United States District Court, W.D. Oklahoma
MEMORANDUM OPINION AND ORDER
J, CAUTHRON UNITED STATES DISTRICT JUDGE
filed the present action asserting claims for breach of
contract and bad faith, arguing that Defendant failed to
properly and reasonably evaluate their claim and timely make
payments under uninsured motorist benefits. Defendant has
filed a Motion for Partial Summary Judgment, arguing that it
is entitled to judgment on Plaintiffs' claim for breach
of the duty of good faith and fair dealing.
October 9, 2012, Mr. Sober was involved in an accident with
Ms. Lacey Todd. Neither party reported an injury and neither
party appeared injured to the officer who investigated the
accident. Approximately two months after the accident, Mr.
Sober went to see his chiropractor complaining of pain in his
back, neck, and right leg. The chiropractor saw Mr. Sober
five times between December 3rd and December 12th, and noted
that at the end of the last appointment there was significant
improvement. According to the chiropractor's notes, Mr.
Sober's back and right leg pain were completely resolved
and his neck pain was significantly improved.
December 14, 2012, Mr. Sober underwent an elective
colonoscopy. On the way home from that procedure, Mr. Sober
noted he was hungry and asked his wife to pull over and stop
at McDonald's. After eating a few bites of food, he began
to feel ill, so Mrs. Sober pulled over and stopped the car.
Mr. Sober unbuckled his seat belt, opened his door, and
leaned out. He then fainted, falling face first to the
ground. Immediately following the fall, Mr. Sober had
paralysis in his upper and lower body and could not move. He
was transported by ambulance to Ponca City Medical Center and
then medi-flighted to St. John's Medical Center in Tulsa.
He was found to have a spinal contusion from the C2 vertebrae
all the way down to the C5, with acute onset of loss of motor
function. As a result of the December 14th fall, Mr. Sober is
paralyzed from his neck down. Mr. Sober then retained counsel
who made notice to Defendant of a potential uninsured
motorist claim arising from the October 9, 2012, accident
with Ms. Todd.
obtaining medical records from Plaintiffs' attorney and
Mr. Sober's medical providers, Defendant submitted that
information to a board-certified neurologist, Dr. Mark
Fisher, and Dr. Fisher presented his opinion in a report back
to counsel for Defendant. In that report, Dr. Fisher opined
that Mr. Sober's paralysis was the result of the fall and
was not related to the earlier auto collision with Ms. Todd.
Plaintiff provided some additional statements from family
members who discussed Mr. Sober's injury with the
physician treating him shortly after his fall. Based on those
affidavits, Dr. Fisher made some slight adjustments to his
opinion, but continued to hold to the opinion that the auto
accident did not cause the paralysis, but the paralysis arose
solely as a result of the fall from the car. Ultimately
Defendant denied any responsibility for payment of the claim
and this litigation ensured. As noted, Defendant now seeks
summary judgment on Plaintiffs' bad faith claim.
judgment is appropriate if the pleadings and affidavits show
there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). “[A] motion for summary judgment
should be granted only when the moving party has established
the absence of any genuine issue as to a material
fact.” Mustang Fuel Corp. v. Youngstown Sheet &
Tube Co., 561 F.2d 202, 204 (10th Cir. 1977). The movant
bears the initial burden of demonstrating the absence of
material fact requiring judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). A fact is material if it is essential to the proper
disposition of the claim. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). If the movant
carries this initial burden, the nonmovant must then set
forth specific facts outside the pleadings and admissible
into evidence which would convince a rational trier of fact
to find for the nonmovant. Fed.R.Civ.P. 56(e). These specific
facts may be shown by any of the kinds of evidentiary
materials listed in Rule 56(c), except the mere pleadings
themselves. Celotex, 477 U.S. at 324. Such
evidentiary materials include affidavits, deposition
transcripts, or specific exhibits. Thomas v. Wichita
Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir.
1992). The burden is not an onerous one for the nonmoving
party in each case, but does not at any point shift from the
nonmovant to the district court. Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 672 (10th Cir. 1998). All
facts and reasonable inferences therefrom are construed in
the light most favorable to the nonmoving party.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).
argues it is entitled to summary judgment on the bad faith
claim because a legitimate dispute exists as to whether or
not there is coverage. Defendant relies on the Tenth
Circuit's statement in Oulds v. Principal Mutual Life
Insurance Co., 6 F.3d 1431, 1436 (10th Cir. 1993)
(quoting McCoy v. Oklahoma Farm Bureau Mutual Insurance
Co., 1992 OK 43, ¶ 21, 841 P.2d 568, 572), where
the Tenth Circuit stated, “[t]he insurer will not be
liable for the tort of bad faith if it ‘had a good
faith belief, at the time its performance was requested, that
it had a justifiable reason for withholding payment under the
policy.'” Defendant also notes that the Oklahoma
Supreme Court in Badillo v. Mid Century Insurance
Co., 2005 OK 48, ¶ 28, 121 P.3d 1080, 1093-94,
stated even an erroneous claim denial will not give rise to
bad faith liability where it is based upon a good faith
belief and some justifiable reason for the denial. Here,
Defendant argues that it had a good faith belief that it had
a justifiable reason for withholding payment of the UIM
claim. In support, Defendant points to the reports of Dr.
Fisher indicating no causal connection between the auto
accident and the subsequent spinal cord injury. Defendant
notes that it is entitled to a jury determination that Dr.
Fisher is incorrect and that in fact Mr. Sober's
paralysis did arise from injuries received in the collision
with Ms. Todd, before it is obligated to make a UIM payment.
Court finds Defendant's position well supported. The
Oklahoma Supreme Court has noted that the Court is charged
with serving as the gate-keeper and must make a first
determination of whether or not the insurance company's
conduct can be considered tortious. Garnett v. Gov't
Emp.'s Ins. Co., 2008 OK 43, ¶ 22, 186 P.3d
935, 944. In its role as gatekeeper, the Court considers
Plaintiffs' theory of liability.
argument that Defendant acted in bad faith in denying the UIM
claim is that Mr. Sober had a medical condition which made
him more susceptible to the fall and that the earlier
accident exacerbated that condition. The combination of these
factors made paralysis a more likely event when he fell out
of the car. There is evidence in the record to support
Plaintiffs' argument. Plaintiffs then rely on
Atherton v. Devine, 1979 OK 132, 602 P.2d 634, where
the Oklahoma Supreme Court held that a tort-feasor is liable
for damages caused by negligent medical treatment performed
as result of their negligence. On this precedent,
Plaintiffs' argue that Defendant is responsible for the
negligent medical treatment provided by the chiropractor.
Plaintiffs argue Defendant's failure to accept this
theory and pay the UIM claim is bad faith. It is here that
Plaintiffs stretch the duty imposed on Defendant too far. It
may well be that a jury would agree with Plaintiffs that this
sequence of events is what caused Mr. Sober's injury.
That, however, does not give rise to a claim for bad faith on
Defendant's part for taking the alternative position.
Indeed, the Atherton issue, as Plaintiffs term it,
is relevant on the claim for the breach of the contract; that
is, does Defendant owe payment under the policy? However, the
existence of the question of fact that Atherton
creates on the contract issue negates any duty by Defendant
to pay without resolution of the dispute. As the Oklahoma
Supreme Court stated in Christian v. Am. Home Assur.
Co., 1977 OK 141, 577 P.2d 899:
We do not hold that an insurer who resists and litigates a
claim made by its insured does so at its peril that if it
loses the suit or suffers a judgment against it for a larger
amount than it had offered in payment, it will be held to
have breached its duty to act fairly and in good faith and
thus be liable in tort.
Id. at 904-05.
assuming Plaintiffs have met their burden of establishing a
prima facie case of bad faith, Defendant has countered that
showing by providing proof of a legitimate dispute as to
coverage. The burden now shifts to Plaintiffs to demonstrate
additional evidence of bad faith. See Timberlake Constr.
Co. v. U.S. Fid. & Guar. Co., 71 F.3d 335, 344 (10th
Cir. 1995). Plaintiffs have not met this burden. While
ultimately a jury may determine that the injuries from the
chiropractic care, received as a result of the accident with
Ms. Todd, did exacerbate Mr. Sober's pre-existing medical
condition and make him more likely to ...