Vickers v. Progressive N. Ins. Co.
353 F. Supp. 3d 1153
| N.D. Okla. | 2018Background
- On Jan 10, 2015 Joseph Vickers (resident son on his father's Progressive policy) was injured in a car accident while driving a 2005 GMC Sierra owned/insured by his father under a separate Hanover commercial policy; Rahman (other driver) had $25,000/$50,000 liability limits.
- Progressive Northern's personal auto policy (named insured: Rick Vickers) listed Joseph as a household driver and included UM/UIM limits of $100,000/$300,000 but the Sierra was not a covered auto on that Progressive policy.
- Progressive's policy contained Exclusion 1(b): no UM coverage for bodily injury sustained while occupying a vehicle "owned by or available for regular use of you or a relative" unless that vehicle is insured under the policy or the relative has obtained UM coverage elsewhere.
- Progressive used counsel-developed guidelines to apply Exclusion 1(b); after investigation it denied coverage but voluntarily paid $25,000 (statutory minimum) as a business decision; Vickers accepted the tender and later sued after settling with Rahman.
- The court held Exclusion 1(b) is void as applied to Vickers because he did not own the vehicle (had no opportunity to purchase his own UM coverage) and Oklahoma law treats UM coverage as following the person rather than the vehicle; but the court found Progressive did not act in bad faith in denying coverage and awarding the statutory minimum.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Exclusion 1(b) violates Oklahoma public policy under OKLA. STAT. tit. 36 § 3636 | Exclusion is void because UM follows the person; Vickers (a non-owner resident) had no opportunity to buy his own UM and thus cannot be excluded | Exclusion is valid under Conner/Morris jurisprudence permitting exclusions when resident insured had opportunity to buy separate UM for the vehicle | Court: Exclusion 1(b) is void as applied to Vickers (he did not own the vehicle and had no chance to buy UM) |
| Whether Exclusion 1(b) applies to bar coverage for this accident | Sierra was not regularly available to Vickers; exclusion thus shouldn't apply | Sierra was owned/available for regular use by named insured Rick Vickers and not a covered auto; exclusion should apply | Court did not decide applicability because exclusion was void as applied; reserved contract-construction question |
| Whether Progressive breached duty of good faith and fair dealing (bad faith) | Progressive delayed/denied payment, misrepresented coverage, conducted duplicitous investigation, compelled counsel | Progressive had a reasonable, non-frivolous legal basis (relying on Conner/Morris and counsel guidance), investigated and timely tendered statutory-minimum coverage | Court: Grant summary judgment for Progressive on bad-faith claim—no genuine issue of tortious conduct; conduct reasonable and based on counsel advice |
| Whether either party is entitled to summary judgment on breach-of-contract (UM) claim | Vickers: entitled to summary judgment because exclusion invalid | Progressive: entitled to partial summary judgment that exclusion valid and barred coverage | Court: Denied summary judgment to both on breach-of-contract claim (genuine factual disputes remain about preconditions of loss and damages) |
Key Cases Cited
- Ball v. Wilshire Ins. Co., 221 P.3d 717 (Okla. 2009) (upholds certain owner-based UM exclusions where insured had opportunity to purchase UM)
- Morris v. American First Ins. Co., 240 P.3d 661 (Okla. 2010) (interprets § 3636(E) to mean the phrase refers to UM coverage)
- Conner v. American Commerce Ins., 216 P.3d 850 (Okla. Civ. App. 2009) (upheld an exclusion similar to Exclusion 1(b) where resident insured had opportunity to buy separate UM)
- Shepard v. Farmers Ins. Co., 678 P.2d 250 (Okla. 1983) (policies interpreted in light of statutes; courts will not rewrite contracts)
- Christian v. American Home Assurance Co., 577 P.2d 899 (Okla. 1977) (insurer's implied duty of good faith and fair dealing)
- Badillo v. Mid-Century Ins. Co., 121 P.3d 1080 (Okla. 2005) (bad-faith standard: conduct more than simple negligence but less than recklessness required)
- Garnett v. Government Employees Ins. Co., 186 P.3d 935 (Okla. 2008) (court must first decide as a matter of law whether insurer's conduct may be tortious before sending bad-faith to jury)
- Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 11 P.3d 162 (Okla. 2000) (insurer may rely on reasonable advice of counsel; seeking judicial resolution is not bad faith)
- Davis v. Progressive Northern Ins. Co., 288 P.3d 270 (Okla. Civ. App. 2012) (Exclusion must be construed to conform with Oklahoma insurance statutes)
- Gates v. Eller, 22 P.3d 1215 (Okla. 2001) (preconditions for UM/UIM recovery include tortfeasor uninsured/underinsured and at fault)