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

In Guideone v. Shore, Guideone (Insurer) wanted Shore (Agent) to pay for all or part of a bad faith settlement it made with its insured.  Apparently Agent had told the insured that her UM coverage did not kick in until after the liability carrier paid its limits.  This is wrong under Oklahoma law.  But, when the insured repeated this information to the Insurer, the Insurer did not correct the error.  In addition, the Insurer did not timely investigate the claim.  As a result, the Insurer was sued for UM and for Bad Faith.  The Insurer settled with the Insured, and then went after the Agent for the money it paid in extracontractual damages.  Summary judgment to the Agent was affirmed.

There was no express indemnity in the Agency contract, so summary judgment was appropriate on that theory.  There was no right to implied indemnity because the Insurer was at fault for the Insured's claims.  There was no right to contribution under the contribution among joint torfeasors statute (12 O.S. § 832) because as an agent, Agency could not be liable to the insured for bad faith. 

• Email This
• Print
• Comments
• Trackbacks

In Breen v. Gardner, the Oklahoma Court of Civil Appeals affirmed the denial of a motion for mistrial after the investigating officer testified that he checked drivers licenses and insurance at the scene of a car wreck.  The court reasoned that since Oklahoma law requires compulsory insurance, the jury would not be surprised that the officer checked insurance at the scene.  Further, there was no evidence as to whether any party had insurance.  Thus, the mere mention of insurance by the officer did not warrant a mistrial.  

In addition, the defendant claimed that the jury was unduly influenced by the word insurance because it awarded $170,000 based on $3,300 in medical bills.  But, because the record was insufficient to support this argument, this claim did not warrant a new trial, either. 

• Email This
• Print
• Comments
• Trackbacks

In Hartford Underwriters Insurance Company v. Donna Ledbetter, the Missouri Court of Appeals considered whether an insurance policy’s language was ambiguous thus warranting coverage in favor of the insured.  Ledbetter received injuries in a car wreck  when another car driven by Danny Harris struck her car.   Ledbetter sued Harris for her personal injuries and later settled the suit in exchange for his liability insurance policy limit of $50,000.   Ledbetter then attempted to recover $200,000.00  against her insurer, Hartford, under the Underinsured Motorist provision of the Policy. Hartford denied that Harris’ vehicle was underinsured.  Both parties filed a Motion for Summary Judgment and the trial court entered judgment in favor of Hartford finding that Harris’ vehicle failed to meet the Policy’s definition of an underinsured vehicle.  Ledbetter appealed. 

 The appellate court’s review focused on the Policy’s “Other Insurance” clause pertaining to underinsured motorist coverage. The applicable provision stated, “Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing such coverage on a primary basis.”  Ledbetter argued the provision was ambiguous and required a construction that the underinsured motorist coverage was excess to the tortfeasor liability coverage regardless of whether she occupied the non-owned vehicle because a requirement that she actually occupy the non-owned vehicle was not contained in the policy.

 “Language in an insurance policy is ambiguous if it is reasonably open to different constructions, and the language used will be viewed in the light of the meaning that would ordinarily be understood by a layman who bought and paid for the policy.”  Hobbs v. Farm Bureau Town & Casualty Ins. Co., 965 S.W.2d 194, 197-98 (Mo. App. 1998).

 The Court considered Goza v. Hartford Underwriters Ins. Co., 972 S.W.2d 371, 372 (Mo. App. 1998) where Hartford’s  “Other Insurance” clause, which mirrors the “Other Insurance” clause in question, was found ambiguous and resolved in favor of the insured despite the fact that Goza was driving her own insured vehicle at the time of the accident.  The Goza  Court found the policy ambiguous because one could reasonably interpret the ‘excess coverage’ language as providing coverage for a vehicle that the insured did not own, while the ‘excess coverage’ language could also be interpreted as providing underinsured coverage in excess to amounts recovered from tortfeasor. 

This Court held that an objective examination of the ‘excess’ language of the “Other Insurance” clause suggests that the language might reasonably be interpreted by an average lay person to mean underinsured coverage was excess to amounts recovered from the tortfeasor.  It also could be interpreted to mean that the ‘excess’ language prevailed over the conflicting language contained in the Policy’s definition of an underinsured and Limits of Liability sections. 

 The trial court’s grant of summary judgment was reversed and remanded.

• Email This
• Print
• Comments
• Trackbacks

In Lombardi v. American Guarantee, the plaintiff lawyers fell for an email scam where it was contacted to deposit a check  and then remit it to other parties less their fees.  After the check cleared, it was determined to be a counterfeit and the plaintiff lawyers were required to make it good to the bank.  The lawyer's insurer did not participate in the settlement of the claims between the insureds lawyers and the bank, claiming there was no coverage.

The insurance policy issued by defendant provided coverage for any claim "based on an act or omission in [plaintiff's] rendering or failing to render Legal Services for others." "Legal Services" is defined by the policy as "those services performed by an Insured as a licensed lawyer in good standing . . . or in any other fiduciary capacity but only where the act or omission was in the rendition of services ordinarily performed as a lawyer." The terms of this policy encompass more than what would traditionally be considered "legal malpractice" (see United States Fid. & Guar. Co. v U.S. Underwriters Ins. Co., 194 AD2d at 1029).

  The court found that when dealing with the Bank, the lawyers were performing legal services as defined by the policy.  The policy did not require that the lawyers perform services for a client (who in this case was an impostor); only that the lawyer perform legal services for others.  Holding money for others and paying it on demand is part of legal services that attorneys provide routinely.   

The only remaining element under the policy's coverage definition is whether the claim was "based on" plaintiff's actions in rendering legal services to others.  The phrases "based on" and "arising out of" are practically synonymous in the insurance coverage context (see Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347, 352 [1996]). The latter phrase "requires only that there be some causal relationship between the injury and the risk for which coverage is provided" (Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 472 [2005]).  Of course, since the court used such a broad definition, this element was found to be met.

The contractual liability exclusion did not apply, and the insurer had a duty to defend.  The case was remanded to determine if there was also a duty to indemnify.

• Email This
• Print
• Comments
• Trackbacks

In Mendota v. Ware, Appellant (Ware) obtained a wrongful death judgment of $175,000 in damages against the driver of the car involved in a car accident of which her father was a passenger. Ware sought satisfaction of the entire judgment from respondent’s insurance carrier, Mendota. Ware argued that the Policy contained a typo that described property damage as “Coverage A” when it should have been designated as “Coverage B” thereby rendering the Policy ambiguous with no effective limits of liability. Mendota refused to pay more than the specified $25,000 policy limit for bodily injury claims and filed a declaratory judgment asking the circuit court to determine that the Policy was unambiguous and that the policy limit for bodily injury was $25,000. Both parties filed motions for summary judgment and the circuit court granted Mendota’s motion. Ware appealed. Relying on a single-character typo on the Policy’s Declaration page, Ware contends that the policy should be interpreted in her favor and impose no monetary limit on liability of coverage. The Court of Appeals relied on a recent Missouri Supreme Court definition of ambiguity as a “duplicity, indistinctness, or uncertainty in the meaning of the language of the policy. Language is ambiguous if it is reasonably open to different constructions.” Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010). The court noted that despite the “blatant” typographical error on the Policy’s Declaration page, the Policy can neither be construed to impose no monetary limit, nor can it be construed to impose a limit other than the policy’s specified $25,000 limit. The Court also found the Policy to contain straight forward terms on how the limits of liability would operate. The Court took its decision a step further and noted that even if the Policy were deemed ambiguous, Ware would only be entitled to a resolve the ambiguity consistent with a reasonable expectation as to what coverage would be provided. Ware’s argument of unlimited liability is contrary to the reasonable expectation as to what coverage would be provided and goes beyond what any fair interpretation will allow.

• Email This
• Print
• Comments
• Trackbacks