Reinsurance Law Blog : Oklahoma Insurance Lawyer & Attorney : Stauffer & Nathan Law Firm

Wife takes 5th during deposition, cannot recover on life insurance policy

Angelina and Bryan were married; several years later, Bryan took out a $1M life insurance policy naming Angelina as primary beneficiary, and his kids as secondary beneficiaries.  Three months later, Bryan was killed; and Torre was convicted of the murder.  There was evidence that Torre and Angelina were lovers and had been heard talking about killing Bryan for the insurance.

The insurance company filed a declaratory judgment action so the court could determine who should get the proceeds.  Angelina refused to testify at Torre’s trial and refused to answer questions in her deposition on Fifth Amendment (self incrimination) grounds.  The trial court ruled that Angelina was involved in her husband’s murder and could not benefit from the insurance, and awarded the proceeds to the children.  The Ninth Circuit affirmed.

The Ninth Circuit said that it was ok to preclude Angelina from testifying at trial, since she had taken the Fifth at deposition.  It would be unfair to allow Angelina to invoke the privilege during discovery and then disclose the information during trial.  Further, the trial court acted within its discretion to draw an adverse inference from Angelina’s assertion of the Fifth, because there was independent evidence about the facts to which she refused to testify, and there was a substantial need for the testimony.  Finally, it was proper to admit deposition testimony of a witness who said he was approached by Angelina and Torre to kill Bryan.  The witness was out of state and therefore, unavailable.  Testimony about what Torre told the witness were also admissible as a statement of a co-conspirator. 

Nationwide Life Ins. Co. v. Richards, 541 F.3d 903 (9th Cir., 2008)

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Commercial seller requirement in products liability claims

Oklahoma’s products liability law is based on Restatement of Torts (Second) §402A.  One of the requirements is that the seller be engaged in the business of selling such a product.  Liability is not imposed upon occasional sellers who where the sale is not part of a business.  Thus, in order to impose §402A liability, the defendant must be a "seller . . . engaged in the business of selling" the allegedly dangerous product.  In Spence v. Brown-Minneapolis Tank, Co., 2008 OK CIV APP 90, the court stated that if defendant is not a commercial "seller engaged in the business of selling" the allegedly dangerous product, summary judgment is proper.  In this case, intra-company transfer of goods was not a sale, and the defendant was not in the business of selling the doohickies that caused the injury.  Thus, summary judgment was proper. 
 

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Vacant not a question of fact

Bob owned a restaurant.  Bob closed the restaurant.  But Bob kept his office in the restaurant open.  The sprinklers malfunctioned and the restaurant was water damaged.  Bob’s insurance claim was denied.  The policy did not cover losses on vacant premises or from freezing pipes. Then it was determined that the sprinklers had been deliberately tampered with and the tampering caused the damages.  The claim was denied again.  The trial court said the building was vacant and tha tthe vandalism and water damage exclusions precluded coverage. Summary judgment to the insurance company was affirmed on appeal.

There was no dispute that the building was vacant on the date of the loss because it was not being used for customary operations on the date of the loss.  Using a small part of the building did not make the building occupied.  Further, it did not matter that there was no evidence that Bob tampered with the sprinklers.  The vandalism exclusion applied.  There was no bad faith in the investigation of the claim.

Saiz v. Charter Oak Fire Insurance Company;
http://ca10.washburnlaw.edu/cases/2008/11/07-1449.pdf

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If it looks like an insurance policy and quacks like an insurance policy, its an insurance policy -- according to the Oklahoma Court of Civil Appeals.  And if it meets the requirements of an insurance policy, statements in the contract that says its not insurance are going to be ignored.  Further, breach of the contract can give rise to a bad faith action.  Thus, calling a contract a debt release waiver will not insulate the parties from a bad faith claim.

EMBRY v. INNOVATIVE AFTERMARKET SYSTEMS , 2008 OK CIV APP 92 , ___ P.3d ___ (OSCN 2008)

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