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Roe v. Harco National Insurance Co.

United States District Court, N.D. Oklahoma

November 21, 2017

SHELBY ROE, Plaintiff,


          James H. Payne United States District Judge.

         Before the Court is Defendant's Motion for Summary Judgment (Dkt. 41). After consideration of the briefs, and for the reasons stated below, the Motion is GRANTED.


         The material facts regarding the underlying incident are undisputed. In August 2009, Timothy Roe test drove a commercial truck owned by Frontier International Trucks. Shelby Roe (“Plaintiff”), Timothy Roe's minor daughter, was a passenger. During the test drive, another motorist struck Timothy Roe's vehicle, causing injuries to both Timothy and Plaintiff. The commercial truck was covered by an automobile policy (“Policy”) with uninsured/underinsured motorist coverage (“UM/UIM”) issued by Defendant Harco National Insurance Company (“Harco”). (Dkt. 41-1 (Policy)). The Policy indicates that the UM/UIM coverage amounted to a combined single limit of $500, 000.00 on each accident, and that Plaintiff and Timothy Roe qualified as “insureds” under the Policy. (Policy, at Garage Declarations (p. 150 of 246); id. at Oklahoma Uninsured Motorists Coverage (B) (p. 183 of 246); Dkt. 41, at 2 (Harco's Undisputed Material Fact Nos. 2-5)).

         On October 30, 2009, Plaintiff's counsel (who also represented Timothy Roe) notified Harco of the accident and filed a claim for UM/UIM benefits on behalf of Timothy Roe. (Dkt. 58-1 (Harco Claims File Notes), at 1; Dkt. 58, at 3 (Plaintiff's Controverted [sic] Fact No. 1)). On May 4, 2011, Plaintiff's counsel sent Harco a claim letter seeking UIM coverage on Plaintiff's behalf. (Dkt. 58-3 (Letter to Harco dated May 4, 2011)). Harco's investigator, Kathy Van Ryn, evaluated Plaintiff's claim and determined it was not worth more than $25, 000, the liability limit of the tort feasor's insurance. (Dkt. 65-3 (Kathy Van Ryn Deposition), 90:11-15). Harco paid $500, 000 to Timothy Roe in three installments, making the final payment in May 2013. (Dkt. 41-5 (Release)).

         On October 9, 2014, Plaintiff's counsel sent Harco a letter regarding Shelby Roe's claim arising out of the August 2009 accident, seeking $31, 303.39 in medical damages. (Dkt. 41-6 (Letter)). Harco has not tendered any payment on Plaintiff's claim, asserting the UM/UIM policy limit was exhausted by payment to Timothy Roe. (Dkt. 58, at 7 (Plaintiff's Controverted Fact No. 42)).

         Plaintiff filed an Amended Complaint in this case on October 24, 2016, asserting claims for breach of contract and bad faith. (Dkt. 30). The parties have since stipulated to dismissal with prejudice of the breach of contract claim. (Dkt. 92). With respect to the bad faith claim, Plaintiff alleges Hacro acted in bad faith in failing to apportion benefits to Plaintiff and to investigate and evaluate Plaintiff's claims. (Dkt. 30, ¶¶ 10-12). Harco has now filed a Motion for Summary Judgment with respect to the sole remaining claim of bad faith. (Dkt. 41). Plaintiff filed a Response in opposition (Dkt. 58), and Harco filed a Reply (Dkt. 65). Harco's Motion is now fully briefed and ripe for review.


         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is genuine if the evidence is such that “a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it “might affect the outcome of the suit under the governing law.” Id. In making this determination, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.

         However, a party opposing a motion for summary judgment may not simply allege there are disputed issues of fact; rather, the party must support its assertions by citing to the record or by showing the moving party cannot produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c). See Cone v. Longmont United Hosp. Ass'n, 14 F.3d 526, 530 (10th Cir. 1994) (“Even though all doubts must be resolved in [the nonmovant's] favor, allegations alone will not defeat summary judgment.”) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). Moreover, “[i]n a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that something will turn up at trial.” Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988) (citations omitted). Thus, the inquiry for this Court is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. At 251-52.

         I. Bad Faith - Failure to Apportion Coverage

         Plaintiff asserts in the Amended Complaint that Harco breached its duty to apportion payment to Plaintiff, which raises a claim for bad faith. In its Motion, Harco argues that no such duty of apportionment exists in Oklahoma, pointing out that the Supreme Court of Oklahoma has never held or even spoken on the issue of apportionment of coverage in this context. In the absence of authority from the Oklahoma Supreme Court, Harco contends it did not breach any obligations under the Policy.

         In Oklahoma, insurers owe their insureds an implied duty to act fairly and in good faith. Willis v. Midland Risk Ins. Co., 42 F.3d 607, 611 (10th Cir. 1994). A party alleging bad faith must prove that (1) the claimant was entitled to coverage under the insurance policy; (2) the insurer had no reasonable basis for withholding payment; (3) the insurer did not deal fairly and in good faith with the claimant; and (4) the insurer's violation of its duty of good faith and fair dealing was the direct cause of the claimant's injury. Ball v. Wilshire Ins. Co., 221 P.3d 717, 724 (Okla. 2009). “The absence of any one of these elements defeats a bad faith claim.” Id. The key question in a bad faith tort claim is “whether the insurer had a good faith belief, at the time its performance was requested, that it had a justifiable reason for withholding . . . payment under the policy.” Id. at 725 (quotation omitted).

         When the insurer's obligation under the duty of good faith and fair dealing is unresolved by conclusive, precedential legal authority, the elements of unreasonableness and bad faith are necessarily absent as a matter of law. Id. (“If there is a legitimate dispute concerning coverage or no conclusive precedential legal authority requiring coverage, withholding or delaying payment is not unreasonable or in bad faith.”) (citing Skinner v. John Deere Ins. Co., 998 P.2d 1219, 1223 (Okla. 2000)). If an insurer's ...

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