TRINITY BAPTIST CHURCH v. BROTHERHOOD MUTUAL INSURANCE SERVICES, LLC
2014 OK 106
| Okla. | 2014Background
- Trinity Baptist Church claimed storm damage to its sanctuary and submitted a claim to Brotherhood Mutual; Brotherhood hired Sooner Claims Services (an independent adjuster) to investigate.
- Sooner performed inspections and provided reports and estimates to Brotherhood pursuant to a Limited Assignment; Trinity agreed Sooner had no authority to make coverage determinations to Trinity and Sooner billed Brotherhood.
- Trinity sued Brotherhood and Sooner alleging breach of contract, bad faith, and gross negligence in the handling/adjustment of the claim; Trinity later settled with Brotherhood.
- Sooner moved for summary judgment arguing it owed no duty of good faith or negligence-based duty to Trinity; the trial court granted summary judgment for Sooner and dismissed Trinity’s claims.
- On appeal the Oklahoma Supreme Court considered (1) whether an independent adjuster can be subject to the insurer’s implied covenant of good faith/fair dealing by virtue of a special relationship, and (2) whether an independent adjuster owes a separate tort duty of care to an insured.
- The Court affirmed: Sooner did not have a special-relationship creating the implied duty and owed no independent legal duty in tort to Trinity for claim adjustment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an independent adjuster can be subject to the insurer's implied duty of good faith and fair dealing | Sooner acted beyond a typical adjuster, developed a special relationship with Trinity and therefore owed the implied duty | Sooner was a stranger to the insurance contract, performed limited duties for Brotherhood, and did not stand in the insurer's shoes | No — absent facts showing the adjuster acted like an insurer (power, motive, opportunity), no special relationship; Sooner owed no implied duty |
| Whether an independent adjuster owes a tort duty of care to the insured for negligent claim handling | Trinity urged courts should adopt the minority rule recognizing a negligence duty by adjusters to insureds | Sooner argued public policy, agency structure, and insurer’s nondelegable duty mean adjusters owe no independent tort duty to insureds | No — Court declined to create a separate negligence duty for adjusters where insurer already bears non-delegable duties; risk of conflicting loyalties and double recovery counseled against imposing such duty |
| Whether summary judgment on damages issues deprived Trinity of a remedy | Trinity contended genuine issues of damages remained (including gross negligence) | Sooner argued corporate plaintiff cannot recover emotional damages and, because no duty existed, damages are irrelevant | Court found no duty in tort or implied covenant, so damages analysis unnecessary; affirmed summary judgment for Sooner |
| Whether the trial court erred by partially denying summary judgment on gross negligence | Trinity said triable issue existed as to gross negligence by Sooner | Sooner said without duty there can be no negligence claim | Court held the controlling legal error was lack of duty; trial court’s judgment is affirmed (no tort duty) |
Key Cases Cited
- Timmons v. Royal Globe Ins. Co., 653 P.2d 907 (Okla. 1982) (third parties generally not subject to insurer's implied covenant absent special relationship)
- Wathor v. Mutual Assurance Administrators, 87 P.3d 559 (Okla. 2004) (adopts special-relationship test; insurer's duty non-delegable; summary judgment appropriate when third party not acting like insurer)
- Badillo v. Mid Century Ins. Co., 121 P.3d 1080 (Okla. 2005) (distinguishes facts where related entities acted like the insurer and thus could owe implied duty)
- Wolf v. Prudential Ins. Co. of America, 50 F.3d 793 (10th Cir. 1995) (special-relationship focus: when an administrator has insurer-like control/financial motive, duty may arise)
- Brown v. State Farm Fire & Cas. Co., 58 P.3d 217 (Okla. Civ. App. 2002) (Court of Civ. App. adopted minority rule that adjusters may owe insureds a duty to investigate reasonably)