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. 

 

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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.

 

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Beginning November 1, 2007, insurance companies must check with the Oklahoma Department of Human Services before paying any claim of $500.00 or more.  If the claimant owes child support, any amounts owed must be subtracted from any amounts paid to the claimant.  The child support lien is inferior to any lien or claim for 1.  Services and expenses documented and related to the claim, such as attorney fees or health care expenses;  2. Damage to or a loss of real property; or 3. Damage to or a loss of a motor vehicle to the extent that it would be exempt from claims of general creditors pursuant to Section 1 of Title 31 of the Oklahoma Statutes.

Failure to clear the payment with the State of Oklahoma can result in both fines and imprisonment.  The statute is 56 O.S. § 237B

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