COATES v. PROGRESSIVE DIRECT INSURANCE CO.
2022 OK 45
Okla.2022Background
- On August 14, 2019 John Randall Coates was injured riding his 1964 Triumph motorcycle in a collision.
- Coates had two Progressive policies: a motorcycle policy (he rejected UM coverage) and an auto policy for a truck (he purchased UM coverage: $25,000 per person).
- Progressive denied UM benefits under the auto policy for the motorcycle accident, relying on an exclusion (Part III, 1(b)) that bars UM when the injured person was using a vehicle owned or regularly available to the insured but not a "covered auto" under that policy.
- Coates sued for breach of contract (seeking UM benefits) and bad faith; he moved for partial summary judgment on UM entitlement. The trial court granted UM relief but granted summary judgment for Progressive on bad faith and denied Coates additional discovery time.
- The Oklahoma Supreme Court affirmed entitlement to UM benefits under the auto policy (holding the exclusion impermissibly undermined the statutory scheme) but reversed the denial of discovery on the bad-faith claim and remanded for further proceedings on bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Coates is entitled to UM benefits under his auto policy for injuries sustained on his motorcycle | Coates: UM coverage "follows the person"; he paid for UM under the auto policy and the statute protects persons, so the exclusion that tracks the vehicle cannot deny his UM recovery | Progressive: Exclusion 1(b) excludes UM when the injured person was using a vehicle not listed as a covered auto; because Coates rejected UM on the motorcycle policy, the auto-policy UM does not apply to that vehicle | Held: UM follows the person; Exclusion 1(b) as applied would conflict with 36 O.S. § 3636(E)/public policy and cannot bar Coates' UM recovery under the auto policy — judgment for Coates on UM entitlement affirmed |
| Whether Progressive is liable for bad faith for denying Coates' UM claim and whether Coates was entitled to discovery before summary judgment on bad faith | Coates: Progressive's denial was unreasonable and may have been motivated by internal guidelines; he should be allowed discovery into Progressive's decisionmaking to support bad-faith claim | Progressive: Legitimate, unsettled legal dispute over application of Exclusion 1(b); withholding payment and litigating was reasonable — summary judgment proper; no further discovery needed | Held: Trial court abused its discretion in denying Coates a continuance and discovery on bad faith; summary judgment for Progressive on bad faith reversed and remanded for further discovery/trial (no determination on merits of bad-faith) |
Key Cases Cited
- Ball v. Wilshire Ins. Co., 221 P.3d 717 (2009 OK 38) (public-policy/bad-faith standards in UM context)
- Lane v. Progressive Northern Ins. Co., 494 P.3d 345 (2021 OK 40) (UM coverage separate from liability; protects persons)
- Morris v. America First Ins. Co., 240 P.3d 661 (2010 OK 35) (UM coverage "follows the person")
- State Farm Auto. Ins. Co. v. Greer, 777 P.2d 941 (1989 OK 110) (purpose of UM coverage)
- Vickers v. Progressive Northern Ins. Co., 353 F. Supp. 3d 1153 (N.D. Okla. 2018) (district-court analysis of Progressive's Exclusion 1(b))
- Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 11 P.3d 162 (2000 OK 55) (denial/litigation of claim not per se bad faith)
- Christian v. Am. Home Assur. Co., 577 P.2d 899 (1977 OK 141) (origin and limits of insurer bad-faith tort)