The Oklahoma Supreme Court has ruled that private citizens may sue for unsolicited faxes. In MLC Mortgage Corporation, the plaintiff had received various unsolicited faxes from the defendants. In an issue of first impression in Oklahoma, the court held that private parties may pursue violations of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. §227 (2005), in Oklahoma courts.
When an Oklahoma resident is injured in Oklahoma by an uninsured motorist, you might expect Oklahoma law to apply. But not if the UM policy was issued or delivered in another state on a vehicle registered or principally garaged in another state. In Bernal v. Charter County Mutual Insurance Co., the Oklahoma Supreme Court said that Oklahoma's UM statute only applies to vehicles registered in or principally garaged in Oklahoma. Thus, even though the accident occurred in Oklahoma, and the insured was from Oklahoma, Texas law would apply because that was where the vehicle was registered. Since Oklahoma law does not apply, there was no need to do a choice of law analysis -- and really, who wants to do that?
The court says that Oklahoma's statute applies solely to cars registered or garaged in Oklahoma. It then concludes that this a legislative mandate to use the law of the state of the policy or where the car is garaged and/or registered.
There is no discussion as to whether there is any choice of law provision in the policy, and whether that would make any difference. Certainly, under Oklahoma (and most other states laws), the parties may choose to be governed by a specific state's laws. Whether and to what extent this may affect other types of insurance is not yet known.
In Sizemore v. Continental Cas. Co, the Oklahoma Supreme Court said that if a workers compensation insurer refused to pay benefits when due, the employee could get a certification from the workers comp court about the amount of benefits due. From there, the employee could either (1) file a certified copy of the certification order, with the award attached, in the district court as a judgment and proceed to execution pursuant to section 42(A) or (2) the claimant may file a claim in tort for the insurer's bad faith -- in which case, the amount of unpaid benefits would be part of the damages.
But what about the employee who was ordered to receive treatment, which the insurance company did not provide? That is the situation in SUMMERS v. ZURICH AMERICAN INSUR. CO.,just decided by the Oklahoma Supreme Court. Since there is no monetary award to garnish, the court decides that the only recourse for a worker in that situation is to proceed directly with a bad faith action.
A claimant who has obtained an order certifying that non-monetary benefits have not been provided as ordered does not have the option of enforcing the award as a judgment in the district court. See Okla. Stat. tit. 85, § 42(A). That claimant's remedy is to proceed with a tort claim for bad faith in district court.
The "bad faith conduct by a workers' compensation insurer in refusing to pay an award of benefits to an injured worker is judged by the same standard as bad faith conduct by any other insurer." Id. citing Badillo v. Mid Century Ins. Co., 2005 OK 48, ¶ 28, 121 P.3d 1080, 1094 ("the minimum level of culpability necessary for liability against an insurer to attach is more than simple negligence, but less than the reckless conduct necessary to sanction a punitive damage award against said insurer").
It should be noted, however, that the workers comp insurer is only liable for bad faith after notice and a hearing in the workers comp court. In Summers the court found that there were fact issues precluding dismissal.
The Oklahoma legislature has not embraced arbitration. In fact, it seems somewhat hostile towards it. Thus, there has been some tinkering with Oklahoma’s arbitration act by the legislature. First, it said that the only types of insurance agreements that could be arbitrated were those between insurers, which would, of course, include reinsurance agreements. But then the statute changed to delete the exception which permitted arbitration between insurance companies. Then, it changed again to permit it. It was during these changes that Mid-Continent sued GenRe for failure to pay under the reinsurance contracts.
The trial court said that the arbitration clause was unenforceable, and that therefore, the suit could proceed. GenRe appealed, claiming that the arbitration clause was enforceable. It was after the trial court’s ruling and before the Tenth Circuit’s ruling that the law changed again to permit arbitration between insurance companies. The Tenth Circuit found the arbitration clause was enforceable, and that the change applied retroactively, since it was a procedural and not a substantive change.
Read the opinion:
Mid-Continent Casualty Co. v. General Reinsurance Corporation, Case No. 07-5050
Our friends at Reed McClure in Seattle have published their latest insurance law newsletter. The cases discussed include issues such as parental immunity, what type of business is covered under a business coverage clause, and a case which held that certified mail is not mail. For these and other reasons, you should check out the latest Washington Insurance Law Letter.
Union Standard Ins. Co. v. Hobbs Rental
In this declaratory judgment action, the 10th Circuit reversed the district court’s finding of coverage. The insured, Hobbs, rents oil field drilling equipment. It hired Brunson to move a piece of equipment from the oil field to the rental yard. While unloading the equipment in Hobbs’ yard, the truck touched an electrical line and Brunson’s employee was injured. The employee sued Hobbs, and Hobbs put its CGL carrier on notice of the claim. The CGL carrier began defending, but then declared bankruptcy, so Hobbs notified its business auto liability carrier (Union Standard) of the claim, who defended under a reservation of rights.
The Union Standard policy covered certain non-owned vehicles "used in connection with" the insured’s business. The issue was whether the Brunson truck was covered. The court used the policy language to determine context; and found that the non-owned autos provision covered ""autos" owned by [Hobbs] employees or partners or members of their households but only while used in [Hobbs] business or [Hobbs] personal affairs." By using this context analysis, the Tenth Circuit found that instead of covering all autos somehow related to Hobbs’ business, the policy was only intended to apply to Hobbs’ affiliated persons using privately owned vehicles on company business.
Finding coverage was also in conflict with New Mexico’s "reasonable insured" standard, as well as the common purpose of such provisions.
The court was concerned with the expansive interpretation of the clause by the district court, which it believed would expand coverage to any vehicle which had a business connection to the insured. Rather, the coverage was only as to those vehicles over whom the insured might be considered to have respondeat superior liability.
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