MARTIN v. GRAY
2016 OK 114
| Okla. | 2016Background
- Kourtni Martin (Insured) was seriously injured in an Oklahoma City car crash on May 31, 2013; she had uninsured motorist (UM) coverage under a Goodville Mutual policy purchased by her parents in Kansas.
- Prior to the crash, Insured’s parents told the Kansas agent she would move to Oklahoma and garage the vehicle there; Insured was a listed/rated driver on the Kansas policy.
- Insured reported the claim to the Kansas agent; the insurer (Goodville) is principally located in Pennsylvania and adjusted the claim from Pennsylvania. Efforts to locate/serve the at-fault driver failed.
- Insured sued the tortfeasor and then amended to add breach of contract and bad-faith claims against Goodville after settlement negotiations and limited offers by the insurer.
- The trial court applied Kansas law and dismissed the bad-faith claim (Kansas, the trial court held, does not recognize the common-law insurer bad-faith tort), certifying the issue for interlocutory review; the Supreme Court granted review.
- Parties later settled; the Supreme Court addressed the substantive question as one of public importance and remanded with instructions to dismiss based on settlement after holding the trial court erred in its choice-of-law approach.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer bad-faith claim is an independent tort for choice-of-law purposes | Martin: Bad-faith is an independent tort under Oklahoma law (Christian/McCorkle), so tort choice rules apply | Goodville: Bad-faith arises out of the contract and contract choice rules apply | Held: Bad-faith is an independent tort under Oklahoma law; apply tort conflicts test (most significant relationship) |
| Whether Kansas law should be applied automatically to Insured’s bad-faith claim | Martin: Kansas law should not be applied automatically; the most-significant-relationship test must be used for torts | Goodville: Kansas law applies (policy issued in Kansas; policy purchased in Kansas; Kansas does not recognize bad-faith tort) | Held: Trial court erred to apply Kansas law automatically; must evaluate most-significant-relationship factors (place of injury, conduct, domiciles, relation) — remanded (but case dismissed on settlement) |
Key Cases Cited
- Christian v. American Home Assurance Co., 577 P.2d 899 (Okla. 1977) (recognizes insurer’s implied duty of good faith as a distinct tort)
- McCorkle v. Great Atlantic Insurance Co., 637 P.2d 583 (Okla. 1981) (reaffirms Christian and characterizes insurer bad faith as an independent, intentional tort)
- Panama Processes, S.A. v. Cities Service Co., 796 P.2d 276 (Okla. 1990) (applied contract choice rules where breach-of-duty claim was grounded in fiduciary obligations arising from a contract)
- Brickner v. Gooden, 525 P.2d 632 (Okla. 1974) (adopts the most-significant-relationship test for multi-state torts)