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Stand v. Hudson Insurance Co.

United States District Court, N.D. Oklahoma

November 2, 2017




         Now before the Court are the Motion for Judgment on the Pleadings and Brief in Support of Defendant Hudson Insurance Company (Dkt. # 17) and plaintiff Tristan Stand's counter-motion for judgment on the pleadings (Dkt. # 21). Defendant Hudson Insurance Company (Hudson) argues that plaintiff cannot recover uninsured/underinsured motorist (UIM) benefits under his employer's insurance policy with Hudson, because the vehicle involved in the automobile accident had liability coverage up to $10 million and the vehicle was fully insured. Plaintiff responds that his employer is immune from suit and plaintiff cannot recover under his employer's automobile liability policy, and that there are decisions by the Oklahoma Supreme Court directly on point that allow him to recover UIM benefits under these circumstances.


         Plaintiff alleges that he was employed as a fireman for the Quapaw Tribe of Oklahoma (the Tribe) and, on September 7, 2016, he was involved in a single-vehicle accident while operating a Tribal vehicle. Dkt. # 2, at 2. Plaintiff claims that the vehicle was poorly maintained by the Tribe, and the vehicle rolled over after a tire blowout. Id. Plaintiff suffered serious personal injuries in the accident. Hudson issued a multi-line sovereign nation commercial insurance policy to the Tribe that provides, inter alia, automobile liability coverage up to $10 million per occurrence and UIM coverage up to $1 million per occurrence.[1] Dkt. # 17-1. However, the policy does not provide coverage for any liability that is covered by the Tribe's workers' compensation laws. Id. at 34. The parties do not dispute that plaintiff was acting within the scope of his employment at the time of the accident and that plaintiff can seek benefits under the Tribe's workers' compensation regime.[2] D k t . # 20, at 2.

         Plaintiff filed this case seeking a declaratory judgment that he is entitled to UIM benefits under the Tribe's insurance policy, and he originally named Tribal First as the named defendant. Dkt. # 2. Hudson filed a motion to substitute parties and plaintiff agreed that Hudson was the proper defendant. Dkt. # 13. The parties filed a joint status report (Dkt. # 11), wherein Hudson asked the Court to enter a briefing schedule on the issue of the status of the Tribe as an uninsured or underinsured party. Dkt. # 11, at 3. Hudson argues that the vehicle plaintiff was driving was fully insured, even though coverage was excluded for plaintiff's claim, and Hudson asserts that plaintiff cannot recover UIM benefits under the policy. Id. The Court entered a briefing schedule, and Hudson filed a motion for judgment on the pleadings asserting that plaintiff cannot recover UIM benefits. Plaintiff has filed a response and counter-motion for judgment on the pleadings asking the Court to declare that he is entitled to UIM benefits.[3]


         Under Fed.R.Civ.P. 12(c), a party may file a motion for judgment on the pleadings after the pleadings are closed but “early enough not to delay the trial.” A motion for judgment on the pleadings under Rule 12(c) is reviewed under the same standards applicable to motions under Rule 12(b)(6). Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). In considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a court must determine whether the claimant has stated a claim upon which relief may be granted. A motion to dismiss is properly granted when a complaint provides no “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must contain enough “facts to state a claim to relief that is plausible on its face” and the factual allegations “must be enough to raise a right to relief above the speculative level.” Id. (citations omitted). “Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Id. at 562. Although decided within an antitrust context, Twombly “expounded the pleading standard for all civil actions.” Ashcroft v. Iqbal, 556 U.S. 662, 683 (2009). For the purpose of making the dismissal determination, a court must accept all the well-pleaded allegations of the complaint as true, even if doubtful in fact, and must construe the allegations in the light most favorable to a claimant. Twombly, 550 U.S. at 555; Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007); Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1231 (10th Cir. 2002).


         Hudson argues that the vehicle involved in the accident had $10 million in liability coverage, and that the vehicle cannot be deemed uninsured or underinsured as a matter of Oklahoma law. Plaintiff responds that the amount of liability coverage is irrelevant in this case, because the Tribe is immune from suit under its workers' compensation laws and he is not precluded from seeking UIM benefits from the Tribe's insurer.

         As a matter of Oklahoma law, no automobile liability insurance policy shall be issued, delivered, renewed, or extended unless the policy provides the minimum amount of UIM coverage required by statute. Okla. Stat. tit. 36, § 3636.A. “The purpose of an uninsured motorist provision in an insurance contract is to protect the insured from the effects of personal injury resulting from an accident with another motorist who carries no insurance or is underinsured.” Uptegraft v. Home Ins. Co., 662 P.2d 681, 684 (Okla. 1983). Section 3636 defines “uninsured motor vehicle” as “insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency” or the “liability limits of [the policy] are less than the amount of the claim of the person or persons making such claim, regardless of the amount of either of the parties in relation to each other.” Okla. Stat. tit. 36, § 3636.B. The Oklahoma Supreme Court has construed this provision “liberally in favor of the object to be accomplished, ” and the statutory definition of “uninsured motor vehicle” must be read in light of the strong public policy of protecting an insured from personal injuries caused by an uninsured or underinsured motorist. State Farm Auto Ins. Co. v. Greer, 777 P.2d 941, 942 (Okla. 1989). The insured has the burden to show that all preconditions for UIM coverage exist before he can recover UIM benefits from his insurer. Gates v. Eller, 22 P.3d 1215, 1219 (Okla. 2001). The Oklahoma Supreme Court has stated that a claim for UIM benefits has four elements:

1) the injured person is an insured under the [UIM] provisions of a policy; 2) the injury to the insured has been caused by an accident; 3) the injury to the insured has arisen out of the “the ownership, maintenance or use” of a motor vehicle; and 4) the injured insured is “legally entitled to recover damages from the owner or operator of the uninsured motor vehicle.”

Ply v. National Union Fire Ins. Co. of Pittsburgh, Pennsylvania, 81 F.3d 643, 647 (Okla. 2003).

         The meaning of the phrase “legally entitled to recover damages” has frequently been disputed, and the Oklahoma Supreme Court has liberally interpreted this language. UIM coverage is direct and primary insurance coverage and an insured does not have to proceed against a tortfeasor before seeking UIM benefits. Assalone v. Hartford Acc. & Indem. Co., 908 P.2d 812, 814 (Okla.Civ.App. 1994). An insured may seek UIM benefits from an insurer even after the statute of limitations to bring a claim against the tortfeasor has expired. Gates, 22 P.3d at 1219. The insured seeking UIM benefits must prove that the uninsured motorist is at fault for the accident, but the insured is not required to obtain a judgment against the uninsured motorist. Lamfu v. GuideOne Ins. Co., 131 P.3d 712, 714-15 (Okla.Civ.App. 2005). UIM coverage is available as long as the insured establishes the fault of the uninsured motorist, even if the insured could not prove all of the elements of a tort claim against the uninsured motorist. Barfield v. Barfield, 742 P.2d 1107, 1112 (1987).

         The Oklahoma Supreme Court has considered whether UIM benefits are available in the context of the employer/employee relationship when the exclusive remedy of workers' compensation law would prevent the injured employee from bringing a tort claim against his employer. In Barfield, an employee was a passenger in a company vehicle being driven by a co-worker, and the employee was killed in a single-vehicle accident that occurred with the scope of employment. 742 P.2d at 1109. The employee's widow recovered workers' compensation benefits from the employer, but she also sought UIM benefits from the decedent's insurer. Id. The Oklahoma Supreme Court found that the widow could not proceed with a tort claim against the co-worker's estate, but the exclusive remedy provision of Oklahoma's workers' compensation laws did not preclude a contractual claim for UIM benefits against the decedent's own insurer. Id. at 1112. A key part of the Oklahoma Supreme Court's reasoning was that the decedent had paid for protection from uninsured or underinsured motorists, and the decedent's estate should not be denied UIM benefits simply because of the circumstances under the which the accident occurred. Id. at 1112-13. The Oklahoma Supreme Court found no conflict between the exclusive remedy provision of the workers' compensation laws and § 3636, even though the decedent's UIM carrier would have no right of subrogation against the tortfeasor. Id. at 1112. The insurance carrier could not rely on third party tort immunity as a basis to deny UIM coverage, because it ...

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