MARTIN v. GRAY
2016 OK 114
| Okla. | 2016Background
- Kourtni Martin (insured) was seriously injured in an Oklahoma City auto collision on May 31, 2013; she had uninsured motorist (UM) coverage issued by Goodville Mutual (insurer).
- The policy was bought by her parents in Kansas; Martin was a listed driver and had told the Kansas agent she would garage the vehicle in Oklahoma.
- Martin sued the tortfeasor, Nicholas Gray, and also sought UM benefits from Goodville; insurer adjusted the claim from Pennsylvania and made limited offers.
- Martin amended to add breach of contract and an insurer bad-faith claim based on allegedly inadequate, delayed, and biased claim handling.
- The trial court applied Kansas law (relying on contract choice rules and Oklahoma UM statutes) and dismissed the bad-faith claim because Kansas purportedly does not recognize that tort; the dismissal was certified for interlocutory review.
- The Oklahoma Supreme Court held the insurer’s bad-faith duty is an independent tort subject to the most-significant-relationship choice-of-law test (not automatic application of Kansas law); the court reversed and remanded; the case was dismissed on settlement grounds but the legal holding was preserved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer bad-faith claim is governed by contract choice-of-law rules or treated as an independent tort for conflicts analysis | Martin: bad-faith is a tort independent of contract so tort choice-of-law applies | Goodville: bad-faith arises from the contract so contract choice rules (and Kansas law) apply | Held: Bad-faith is an independent tort; apply the most-significant-relationship (tort) test |
| Whether Kansas law automatically governs Martin’s bad-faith claim because the policy was issued in Kansas | Martin: contest automatic application; contacts point to Oklahoma/Pennsylvania | Goodville: policy purchased in Kansas and agent in Kansas—Kansas law should apply | Held: Trial court erred to apply Kansas law automatically; must evaluate most-significant-relationship factors |
| Proper conflict-of-law test for bad-faith claims | Martin: Brickner most-significant-relationship test for torts controls | Goodville: contract-based rules (place of performance/making) control | Held: Use Brickner factors (place of injury, conduct, parties’ domiciles, where relationship occurred) |
| Remedy given interlocutory certification and subsequent settlement | Martin: sought review of certified order dismissing bad-faith claim | Goodville: dismissal under Kansas law was proper; parties later settled | Held: Court addressed public-interest conflict-of-law question, reversed trial court; remanded with instruction to dismiss based on settlement |
Key Cases Cited
- Christian v. American Home Assurance Co., 577 P.2d 899 (1977 OK 141) (establishes insurer bad-faith as an independent tort imposed by law)
- McCorkle v. Great Atlantic Insurance Co., 637 P.2d 583 (1981 OK 128) (reaffirms Christian; describes bad faith as an independent and intentional tort)
- Brickner v. Gooden, 525 P.2d 632 (1974 OK 91) (adopts most-significant-relationship test for tort choice-of-law)
- Panama Processes, S.A. v. Cities Service Co., 796 P.2d 276 (1990 OK 66) (applied contract choice rules where breach theory derived from fiduciary obligations tied to contract)
- Hall Jones Oil Corp. v. Claro, 459 P.2d 858 (1969 OK 113) (explains that torts may arise from contractual relations when conduct is intentional)