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

Oklahoma has a statute of repose for "improvements to real property".  If you are hurt by an improvement to real property more than 10 years after it is substantially completed, you may not sue.  See, 12 Okla.Stat. § 109.  In Goad v. Buschman, the 10th Circuit affirmed the trial court's grant of summary judgment to the owner of a building which had a conveyer belt system.  The building was used for grocery warehouse operations.  The court found that the factors favored finding that the conveyor system was part of the property and therefore fell within the ambit of the statute of repose.

The evidence presented to the district court shows that in 1985, Buschman contracted for the design, construction, and installation of the conveyor system. Buschman designed and installed the system. It was constructed from several conveyor “standards” that were installed to fit within the building’s existing footprint. The system is hardwired into the building, is three stories high, and originally contained about 6,155 feet of conveyor. It is attached to the floor by anchors set in concrete and bolts, and further attached to the building by a variety of bolts, angle bracing, stabilizing legs, floor-support columns, and ceiling hangers. The conveyor system is not welded to the building or embedded in the floor. The purchase price of the system was approximately $776,852.

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We were recently asked whether a workers compensation carrier could be liable for bad faith for denying a claim.  The quick answer appears to be no, there is only bad faith in workers comp where the insurance company fails to pay an award.

This appears to be a contentious issue with the Oklahoma Supreme Court.  In the latest pronouncement, Sizemore v. Continental, the court said that it recognizes a tort for bad faith when a workers compensation carrier refuses to pay a workers compensation award.  The decision was 5/4 with one concurring and two dissenting opinions.  The reason for the multiplicity of opinions is that the court's decision in Sizemore reversed recent opinions in DeAnda and Kuykendall which held that the sole remedy for failure to pay an award was interest on the payment as set forth in the workers comp statutes.

In Whitson, the court said that a workers comp insurer could not be liable for bad faith for a vigorous defense of a claim.  But in the seminal Oklahoma bad faith case, Christian, the insurance company had no defense but went to trial anyway, allowed the insured to present his case and then rested without presenting any evidence. 

So perhaps the next chapter of this saga will provide some sort of guidance on a bad faith defense without just cause, (bad faith) vs providing a strong defense -- or litigation tactics (not bad faith). 

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We previously reported about former General Re Corp. chief executive officer Ronald E. Ferguson being sentenced to two years for his role in a fraudulent scheme to inflate AIG's loss reserves which caused investors to lose over $500 million dollars.  Now another General Re Corp executive, Christopher Garand, has been sentenced to one year in prison and fined $200,000 for the same scheme. Garand is a former Gen Re senior vice president.  

In addition, former American International Group vice president Christian M. Milton, has been sentenced to four years in prison and fined $200,000 for his participation in the  fraudulent scheme which involved General Re Corp. and American International Group Inc. (AIG).  Other convicted former Gen Re executives are Robert D. Graham and Elizabeth A. Monrad.

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