Oklahoma Automobile Oklahoma Automobile Insurance LawInsurance Law

By Jon StarrBy Jon Starr

Why do people need automobile Why do people need automobile insurance anyway?insurance anyway?

Automobile InsuranceAutomobile Insurance

First Question should always be:First Question should always be:

Is this a “first party” or “third party” Is this a “first party” or “third party” claim?claim?

““First Party” is claim against insured First Party” is claim against insured own policy for benefits.own policy for benefits.

““Third Party” is claim against someone Third Party” is claim against someone else who had insurance to cover claim.else who had insurance to cover claim.

Oklahoma Automobile Insurance Oklahoma Automobile Insurance LawLaw

First Party CoveragesFirst Party Coverages

** Uninsured/Underinsured Uninsured/Underinsured motoristsmotorists

** Medical PaymentsMedical Payments

** CollisionCollision

** Comprehensive Comprehensive

** RentalRental

Uninsured Motorist CoverageUninsured Motorist Coverage

UninsuredUninsured No insuranceNo insurance Insolvent liability carrierInsolvent liability carrier ““hit and run”hit and run”

UnderinsuredUnderinsured Insufficient Liability LimitsInsufficient Liability Limits

Offering of UM CoverageOffering of UM Coverage

At purchase of policy, UM coverage must be offered in amount equal to liability limits to all vehicles registered or potentially garaged in Oklahoma.

Offering of UM CoverageOffering of UM Coverage

Written rejection of UM coverage is required and must be signed by a named insured if:

1. UM is being rejected, or 2. limits lower than the liability limits

are being purchased.

New Election No Longer Required New Election No Longer Required For Changes Under Existing PolicyFor Changes Under Existing Policy

Effective November 1, 2009Effective November 1, 2009, the , the statute has been amended, so that once statute has been amended, so that once an election to not purchase UM an election to not purchase UM coverage or to purchase UM coverage in coverage or to purchase UM coverage in an amount less than the liability limits is an amount less than the liability limits is made, made, there is no requirement to there is no requirement to get an another election form filled get an another election form filled out if coverage under that policy is out if coverage under that policy is changed.changed.

Legal Standard for UMLegal Standard for UM

UM coverage is applicable when insured is “legally entitled to recover” from “owner or operator of an uninsured or underinsured motor vehicle.”

UM in “hit and run” claimUM in “hit and run” claim

Physical contact “not required” on “hit and run” cases in Oklahoma. Biggs v. State Farm Mutual Automobile Insurance Co., 569 P.2d 430 (Okla. 1979).

UM in “hit and run” claimUM in “hit and run” claim

UM coverage is triggered in a “hit and run” situation even where the owner has been identified if the identity of the driver of the vehicle at the time of the accident remains unknown. Brown v. United States Automobile Association, 684 P.2d 1195 (Okla. 1984).

Stacking of UM Policies AllowedStacking of UM Policies Allowed

Stacking of UM limits is allowed by “insured” if separate premium paid for UM coverage on multiple household policies. Keel v. MFA Insurance Co., 553 P.2d 153 (Okla. 1976).

Statute of Limitations on UM?Statute of Limitations on UM?

Statute of limitations on UM coverage is five (5) years from the date of the breach of the insurance contract. Willie v. GEICO Casualty Willie v. GEICO Casualty Co.,Co., 2000 OK 10, 2 P.3d 888. 2000 OK 10, 2 P.3d 888.

““3 out of 4” Binds UM Carrier3 out of 4” Binds UM Carrier

The Oklahoma Supreme Court recognized UM carrier bound by outcome of litigation in three our of four scenarios.

Keel v. MFA Insurance Co., 553 P.2d 153 (Okla. 1976).

Plaintiff v. Insurance Company

1) direct action may be brought against UM carrier without suing tortfeasor;.

Plaintiff v. Tortfeasor and Ins. Co.Plaintiff v. Tortfeasor and Ins. Co.

(2) action can be brought against tortfeasor and UM carrier in the same action;

Notice to Insurance Company of Notice to Insurance Company of lawsuit: Plaintiff v. tortfeasorlawsuit: Plaintiff v. tortfeasor

(3) litigation can be brought against tortfeasor and UM carrier can be put on notice of action, so that UM carrier can intervene in action if it wishes to participate in discovery and/or trial;

UM Carrier not bound if it is not UM Carrier not bound if it is not given notice of lawsuitgiven notice of lawsuit

(4) litigation filed against tortfeasor without notifying the UM carrier will not bind the UM carrier to outcome of litigation

UM Carrier’s DutiesUM Carrier’s Duties

Independent EvaluationIndependent Evaluation

Payment From Dollar OnePayment From Dollar One

All UM is primary to insuredAll UM is primary to insured

Independent EvaluationIndependent Evaluation

The UM carrier required to do independent investigation and evaluation of claim, and may not rely on the tortfeasor’s carrier’s investigation and evaluation. Buzzard v. Farmers Insurance Co., 824 P.2d 1105 (Okla. 1991).

Payment From Dollar OnePayment From Dollar One

Once evaluation of claim exceeds underlying tortfeasor’s limits, UM carrier must pay from dollar one of value of claim, and seek reimbursement from tortfeasor’s carrier under subrogation rights. Burch v. Allstate Insurance Co., 977 P.2d 1057 (Okla. 1998), and Gates v. Eller, 22 P.2d 1215.

All UM is primary to insuredAll UM is primary to insured

There is no such thing as “excess” UM in Oklahoma, all UM is primary. Burch.

All UM is primary to insuredAll UM is primary to insured

Multiple UM carriers on a claim must make payment to insured once evaluation exceeds underlying liability limits, and then pursue reimbursement from other UM carrier later. Burch.

Subrogation Has 2 Year Subrogation Has 2 Year Statute of LimitationsStatute of Limitations

The UM carrier must pursue subrogation rights against the tortfeasor within two (2) year statute of limitations applicable on negligence actions in Oklahoma regardless of five (5) year statute of limitations for claimant to pursue UM benefits.

Effect of Tortfeasor’s Statute of Effect of Tortfeasor’s Statute of Limitations RunningLimitations Running

Allowing the two (2) year statute of limitations to run against the tortfeasor does not prohibit collection of UM funds. Burch.

Allowing the two (2) year statute of limitations to run against the tortfeasor does not change potential underinsured into uninsured case. Burch.

If Underinsured, UM Still Pays Dollar If Underinsured, UM Still Pays Dollar One If Claim Against Tortfeasor One If Claim Against Tortfeasor Barred By Statute of LimitationsBarred By Statute of Limitations

There is no set-off by liability limits to reduce total UM coverage available if value of claim exceeds tortfeasor’s liability limits and statute of limitations was allowed to passively run against the tortfeasor. Burch.

Do Not Count Umbrella Policy In Do Not Count Umbrella Policy In Determining If Tortfeasor Is Determining If Tortfeasor Is

UnderinsuredUnderinsured

Umbrella policy does not count when examining underlying coverage to determine if the tortfeasor is “underinsured insured.” Geico General Insurance Co. v. Northwestern Pacific Indemnity Co., 2005 OK 40.

Medical Liens and UMMedical Liens and UM

Hospital LiensHospital Liens

Physicians' LiensPhysicians' Liens

Hospital LiensHospital Liens

UM proceeds, which the Court characterized UM proceeds, which the Court characterized as a as a contractual recoverycontractual recovery, were not subject , were not subject to the hospital lien allowed by § 43. to the hospital lien allowed by § 43. Kratz v. Kratz v. KratzKratz, , 1995 OK 631995 OK 63, , 905 P.2d 753905 P.2d 753

A hospital lien is governed by the provisions A hospital lien is governed by the provisions of of 42 O.S.2001 § 4342 O.S.2001 § 43..33 which has the which has the language language "claim against another for "claim against another for damages"damages" as the asset against which the as the asset against which the lien could be asserted.lien could be asserted.

Physicians' LiensPhysicians' Liens

Physicians’ liens are enforceable against UM benefits in Oklahoma. Robert v. OU Physicians, 2005 OK CIV APP 108, and Broadway Clinic v. Liberty Mutual Ins. Co., 2006 OK 29.

42 O.S. 2001 § 46(B) authorizes a lien when an injured patient asserts a "claim against an insurer,"

No Setoffs Against UMNo Setoffs Against UM

No set-off for medical payment coverage against UM in Oklahoma.

No set-off for worker’s compensation payments against UM coverage in Oklahoma.

Arbitration Of UM DisputesArbitration Of UM Disputes

Arbitration clauses are allowed in UM portions of policy in Oklahoma, but not required.

The insurance company cannot compel insured to arbitration of UM claim, even if policy says it can.

The insured should not refuse demand for arbitration by insured on UM claim.

Waive Sub or Substitute PayWaive Sub or Substitute Pay

Once the tortfeasor tenders policy limits, insured has a statutory procedure to require UM carrier to substitute payment of tortfeasor’s limits or waive subrogation rights within 60 days Okla. Stat. tit. 36 § 3636.

Trigger Of 60 Days WindowTrigger Of 60 Days Window

(1) sending certified letter;

(2) providing medical authorization; and

(3) providing employment authorizations

if wages or income are an issue.

““Excluded Driver” not valid against Excluded Driver” not valid against passengers on UM claimpassengers on UM claim

If the driver of a car is an excluded If the driver of a car is an excluded driver under the policy, it will not driver under the policy, it will not prevent the passengers from prevent the passengers from recovering UM benefits. recovering UM benefits. Alternative Alternative Medicine of Tulsa, Inc. v. CatesMedicine of Tulsa, Inc. v. Cates, 2006 , 2006 OK CIV APP 65.OK CIV APP 65.

GOVERNMENT EMPLOYEES INSURANCE CO. v. QUINEGOVERNMENT EMPLOYEES INSURANCE CO. v. QUINE2011 OK 882011 OK 88

The Supreme Court concluded under the facts of the case that an The Supreme Court concluded under the facts of the case that an insurer's refusal to unconditionally tender a partial payment of UIM insurer's refusal to unconditionally tender a partial payment of UIM benefits did not amount to a breach of the obligation to act in good benefits did not amount to a breach of the obligation to act in good faith and deal fairlyfaith and deal fairly when: when:

(1)(1) the insured's the insured's economic/special damages have been fully recovered economic/special damages have been fully recovered through payment from the tortfeasor's liability insurancethrough payment from the tortfeasor's liability insurance; ;

(2)(2) (2) after receiving notice that the tortfeasor's liability coverage has (2) after receiving notice that the tortfeasor's liability coverage has been exhausted due to multiple claims, been exhausted due to multiple claims, the UIM insurer promptly the UIM insurer promptly investigates and places a value on the claiminvestigates and places a value on the claim; ;

(3)(3) (3) there is a (3) there is a legitimate dispute regarding the amount of legitimate dispute regarding the amount of noneconomic/general damages noneconomic/general damages suffered by the insured; and suffered by the insured; and

(1)(1) (4) the (4) the benefits due and payable have not been firmly established benefits due and payable have not been firmly established by either an agreement of the parties or entry of a judgment by either an agreement of the parties or entry of a judgment substantiating the insured's damages.substantiating the insured's damages.

Medical Payment CoverageMedical Payment Coverage

Medical payment coverage covers only medical expenses, and does not provide coverage for loss of wages or other incidental damages to the insured’s personal injuries.

Medical Payment CoverageMedical Payment Coverage

There is no right of subrogation for medical payment coverage against the named insured of their household members. Okla. Stat. tit. 36 § 6092.

Can Sub “Guest Passenger” Can Sub “Guest Passenger” Med PayMed Pay

Subrogation against liability

coverage is allowed for med pay payments made to guest passengers, if allowed for in the policy. Okla. Stat. tit. 36 § 6092

Property Damage CoverageProperty Damage Coverage

Payments of damages under collision or comprehensive coverage is governed by the terms of the contract.

Settlement of 1Settlement of 1stst Party Total by Party Total by Replacing VehicleReplacing Vehicle

An insurer may elect to offer a replacement motor vehicle which is a specific comparable motor vehicle available to the insured, with all applicable taxes, license fees, and other fees incident to the transfer of evidence of ownership of the motor vehicle paid, at no cost to the insured other than any deductible provided in the policy. The offer and any rejection thereof shall be documented in the claim file;

FMV on 1FMV on 1stst Party Claims Party Claims

The fair market value of the vehicle under first party coverages can be determined as follows:

a. The cost of a comparable motor vehicle in a local market area when a comparable motor vehicle is available in the local market area,

b. One of two or more quotations obtained from an insured from two or more qualified dealers located within the local market area when a comparable motor vehicle is not available in the local market, or

c. A cost of comparable motor vehicle as quoted in the latest edition of the “National Automobile Dealer’s Association Official Used Car Guide.”

Not “CCC”

Deviations Must Be Documented Deviations Must Be Documented To The InsuredTo The Insured

On first party total loss settlements, any deviation from one of the above methods must be supported by documentation giving the particulars of the condition of the motor vehicle. Any deductions from such costs, shall be measurable, discernable, itemized, and specified as a dollar amount, and shall be an appropriate amount. The basis for such settlement must be fully explained to the first party claimant. 36 O.S. § 1250.8.

Insurable Interest in Vehicle in Oklahoma

Not Determined Exclusively by Title

Oklahoma statute requires an insurable interest in a vehicle

Statute defines “insurable interest” as “any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.”

36 O.S. § 3605.

Title does not necessary Title does not necessary for “ownership”for “ownership”

The Oklahoma Courts have repeatedly held that “paper title” is not a pre-requisite to “ownership” in Oklahoma of a vehicle, and that whether or not the insured had a certificate of title completed in their name is not determinative of the true state of “ownership.” Al’s Auto Sales v. Moskowitz, 224 P.2d 588 (Okla. 1950); Hardware Mutual Casualty Company v. Baker, 445 P.2d 800 (Okla. 1968).

Liability Insurance Issues

Minimum Liability LimitsMinimum Liability Limits

Oklahoma law requires Oklahoma drivers to carry minimum coverage for bodily injury of $25,000.00 per person, $50,000.00 per accident, and $25,000.00 for property damage. 47 O.S. § 7-324.

$25,000/$50,000/$25,000

All Insurance Discoverable In All Insurance Discoverable In LitigationLitigation

All insurance limits are discoverable once litigation is filed, but there is no requirement to disclose limits during pre-suit claim handling. 12 O.S. § 3226(B)(1).

Most Liability Exclusion Invalid Up Most Liability Exclusion Invalid Up to Minimum Limitsto Minimum Limits

The Financial Responsibility and Compulsory Insurance Laws in Oklahoma have resulted in the Oklahoma Supreme Court invalidating a number of exclusions in liability insurance coverages up to these minimum limits based on public policy reasons.

Public Policy = Public Policy = “Protection of Innocent Victim”“Protection of Innocent Victim”

Cases of this Court decided subsequent to the compulsory insurance law make clear that the legislative intent of the compulsory liability insurance statutes is that innocent victims of the negligent operation of motor vehicles should be compensated for their injuries.

The Supreme Court has upheld the public policy embodied by the compulsory liability insurance statutes by invalidating clauses in insurance policies that would have denied coverage to innocent third parties.

Mileage RadiusMileage Radius

In Equity Mutual Ins. Co. v. Spring Valley Wholesale Nursery, Inc., , , in answer to a question of law certified from a federal court, The Court held that it was a violation of public policy in Oklahoma for the insurer and insured to agree that liability insurance coverage of a commercial vehicle would not apply beyond a 200-mile radius. Such provision contravened the underlying statutory purpose of et. seq. and was void insofar as it limited the minimum coverage required by the statute.

Operator Age ExclusionOperator Age Exclusion

In Young v. Mid-Continent Cas. Co., the offending exclusionary clause in an automobile liability insurance policy excluded coverage for operation of the insured vehicle if operated by any person under the age of twenty-five years.

Household ExclusionHousehold Exclusion

In Nation v. State Farm Ins. Co., the Court invalidated, to the extent of the minimum coverage required by statute, an exclusion that omitted from coverage all resident members of a household.

Misrepresentation on ApplicationMisrepresentation on Application

In Harkrider v. Posey, the Court did not permit an insurance company to cancel a voidable insurance policy, as to an innocent third-party victim, where the insured had misrepresented on her application that there was no other resident in her home of fourteen years of age or older, when in fact Posey, the co-habitant/driver, had a revoked driver's license.

No Limited Permissive UseNo Limited Permissive Use

O'Neill v. Long, the Court held that once express or implied permission to use an insured vehicle is granted, the omnibus coverage is fixed, up to the statutory minimum, except for criminal theft. In that case, the insured loaned his car to his nephew and specifically instructed his nephew not to let anyone else drive the car

O'Neill v. Long

The nephew, who was given permission to drive car, but told he could not let anyone else drive car, let someone else drive the car and the non-permissive driver had a wreck in which the O'Neills were seriously injured.

O'Neill v. Long

State Farm's policy allowed the named insured or spouse to limit omnibus coverage by placing restrictions on the scope of the consent granted. It provided omnibus coverage to a permissive user who was liable for loss arising out of the use of the insured vehicle only if the use fell within the scope of the consent granted.

O'Neill v. Long

The Court held that the provision in State Farm's policy contravened the public policy embodied in our Compulsory Insurance Law, which evinces an unmistakable intent to maximize insurance coverage for the greater protection of the public.

O'Neill v. Long

The Court determined that Oklahoma's compulsory insurance law requires omnibus coverage, even though the permittee exceeds the scope of consent granted by the named insured.

O'Neill v. Long

Once express or implied permission to use an insured vehicle is granted, the omnibus coverage is fixed, barring criminal theft. Our ruling in this regard is limited to a claim for an amount up to our law's statutory mandate..

(25,000/$50,000/$25,000)(25,000/$50,000/$25,000)

TAPP v. PERCIFULTAPP v. PERCIFUL

Applying the automobile business Applying the automobile business exclusionary clause would prejudice exclusionary clause would prejudice an innocent third party and violate an innocent third party and violate the intent of the compulsory liability the intent of the compulsory liability insurance law that, to the minimum insurance law that, to the minimum amount of liability coverage required amount of liability coverage required by statute, the innocent plaintiff by statute, the innocent plaintiff should be entitled to recover. should be entitled to recover.

BALL v. WILSHIRE INS. COBALL v. WILSHIRE INS. CO.. 2009 OK 38 2009 OK 38

The Supreme Court held that a motor-The Supreme Court held that a motor-vehicle insurance policy provision that vehicle insurance policy provision that excludes any coverage for excludes any coverage for "Vehicles "Vehicles Loaned, Leased or Rented to others, Loaned, Leased or Rented to others, including those dealerships and repair including those dealerships and repair shops who provide [word or words omitted shops who provide [word or words omitted in policy] while customer's auto is being in policy] while customer's auto is being repairedrepaired" void in whole or in part, in light of " void in whole or in part, in light of Oklahoma's Compulsory Liability Insurance Oklahoma's Compulsory Liability Insurance statute, statute, 47 O.S. §7-60047 O.S. §7-600 to §7-612, but that to §7-612, but that specific policy exclusion nevertheless specific policy exclusion nevertheless relieve an insurance company of its relieve an insurance company of its contractual duty to defend an insured.contractual duty to defend an insured.

Specific Named Excluded DriverSpecific Named Excluded Driver

The very narrow exclusion that this Court has recognized is the exclusion of a specifically-named driver, which is recognized by our compulsory liability insurance law. Pierce v. Oklahoma Property & Cas. Ins. Co., ¶15, , 823.

Why?Why?

Two conflicting public policiesTwo conflicting public policies

1) Protection of innocent victims1) Protection of innocent victims

VersesVerses

2) Ability of afford coverage for other 2) Ability of afford coverage for other family family

membersmembers

ConclusionConclusion

Better to have some of the Better to have some of the drivers in the household drivers in the household insured by allowing them to insured by allowing them to exclude “bad driver” and be exclude “bad driver” and be able to afford insurance than able to afford insurance than making it where no one in the making it where no one in the house could afford insurance.house could afford insurance.

Specific Named Driver Exclusion QuestionedSpecific Named Driver Exclusion Questioned

BALL v. WILSHIRE INSURANCE CO., BALL v. WILSHIRE INSURANCE CO., 2009 OK 38, t2009 OK 38, the Court of Civil Appeals, he Court of Civil Appeals, Division 2, has recently questioned the Division 2, has recently questioned the continued validity of continued validity of PiercePierce. . SeeSee McElmurry McElmurry v. Garbow, v. Garbow, 2005 OK CIV APP 382005 OK CIV APP 38, ¶8, , ¶8, 116 P.3d 198116 P.3d 198, 201 (holding that policy , 201 (holding that policy provision naming policy holder as an provision naming policy holder as an excluded driver violates public policy and is excluded driver violates public policy and is invalid to the extent that it denies liability invalid to the extent that it denies liability coverage to innocent third parties). coverage to innocent third parties).

Named Excluded Driver Exclusion Named Excluded Driver Exclusion only valid if due to bad driving recordonly valid if due to bad driving record

The application of The application of Pierce v. Oklahoma Pierce v. Oklahoma Property & Casualty Ins. CoProperty & Casualty Ins. Co., ., 1995 OK 781995 OK 78, , 901 P.2d 819901 P.2d 819, is limited , is limited to those policies with named driver to those policies with named driver exclusion endorsements due to a poor exclusion endorsements due to a poor driving record as permitted in Section driving record as permitted in Section 7-324 of Title 47 of the Oklahoma 7-324 of Title 47 of the Oklahoma Statutes. Statutes. MULFORD v. NEALMULFORD v. NEAL2011 OK 202011 OK 20

Intentional ActIntentional Act

A panel of the Oklahoma Civil Court of A panel of the Oklahoma Civil Court of Appeals recently found no liability Appeals recently found no liability coverage for an admitted intentional act. coverage for an admitted intentional act. In In Equity Insurance Co. v. GarrettEquity Insurance Co. v. Garrett, the , the court found that the driver’s admission court found that the driver’s admission that she intentionally drove her vehicle that she intentionally drove her vehicle into another person – although she into another person – although she claimed she did not intend to injure – was claimed she did not intend to injure – was sufficient to preclude liability coverage sufficient to preclude liability coverage under a policy which covered injury for under a policy which covered injury for automobile accidents but excluded automobile accidents but excluded coverage for intentionally caused injuries. coverage for intentionally caused injuries.

Property Damage Claims under Property Damage Claims under Liability CoverageLiability Coverage

Commercial TotalsCommercial TotalsUnder Liability CoverageUnder Liability Coverage

Property damage settlements on third party liability claim on commercial total loss vehicle is the fair market value of the vehicle, less the salvage value, plus loss of use for reasonable time to replace the vehicle with a similar type.

FMV – salvage + (rental or loss of use) = Commercial Total

Non-Commercials Totals Non-Commercials Totals under Liability Coverageunder Liability Coverage

Third party liability settlements of property damage on total non-commercial vehicles is the fair market value of the vehicle, less the salvage value. OUJI 4.12.

FMV – Salvage = Non-Commercial Total

Why?Why?

Non-commercial vehicles are easily Non-commercial vehicles are easily replaced because there are replaced because there are numerous vehicles available of the numerous vehicles available of the same or similar type.same or similar type.

Some commercial vehicles are Some commercial vehicles are unique and can not be replaced in a unique and can not be replaced in a day or two.day or two.

Repairable PDRepairable PD

Property damage calculation for repairable vehicles is the cost of repair, plus loss of use, plus any depreciation to the value of the vehicle due to the damage and repair. OUJI 4.14.

DepreciationDepreciation

Not on 1Not on 1stst party collision or party collision or comprehensive unless contract comprehensive unless contract provides for it.provides for it.

Burden on 3Burden on 3rdrd party claimant just as party claimant just as with any other damage to submit with any other damage to submit evidence, i.e. affidavit of car evidence, i.e. affidavit of car salesperson or apprasiersalesperson or apprasier

General Insurance ConceptsGeneral Insurance Concepts

“ARISING OUT OF THE:

• OPERATION,

• OWNERSHIP,

• MAINTENANCE, or

• USE OF A VEHICLE”

“ARISING OUT OF THE OPERATION, OWNERSHIP, MAINTENANCE, OR USE OF A VEHICLE”

A bus driver opening the door of the bus to allow a child to get out of the bus and then crossing the traffic where she was injured, was held to qualify as “arising out of” in Earl W. Baker & Co. v. Lagaly, 144 F.2d 344 (10th Cir. 1944).

“ARISING OUT OF THE OPERATION, OWNERSHIP, MAINTENANCE, OR USE OF A VEHICLE”

A truck driver negligently pumping gasoline from a tanker into a diesel motor grader held to be “incident to and out of the use of the truck.” Penley v. Gulf Insurance Co., 414 P.2d 305 (Okla. 1966).

“ARISING OUT OF THE OPERATION, OWNERSHIP, MAINTENANCE, OR USE OF A VEHICLE”

Claimant instructed to climb up on combine loaded on truck to dislodge breather pipe who fell and was injured, was held to be “a result of - - - use of the truck” in Oklahoma Farm Bureau Mut. Ins. Co. v. Mouse, 268 P.2d 886 (Okla. 1954).

Duty To Defend: Allegations

In Oklahoma, generally the duty to defend is based upon the allegations in the pleadings of the adversary to the insured. Maryland Cas. Co. v. Willsey, 380 P.2d 254 (Okla. 1963).

Duty To Defend Is Independent of Duty To Defend Is Independent of Duty To IndemnifyDuty To Indemnify

Sometimes the duty to defend will arise even though the duty to indemnify may not be triggered. Conner v. Transamerica Insurance Co., 496 P.2d 770 (Okla. 1972).

Duty To Defend: FactsDuty To Defend: Facts

If the allegations in the pleadings do not trigger coverage, but actual facts known to the insurance company, do the duty to defend will also arise. American Motor Ins. Co. v. Southwestern Grayhound L., 283 F.2d 648 (10th Cir. 1960).

Duty To SettleDuty To Settle

The Oklahoma Supreme Court has recognized that due to the fact that most insurance policies surrendered to the insurance company control of the investigation, adjustment of claims, and defensible lawsuits, that a relationship arises between the insured and insurer, which imposes on the insured of the duty to exercise skill, care, and good faith to the end of saving the insured harmless, as contemplated by the contract of indemnity. Boling v. New Amsterdam Casualty Co., 46 P.2d 916 (Okla. 1935).

Equal Consideration DoctrineEqual Consideration Doctrine In determining whether or not to accept an

offer to settle within the policy limits, an insurance company may give appropriate considerations to its own interest, but must also give equal considerations to the interest of the insured, and the failure to do so, constitutes bad faith, which renders the insurer liable to the insured for the resulting damages if the judgment against the insured exceeds the amount of the insurance. American Fidelity & Cas. Co. v. All American Bus Lines, 190 F.2d 234 (10th Cir. 1951); and National Mutual Casualty Co. v. Britt, 200 P.2d 407 (Okla. 1948).

Badillo opinion said:Badillo opinion said:

Must treat you insured who has third Must treat you insured who has third party liability claim against them as party liability claim against them as you would want to be treated if you you would want to be treated if you where in there shoes.where in there shoes.

EVIDENTIARY RULES:

FOR MOTOR VEHICLE ACCIDENT CASES

Accident Report Not Admissible:

Smith v. Wilkens, 403 P.2d 485 (Okla. 1965); and

Sparks v. St. Louis & San Francisco Railway Corporation, 336 F.Supp. 957 (USND 1973).

Opinion as to Fault of Investigating Officer Who Did

Not Witness Accident Not Admissible:

Gabus v. Harvey, 678 P.2d 253 (Okla. 1984).

Traffic Tickets Which Are Paid Without Plea or Paid on Plea of

No Contest Not Admissible:

Walker v. Forrester, 764 P.2d 1337 (Okla. 1988); and

Dover v. Smith, 385 P.2d 287 (Okla. 1963).

Medical Expert Testimony Medical Expert Testimony Needed to Support Claims For Needed to Support Claims For

Future Medical Expenses:Future Medical Expenses:

Matchin v. McGaheyMatchin v. McGahey, 455 P.2d 52, 57 , 455 P.2d 52, 57 (Okla. 1969).(Okla. 1969).

Existence of Liability Insurance Existence of Liability Insurance InadmissibleInadmissible

1.1. Redman v. McDanielRedman v. McDaniel, 333 P.2d , 333 P.2d 500 (Okla. 1958);500 (Okla. 1958);

2.2. Matchin v. McGaheyMatchin v. McGahey, 455 , 455 P.2d 52, 54 (Okla. 1969);P.2d 52, 54 (Okla. 1969);

3.3. Hutton v. LoweryHutton v. Lowery, 445 P.2d , 445 P.2d 812 (Okla. 1968); and812 (Okla. 1968); and

4.4. Bacon v. WassBacon v. Wass, 198 P.2d , 198 P.2d 423 (Okla. 1948).423 (Okla. 1948).

BREEN v. GARDNERBREEN v. GARDNER2011 OK CIV APP 582011 OK CIV APP 58

Court of Appeals case finding the Court of Appeals case finding the trooper testifyingtrooper testifying that his that his investigation involved investigation involved "taking down "taking down information, the driver's license and information, the driver's license and insurance on the accident",insurance on the accident", in the in the Court's opinion Court's opinion did not inform that did not inform that jury that the Defendant had jury that the Defendant had insuranceinsurance and was not enough to and was not enough to merit a mistrial or new trial. merit a mistrial or new trial.

Prior Settlement Admissible to Prior Settlement Admissible to Show Evidence of Fault of Show Evidence of Fault of Property Damage Not In Property Damage Not In

Subsequent Personal Injury Subsequent Personal Injury CaseCase

12 O.S. § 2408 12 O.S. § 2408

Tort Reform that may effect Tort Reform that may effect automobile casesautomobile cases

Tort Reform Changes Tort Reform Changes

Joint and Several LiabilityJoint and Several Liability Prayer In PetitionPrayer In Petition Initial Disclosure of DamagesInitial Disclosure of Damages Dismissal After PretrialDismissal After Pretrial Prejudgment InterestPrejudgment Interest Use and Nonuse Of SeatbeltsUse and Nonuse Of Seatbelts Dismissal For Failure To ServeDismissal For Failure To Serve Noneconomic Damage CapNoneconomic Damage Cap Limited Damages if You Fail to Carry Liability Limited Damages if You Fail to Carry Liability

InsuranceInsurance Jury Instruct to Disregard Tax Implications Jury Instruct to Disregard Tax Implications

Joint and Several LiabilityJoint and Several Liability On accidents before November 1, 2009:On accidents before November 1, 2009:

Negligent free claimant can collect from any Negligent free claimant can collect from any tortfeasor who is 1% of more comparatively tortfeasor who is 1% of more comparatively negligent.negligent.

A claimant who is comparatively negligent can A claimant who is comparatively negligent can collect all his/her damages from a tortfeasor who collect all his/her damages from a tortfeasor who is more than 50% negligent, or whose conduct is is more than 50% negligent, or whose conduct is willful and wanton or is done with reckless willful and wanton or is done with reckless disregard of the consequences of the conduct.disregard of the consequences of the conduct.

A claimant who is comparatively negligent can A claimant who is comparatively negligent can collect can only collect the % of negligence times collect can only collect the % of negligence times his/her damages from a tortfeasor who is 50% or his/her damages from a tortfeasor who is 50% or less negligent.less negligent.

Joint and Several LiabilityJoint and Several Liability For accidents after November 1, 2009:For accidents after November 1, 2009:

A defendant shall be jointly and severally liable for A defendant shall be jointly and severally liable for the damages recoverable by the plaintiff if the the damages recoverable by the plaintiff if the percentage of responsibility attributed to the percentage of responsibility attributed to the defendant with respect to a cause of action is greater defendant with respect to a cause of action is greater than fifty percent (50%). If at the time the incident than fifty percent (50%). If at the time the incident which gave rise to the cause of action occurred, a which gave rise to the cause of action occurred, a joint tortfeasor acted with willful and wanton conduct joint tortfeasor acted with willful and wanton conduct or with reckless disregard of the consequences of the or with reckless disregard of the consequences of the conduct and such conduct proximately caused the conduct and such conduct proximately caused the damages legally recoverable by the plaintiff, the damages legally recoverable by the plaintiff, the liability for damages shall be joint and several as to liability for damages shall be joint and several as to any such tortfeasor. any such tortfeasor.

So What Is The DifferenceSo What Is The Difference

After November 1, 2009After November 1, 2009, there was , there was no longer be a joint and several no longer be a joint and several liability just because the claimant is liability just because the claimant is negligent free.negligent free.

For cases accruing For cases accruing after November 1, after November 1, 2011, there is no longer any joint and 2011, there is no longer any joint and several liabilityseveral liability. 23 O.S. Section 15.. 23 O.S. Section 15.

Dismissal For Failure To ServeDismissal For Failure To Serve

Petition that is not served within 180 Petition that is not served within 180 days of filing shall be deemed days of filing shall be deemed dismissed unless plaintiff can show dismissed unless plaintiff can show “good cause”. Change previous “good cause”. Change previous statutory lanuage of “may”.statutory lanuage of “may”.

Prayer In PetitionPrayer In Petition

Prayer must state whether damages Prayer must state whether damages sought a more than the amount sought a more than the amount required for diversity jurisdiction in required for diversity jurisdiction in federal court (currently $75,000.00)federal court (currently $75,000.00)

Use and Nonuse Of SeatbeltsUse and Nonuse Of Seatbelts

For plaintiffs For plaintiffs over the age of 16over the age of 16, , evidence of the use or non-use of evidence of the use or non-use of seatbelts will be admissible. Title 47 seatbelts will be admissible. Title 47 Section 420 and 11-1112.Section 420 and 11-1112.

Initial Disclosure of DamagesInitial Disclosure of Damages Within 60 days of service of processWithin 60 days of service of process, ,

except to the extent otherwise stipulated or except to the extent otherwise stipulated or directed by order, a party, without awaiting directed by order, a party, without awaiting a discovery request, must provide to other a discovery request, must provide to other parties a parties a computation of any category computation of any category of damages claimed by the disclosing of damages claimed by the disclosing party, making available for inspection party, making available for inspection and copying the documents or other and copying the documents or other evidentiary material, not privileged or evidentiary material, not privileged or protected from disclosure, on which protected from disclosure, on which such computation is based, including such computation is based, including materials bearing on the nature and materials bearing on the nature and extent of injuries suffered. extent of injuries suffered.

Dismissal After PretrialDismissal After Pretrial

After the pretrial hearing, an action may After the pretrial hearing, an action may only be dismissed by agreement of the only be dismissed by agreement of the parties or by the court.parties or by the court.

If a plaintiff who has once dismissed an If a plaintiff who has once dismissed an action in any court commences an action action in any court commences an action based upon or including the same claim based upon or including the same claim against the same defendant, the court against the same defendant, the court maymay make such order for the payment of costs make such order for the payment of costs of the action previously dismissed as it may of the action previously dismissed as it may deem proper and may stay the proceedings deem proper and may stay the proceedings in the action until the plaintiff has complied in the action until the plaintiff has complied with the order. with the order.

Prejudgment InterestPrejudgment Interest

If a verdict for damages by reason of If a verdict for damages by reason of personal injuries or injury to personal rights personal injuries or injury to personal rights including, but not limited to, injury resulting including, but not limited to, injury resulting from bodily restraint, personal insult, from bodily restraint, personal insult, defamation, invasion of privacy, injury to defamation, invasion of privacy, injury to personal relations, or detriment due to an act personal relations, or detriment due to an act or omission of another is accepted by the or omission of another is accepted by the trial court, trial court, no prejudgment interest shall no prejudgment interest shall begin to accrue until twenty-four (24) months begin to accrue until twenty-four (24) months after the suit resulting in the judgment was after the suit resulting in the judgment was commencedcommenced. .

Noneconomic Damage CapsNoneconomic Damage Caps23 O.S. Section 61.223 O.S. Section 61.2

On cases filed after November 1, On cases filed after November 1, 2011, 2011, there is a $350,000.00 cap on there is a $350,000.00 cap on noneconomic damagesnoneconomic damages unless: unless:

1. Reckless disregard for the rights of 1. Reckless disregard for the rights of others;others;

2. Gross negligence;2. Gross negligence; 3. Fraudulent; or3. Fraudulent; or 4. Intentional or with malice4. Intentional or with malice

Elimination of General VerdictElimination of General Verdict

Judge or jury must specify:Judge or jury must specify: 1. The total compensation 1. The total compensation

recoverable;recoverable; 2. The portion of the total 2. The portion of the total

compensation recoverable compensation recoverable representing economic loss; andrepresenting economic loss; and

3. 3. The portion of the total The portion of the total compensation recoverable compensation recoverable representing noneconomic loss.representing noneconomic loss.

Failure To Carry Minimum Liability Failure To Carry Minimum Liability Insurance Limits DamagesInsurance Limits Damages

For cases filed after November 1, 2011, For cases filed after November 1, 2011, a person who has failed to carrier a person who has failed to carrier the compulsory minimum liability limits will be limited to recovery of the compulsory minimum liability limits will be limited to recovery of medical expenses, lost wages, and property damage.medical expenses, lost wages, and property damage.

No award can be made for pain and suffering unless:No award can be made for pain and suffering unless:

1. The tortfeasor is under the affect of alcohol or drugs;1. The tortfeasor is under the affect of alcohol or drugs; 2. The plaintiff is a passenger, unless the plaintiff is the owner of the car;2. The plaintiff is a passenger, unless the plaintiff is the owner of the car; 3. The plaintiff was not in any vehicle involved in the accident;3. The plaintiff was not in any vehicle involved in the accident; 4. it is a wrongful death claim; 4. it is a wrongful death claim; 5. The plaintiff was claimed as a dependant on one or both of the their5. The plaintiff was claimed as a dependant on one or both of the their parent’s tax returns and the parent is the one who failed to carry the parent’s tax returns and the parent is the one who failed to carry the insurance;insurance;

6. A policy of liability insurance was terminated or nonrenewed within the 6. A policy of liability insurance was terminated or nonrenewed within the last 30 days.last 30 days. 7. If the motorist who caused the accident:7. If the motorist who caused the accident:

a. Left the scene;a. Left the scene; b. Intentionally caused the accident; or b. Intentionally caused the accident; or

c. At the time of the accident was acting in the furtherance of the c. At the time of the accident was acting in the furtherance of the commission of a felony. commission of a felony.

Evidence of Medical Expenses is Evidence of Medical Expenses is Amount Paid, not Amount of BillAmount Paid, not Amount of Bill

On cases filed after November 1, On cases filed after November 1, 2011, the 2011, the amount the medical amount the medical provider accepted or has agreed to provider accepted or has agreed to accept in payment for the medical accept in payment for the medical services is the admissible evidence services is the admissible evidence for medical expensesfor medical expenses at trial, not the at trial, not the actual amount billed.actual amount billed.

12 O. S. Section 3009.112 O. S. Section 3009.1

Jury Instruction of TaxesJury Instruction of Taxes

On case filed after November 1, On case filed after November 1, 2011, the Court shall instruct the jury 2011, the Court shall instruct the jury that awards for personal injury and that awards for personal injury and wrongful death are not subject to wrongful death are not subject to State or Federal Income taxes, andState or Federal Income taxes, and

Compensation for personal injuries or Compensation for personal injuries or wrongful death should not be wrongful death should not be increased or decreases by any increased or decreases by any consideration for income tax. 12 consideration for income tax. 12 O.S. Section 577.4O.S. Section 577.4

How Many How Many Potential Claims?Potential Claims?

Questions?Questions?

Actions That Violate the Unfair Claims Settlement Practice Act

1. Failing to fully disclose to first party claimants, benefits, coverages, or other provisions of any insurance policy or insurance contract when such benefits, coverages or other provisions are pertinent to a claim;

Actions That Violate the Unfair Claims Settlement Practice Act

2. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages at issue;

Actions That Violate the Unfair Claims Settlement Practice Act

3. Failing to adopt and implement reasonable standards for prompt investigations of claims arising under its insurance policies or insurance contracts;

Actions That Violate the Unfair Claims Settlement Practice Act

4. Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;

5. Denying a claim for failure to exhibit the property without proof of demand and unfounded refusal by a claimant to do so;

6. Except where there is a time limit specified in the policy, making statements, written or otherwise, which require a claimant to give written notice of loss or proof of loss within a specified time limit and which seek to relieve the company of its obligations if such a time limit is not complied with unless the failure to comply with such time limit prejudices an insurer's rights;

7. Requesting a claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment;

8. Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language which releases an insurer or its insured from its total liability;

9. Compelling, without just cause, policyholders to institute suits to recover amounts due under its insurance policies or insurance contracts by offering substantially less than the amounts ultimately recovered in suits brought by them, when such policyholders have made claims for amounts reasonably similar to the amounts ultimately recovered;

Acknowledgement of Receipt of Claim

Every property and casualty insurer, within thirty (30) days after receiving notification of a claim, shall acknowledge the receipt of such notification unless payment is made within such period of time. If an acknowledgement is made by means other than writing, an appropriate notation of such acknowledgement shall be made in the claim file of the property and casualty insurer, and dated. Notification given to an agent of a property and casualty insurer shall be notification to the insurer.

Duty to Provide Forms and Duty to Provide Forms and Instructions to 1Instructions to 1stst Party Insureds Party Insureds

Every property and casualty insurer, upon receiving notification of a claim, promptly shall provide necessary claim forms, instruction, and reasonable assistance so that first party claimants can comply with the policy conditions and the reasonable requirements of the property and casualty insurer.

Notification of Statute of Limitation Notification of Statute of Limitation to Unrepresented Claimantsto Unrepresented Claimants

Insurers shall not continue or delay negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney, for a length of time which causes the claimant's rights to be affected by a statute of limitations, or a policy or contract time limit, without giving the claimant written notice that the time limit is expiring and may affect the claimant's rights. Such notice shall be given to first party claimants thirty (30) days, and to third party claimants sixty (60) days, before the date on which such time limit may expire.

To Time Limits On Signing of To Time Limits On Signing of Release Other Than Statute of Release Other Than Statute of

LimitationsLimitations No insurer shall make statements

which indicate that the rights of a third party claimant may be impaired if a form or release is not completed within a given period of time unless the statement is given for the purpose of notifying a third party claimant of the provision of a statute of limitations.

No Encouraging 3No Encouraging 3rdrd Party Claimant Party Claimant To Use Own Coverage When To Use Own Coverage When

Liability Is ClearLiability Is Clear

If liability for motor vehicle damages is reasonably clear, insurers shall not recommend that third party claimants make claims pursuant to the third party claimants' own policies solely to avoid paying claims pursuant to such insurer's insurance policy or insurance contract.

No Unreasonable Travel No Unreasonable Travel Requirements of ClaimantsRequirements of Claimants

Insurers shall not require a claimant to travel unreasonably either to inspect a replacement motor vehicle, obtain a repair estimate or have the motor vehicle repaired at a specific repair shop.

SubrogationSubrogation Insurers shall, upon the request of a

claimant, include the deductible of a first party claimant, if any, in subrogation demands. Subrogation recoveries shall be shared on a proportionate basis with a first party claimant, unless the deductible amount has been otherwise recovered. No deduction for expenses shall be made from a deductible recovery unless an outside attorney is retained to collect such recovery. The deduction shall then be made for only a pro rata share of the allocated loss adjustment expense.

Reductions For Betterment and Reductions For Betterment and DepreciationDepreciation

If an amount claimed is reduced because of betterment or depreciation, all information for such reduction shall be contained in the claim file. Such deductions shall be itemized and specified as to dollar amount and shall be appropriate for the amount of deductions.

No Release of All Claims to Settle No Release of All Claims to Settle PD When BI PendingPD When BI Pending

An insurer shall not force a claimant to execute a full settlement release in order to settle a property damage claim involving a personal injury.

Duty To Include Lienholder on 3Duty To Include Lienholder on 3rdrd Party Total LossParty Total Loss

In the event of payment of a total loss to a third party claimant, the insurer shall include any registered lien holder as copayee to the extent of the lienholder’s interest.

And the And the answer is?answer is?