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Mayes-Tyler v. Geico General Insurance Co.

United States District Court, W.D. Oklahoma

October 28, 2019




         Defendant, GEICO General Insurance Company (hereinafter “GEICO”) has filed a Motion for Partial Summary Judgment (Dkt. 22) pursuant to Rule 56(a) of the Federal Rules of Civil Procedure. Plaintiff, Melonie M. Mayes-Tyler, filed a Response (Dkt. 27) on May 6, 2019. GEICO's Reply (Dkt. 30) was filed May 8, 2019. Upon review of the parties' filings, the Court DENIES Defendant's Motion for Partial Summary Judgment (Dkt. 22) as set forth more fully below.

         Burden of Proof

         Rule 56(a) provides that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” In deciding whether summary judgment is proper, the court does not weigh the evidence and determine the truth of the matter asserted, but determines only whether there is a genuine dispute for trial before the fact-finder(s).[1] The movant bears the initial burden of demonstrating the absence of a genuine, material dispute and an entitlement to judgment.[2] A fact is “material” if, under the substantive law, it is essential to the proper disposition of the claim.[3] A dispute is “genuine” if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.[4]

         If the movant carries the initial burden, the nonmovant must then assert that a material fact is genuinely dispute and must support the assertion by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials”; by “showing that the materials cited [in the movant's motion] do not establish the absence . . . of a genuine dispute”; or by “showing . . . that an adverse party [i.e., the movant] cannot produce admissible evidence to support the fact.”[5] The nonmovant does not meet its burden by “simply show[ing] there is some metaphysical doubt as to the material facts, ”[6] or by theorizing a “plausible scenario” in support of its claims.[7] “Rather, ‘the relevant inquiry 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.'”[8] If there is a genuine dispute as to some material fact, the district court must consider the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving party.[9]

         Undisputed Material Facts

         Included here are those material facts supported by the record and not genuinely disputed in the manner required by Rule 56(c). These facts are now established in the case pursuant to Rule 56(g).

         On August 29, 2015, non-party Jared Hill turned his truck left at the intersection of Southwest Boulevard and W. 17th Street in Tulsa, Oklahoma, thereby placing his truck in the path of an oncoming sedan occupied by non-party Jermel Tyler (the driver) and Plaintiff Melonie Mayes-Tyler (a passenger) and causing a collision. Plaintiff sustained injuries to her neck, back, left and right shoulder, right wrist, left and right knees, and ankle as a result. During the ensuing seventeen months-i.e., from August 2015 to January 2017-Plaintiff received medical treatment from various providers, including arthroscopic surgery to repair a partial tear to the rotator cuff in her left shoulder. The Plaintiff's medical expenses related to this collision total $50, 649.13.

         At the time of the wreck, Mr. Hill was insured under an automobile liability insurance policy issued by Defendant GEICO that had policy limits of $100, 000 per person/$300, 000 per occurrence.[10] Also at the time of the wreck, Plaintiff was insured under an automobile UM/UIM insurance policy, No. 0761-50-87-04, issued by Defendant GEICO that had policy limits of $50, 000 per person/$100, 000 per occurrence.[11]

         Plaintiff made claims against both Mr. Hill's liability policy and her own UM/UIM policy within days after the wreck. Plaintiff's liability claim was handled by at least two GEICO adjusters, Chris Schools and Teresa Euziere; and her UIM claim was handled by at least three GEICO adjusters, Tamara Burch, Kat Herron, and Amy Grieco. GEICO admitted that Mr. Hill was liable for Plaintiff's loss as early as September 4, 2015.[12] After Plaintiff's doctors released her from treatment in January 2017, her first attorney submitted a settlement demand to GEICO on March 3, 2017, seeking liability policy limits of $100, 000 and UIM policy limits of $50, 000.[13] On March 20, 2017, Mr. Schools offered to settle Plaintiff's liability claim for $74, 424.13.[14] Two days later, Ms. Burch denied Plaintiff's UIM claim because “there d[id] not appear to be UIM exposure at th[at] time” in light of the tortfeasor's liability limits and the injuries disclosed in the settlement demand package.[15] Plaintiff then hired her current counsel.

         Plaintiff's new counsel continued to pursue a policy-limits settlement on the liability claims. On May 15, 2017, Plaintiff filed suit against Mr. Hill in the District Court of Tulsa County, alleging that Mr. Hill's negligence had caused the wreck and her injuries.[16] Despite GEICO's prior admission of Hill's liability for purposes of the claim, [17] the attorneys hired by GEICO to defend Mr. Hill filed an answer denying that Mr. Hill was negligent and alleging the affirmative defense of contributory negligence against Plaintiff.[18] On May 18, 2018, GEICO offered to settle the lawsuit against Mr. Hill for policy limits of $100, 000 contingent upon waiver of UIM's subrogation rights.[19]

         Plaintiff's new counsel also requested a second review of the UIM claim by the newly assigned adjuster, Kat Herron. On May 16, 2017, Ms. Herron conducted a review of the UIM claim. The document generated as a result of Ms. Herron's evaluation reflects that Plaintiff's total medical expenses were valued at $50, 649.13, that her past and future pain and suffering were valued at $50, 649.13, and that the settlement range was estimated between $77, 649.13 and $95, 649.13.[20] Currently, the record is void of any follow-up communication that Ms. Herron had with Plaintiff or her attorneys. In February 2018, Plaintiff's UIM claim was reassigned to a new adjuster, Amy Grieco. Following receipt of the settlement offer for Mr. Hill's policy limits on May 18, 2018, Plaintiff's counsel advised Ms. Grieco about the settlement, asked her either to waive UIM's subrogation rights to the $1000, 000 or to substitute payment, and demanded that she tender the UIM policy limits of $50, 000.[21] Upon evaluating the Plaintiff's UIM claim, Ms. Grieco generated a document reflecting that Plaintiff's total medical expenses were valued at $50, 649.13, that her past and future pain and suffering were valued between $25, 000 and $40, 000, and that the settlement range was therefore estimated between $76, 649.13 and $93, 149.13.[22] Although GEICO's brief states that Ms. “Grieco noted in her file that she would send a letter to Plaintiff's counsel and waive subro, ”[23] the record is currently void of any evidence in support of this contention.

         On June 26, 2018, Plaintiff filed suit against GEICO in the District Court of Oklahoma County, alleging that GEICO had breached the terms of the UM/UIM policy and had violated its duty to deal fairly and in good faith with its insured by failing to pay any benefits.[24] That same day, Ms. Grieco's claim notes reflect that she “[d]iscussed [the] file with adv[iso]rs - they had the claim eval[uate]d around [$]86k and after the depos, they made a business decision to tender their limits.”[25] In an affidavit submitted with GEICO's brief, Ms. Grieco identifies Teresa Euziere, GEICO's adjuster who handled Plaintiff's claim against Mr. Hill's liability policy, as an advisor whom she consulted on June 26th.[26] On July 16, 2018, GEICO removed the suit.[27] Plaintiff has alleged the following acts that she believes constitute bad faith on the part of GEICO: (1) GEICO attempted to settle Plaintiff's liability claim for a “low ball” amount to avoid making a payment on Plaintiff's UIM claim; (2) GEICO failed to conduct a reasonable investigation and evaluation of Plaintiff's UIM claim; and (3) GEICO has failed to pay any UIM benefits to Plaintiff, even after she received a policy-limits settlement from the tortfeasor.[28]


         GEICO has filed a Motion for Partial Summary Judgment, arguing that the undisputed facts establish that GEICO acted reasonably during its investigation and evaluation of Plaintiff's UIM claim, [29] that a legitimate dispute exists as to the value of Plaintiff's injury claim, [30] and that “GEICO did not owe a duty of good faith to Plaintiff under Hill's liability policy; Geico [sic] only owed a duty of good faith to its insured, Hill, in connection with Plaintiff's liability claim against Hill.”[31] In light of these arguments, GEICO asks the Court to enter judgment as a matter of law in its favor on Plaintiff's bad faith claim.

         The Court will address GEICO's last contention first. This argument appears to present a purely legal question, of the type that would typically be addressed through a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted. The issue is whether Plaintiff's bad faith claim may be based, at least in part, upon GEICO's handling of Plaintiff's liability claim.

         Ordinarily, Plaintiff could not assert a claim of bad faith against someone else's automobile liability insurer because there would be no contractual relationship between Plaintiff and the liability insurer, and thus no basis for finding a duty to deal fairly and act in good faith.[32]But here both Plaintiff's UIM insurer and the tortfeasor's insurer are the same company; so the question is whether that alters the general rule.

         As GEICO points out, this issue has come before the Oklahoma Supreme Court once before. In the case of Garnett v. Government Employees Insurance Co., 2008 OK 43, 186 P.3d 935, that court stated:

         As part of his bad faith claim, the passenger also alleges that the insurer engaged in “dual representation”-that the insurer's employee working the UIM claim and the insurer's employee working the liability claim conferred and colluded, thus preventing either from reaching a fair estimate of the value of the passenger's claims. The insurer responds that there was no showing that the adjusters acted in bad faith.

         The duty of an insurer who insures both parties in an accident has rarely been specifically addressed in federal or state jurisprudence, and is an issue of first impression in this Court. We have consistently held that in order to establish a bad faith claim, a party must show that the insurer engaged in unreasonable, bad faith conduct. This principle may be seen underlying examples of bad faith conduct by insurers who insure both parties to an accident found in other decision of other courts. These include: 1) using delay in settling one claim to force unfair settlement of the other; 2) making knowing misrepresentations to force an insured to accept an unfair settlement; 3) failing to disclose the nature of its relationship to each party; 4) using conflicting defenses against each party; and 5) using a single adjustor for both claims, who makes fraudulent misrepresentations to both parties.[33]

         The state court thus didn't rule out the possibility of bad faith altogether, but rather found in that particular case that the plaintiff “ha[d] shown nothing more than the potential for a conflict of interest created by the coincidence that the insurer happened to insure both” the tortfeasor and the plaintiff.[34] Even after noting that the plaintiff “ma[de] much of the fact that the examiners communicated, ” the court found such evidence unconvincing because “the major reason for any communication between the examiners was that the [plaintiff] often submitted claim information to the wrong examiner or under the wrong claim number.”[35]

         Thus, it appears that the liability adjuster's actions may, as a matter of state law, have some bearing on the issue of bad faith. Consequently, the Court cannot say that Plaintiff has failed to state a claim insofar as she alleges that GEICO acted in bad faith when it attempted to settle her liability claim for a “low ball” amount to avoid making a payment on her UIM claim.

         But GEICO also argues that Plaintiff has made no showing that GEICO's liability and UM adjusters acted in bad faith. GEICO invokes the examples of “dual representation” discussed by the Garnett court and argues that “GEICO did not use ‘dual representation' to force Plaintiff to accept an unfair settlement.”[36] At this juncture, however, this case appears to be distinguishable from the Garnett case. In Garnett, the court was dismissive of the plaintiff's contention that the liability and UM adjusters had communicated with each other because the plaintiff's actions had forced them to do so. Here, the limited record before the Court shows that the two adjusters first conversed on September 4, 2015, [37] that the two adjusters utilized a “share letter” to share materials between the two claims, [38] and that the UIM adjuster was consulting the liability adjuster as an advisor for purposes of deciding whether to continue to withhold payment of UIM benefits after Plaintiff filed this lawsuit in state court.[39] This evidence may give rise to different inferences regarding the reasonableness of GEICO's conduct; for instance, one juror might look at this evidence and find that the communication taking place in each instance was reasonable, while another juror might find that these communications demonstrate a conflict of interest-or even collusion-that explains why GEICO initially attempted to settle the liability claim at $74, 424.13 despite an evaluation at $86, 000 and an eventual settlement at policy ...

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