COATES v. PROGRESSIVE DIRECT INSURANCE CO., 512 P.3d 345

On August 14, 2019 John Randall Coates was injured in a motorcycle collision. He held two Progressive policies: a motorcycle policy (he rejected UM coverage) and an auto policy (he purchased UM coverage: $25,000 per person/$50,000 per accident).
Coates claimed UM benefits under both policies; Progressive accepted there was no motorcycle-policy UM but denied coverage under the auto-policy UM because the motorcycle was not a "covered auto," invoking an Exclusion (Part III, 1(b)).
Coates sued for breach of contract (UM benefits) and bad faith refusal to pay. He moved for partial summary judgment on UM entitlement; Progressive moved for summary judgment on both claims and sought denial of discovery.
The trial court granted Coates partial summary judgment on UM, denied his request for more discovery, and granted Progressive summary judgment on the bad-faith claim.
The Oklahoma Supreme Court affirmed entitlement to UM benefits under the auto policy, held Progressive’s vehicle-focused exclusion conflicted with UM public policy as applied, reversed the grant of summary judgment on bad faith, and reversed the denial of additional discovery so the bad-faith claim could be developed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Coates is entitled to UM benefits under his Progressive auto policy for a motorcycle accident	UM coverage "follows the person"; Coates paid for UM on the auto policy so it should cover his injury despite the motorcycle not being a listed covered auto	Exclusion 1(b) bars UM when injury occurs in a vehicle owned/available for regular use that is not a covered auto; Coates rejected UM on the motorcycle policy so auto-policy UM does not apply	Court: UM follows the person; Exclusion 1(b) as applied to deny Coates benefits violates Oklahoma public policy — entitlement to auto-policy UM affirmed
Whether Progressive acted in bad faith in denying the claim and whether Coates was entitled to discovery on that claim	Progressive’s denial was unreasonable and possibly deliberate; discovery into Progressive’s internal guidelines and decisionmaking could show bad faith	There was a legitimate, unsettled legal dispute over Exclusion 1(b); withholding payment and litigation were reasonable, so no bad faith	Court: Trial court abused discretion in denying Coates discovery and granting summary judgment on bad faith; remand for discovery and further proceedings on bad-faith claim

Ball v. Wilshire Ins. Co., 221 P.3d 717 (Okla. 2009) (framework for balancing contract freedom and public policy when interpreting auto-insurance provisions)
Lane v. Progressive Northern Ins. Co., 494 P.3d 345 (Okla. 2021) (UM coverage is separate from liability coverage and protects the person)
Morris v. America First Ins. Co., 240 P.3d 661 (Okla. 2010) (UM coverage follows the person; statutory exclusion may include UM policies)
Vickers v. Progressive Northern Ins. Co., 353 F. Supp. 3d 1153 (N.D. Okla. 2018) (district court analysis of Progressive's Exclusion 1(b) and the offer/opportunity-to-purchase factor)
Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 11 P.3d 162 (Okla. 2000) (denial or litigation of a claim does not alone establish bad faith)
Christian v. Am. Home Assurance Co., 577 P.2d 899 (Okla. 1977) (recognition and scope of the tort of insurer bad faith)
May v. Nat'l Union Fire Ins. of Pittsburgh, Pa., 918 P.2d 43 (Okla. 1996) (purpose of UM provisions: place insured in same position as if negligent motorist had complied with financial-responsibility laws)