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Surfside Japanese Auto Parts and Service v. Berkshire Hathaway Homestate Insurance Co.

United States District Court, N.D. Oklahoma

June 27, 2019

SURFSIDE JAPANESE AUTO PARTS AND SERVICE, Plaintiff,
v.
BERKSHIRE HATHAWAY HOMESTATE INSURANCE COMPANY, Defendant.

          OPINION AND ORDER

          TERENCE C. KERN UNITED STATES DISTRICT JUDGE.

         Before the court is the Motion to Dismiss Count II of Plaintiff's Amended Complaint filed by defendant, Berkshire Hathaway Homestate Insurance Company. Doc. 30. In its motion, defendant seeks dismissal of plaintiff Surfside Japanese Auto Parts and Service's bad faith claim. Plaintiff opposes the motion.

         I. Allegations of the First Amended Complaint

         The First Amended Complaint alleges that the parties entered into a contract to insure real and personal property located at 6247 E. 15th Street in Tulsa from casualty lost, effective from August 15, 2016, to August 15, 2017. Doc. 18, ¶5. On or about May 11, 2017, the property sustained a casualty loss as the result of a hailstorm-a covered loss. Id., ¶6. Plaintiff submitted estimates for damage from third parties to facilitate payment of the claim in the amount of $79, 251.56. Id.

         On October 20, 2017, defendant sent a letter denying coverage of the claim. Id., ¶7. The sole basis for the denial was the opinion of an engineer retained by defendant which “concluded the hail damage that damaged the roof was likely from 4/23/11 or earlier.” Id. Thus, defendant claimed the hail damage occurred outside the policy period and denied coverage for the claim. Id.

         The First Amended Complaint alleges that, upon information and belief, defendant “turned over all claims handling responsibilities to its retained third-party engineer and later solely relied upon the engineer's findings to support the denial in violation of its non-delegable duty of good faith and fair dealing, ” and “[d]efendant's engineer ignored relevant weather data showing numerous hailstorms during the coverage period with hail sufficient in size and wind sufficient in speed to cause the damage at issue, which would have made this loss covered under the Policy.” Id., ¶8. Furthermore, “[d]efendant knowingly refused to provide a copy of the engineering report to the insured and its representatives, misleading the insured about the information therein and the insurer's obligations under Oklahoma law with regard to disclosing relevant information applicable to the claim and to coverage under the Plaintiff's policy.” Id., ¶9. Plaintiff alleges that “defendant's refusal to pay the claim in full amounts to a breach of contract and a violation of its non-delegable duty of good faith and fair dealing.” Id., ¶10.

         Plaintiff asserts claims for breach of contract and bad faith, and seeks compensatory and punitive damages, interest and attorney's fees. With respect to the bad faith claim, the Complaint alleges that Defendant:

• Failed to fully disclose to Plaintiff “benefits, coverages, or other provisions of any insurance policy or insurance contract when such benefits, coverages or other provisions are pertinent to the claim;”
• Knowingly misrepresented to Plaintiff pertinent facts or policy provisions relating to coverage at issue; • Failed to adopt and implement reasonable standards for prompt investigations of claims arising under the insurance policies or insurance contracts;
• Did not attempt in good faith the effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear; and
• Without just cause, compelled Plaintiff to institute suit to recover amounts due under its insurance policies or insurance contracts by offering substantially less than the reasonable amount to repair the damages covered under Plaintiff's policy;
• Failed to promptly provide (within 30 days) necessary claims forms, instruction, and reasonable assistance so that Plaintiff could comply with policy conditions;
• Failed to promptly provide (within 45 days) acceptance or denial of the claim; and
• Failed to promptly complete the investigation (within 60 days) after ...

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