bank of the Lakes, and J.P. Morgan Chase, resulting in the jury's verdicts on May 2, 2014.

         ¶8 Appellant, Reassure, asserts four propositions of error on appeal. First, Reassure claims the trial court erred in permitting Tolman's negligence claim against the insurance company to proceed to the jury, because no such cause of action for negligence by an insured against the insured's insurance company is recognized under Oklahoma law. Second, even if a claim for negligence existed, the trial court erred in failing to direct a verdict in Reassure's favor, because Reassure's conduct was not the direct cause of Tolman's injuries. Third, intervening causes broke the causal chain of connection between Reassure's conduct and Tolman's injuries. And finally, the trial court erred in failing to instruct the jury that attorney fees are not an element of damages in a negligence case.

         ¶9 When this suit was initially filed, Tolman raised breach of contract, bad faith and breach of fiduciary duty in his claims against Reassure. Then, at the pretrial, Tolman added the negligence claim. Reassure objected and the trial court overruled Reassure's objection. While recognizing a tort claim of bad faith dealing by an insured against one's insurer in Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899, ...

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