*1 by аpplication attainable of the Best Practi- Technology Currently cable Control Avail- Shirley CLABORN, Repre- as Personal (BPT). granted
able Power has been to the sentative for the Estate of Robert E. Department of Mines to enforce Claborn, Deceased, Appellee, requirements of the Coal Reclаmation of agents Act of 1979.3 The of the Oklahoma WASHINGTON NATIONAL INSURANCE Department qualified of Mines are the ex- COMPANY, an Illinois insurance
perts in present case. Substantial evi- corporation, Appellant. presented dence was at the administrative hearing that P & K Ltd. was violation No. 78682. pH guidelines. The order is otherwise Supreme Court Oklahоma. free from error and the decision of the Okla- Department homa of Mines must be af- Jan. firmed.
Moreover, Legislature the intent of the is
plainly defined Statute that if reclamation feasible,
is not mining operations surface
should not be conducted. In the
case presented by the substantial evidence
the State of Oklahoma is in accordance with intent, statutory therefore, P & K’s merit, argument
economic espe- without
cially since there was evidence evidentiary hearing that P K& was
aware of ground with the water in prior mining
the area to the and reclamation
process. P & K went into this business
venture with full of the economic involved,
danger knowing required what was guidelines the State and the economic
capability applicant ground is not a legislative
frustrate the intent of the State
Statutes.
CERTIORARI PREVIOUSLY GRANT-
ED; COURT OF APPEALS OPINION
VACATED; JUDGMENT THE OF DIS-
TRICT COURT REVERSED. WILSON, C.J., KAUGER, V.C.J.,
ALMA LAVENDER, SIMMS, HARGRAVE JJ., SUMMERS, concur. WATT, JJ.,
OPALA and dissent. O.S.1991, §§
3. 45 766-769. *2 Holtzclaw, Fagin, D. Pamela Sue
Arnold R. Amanda Mclnnis- Michael L. Mullins and Nixon, agent, Fagin Fagin, City, & enced insurance Claborn informed Appellee. misrepresen- Washington National about the policy application. tations on letter Berry, James W. W. Rhodes and James was dated Jr., Kerr, Irvine, Gutteridge Don J. Rhodes underwriting rules called *3 Able, City, Appellant. Oklahoma for and rеjection applicant automatic of an who had treated alcoholism within the five- HARGRAVE, Justice. year preceding application, interval the and Appeals, of Certiorari to Court consequently, Claborn was at informed IV, unpublished an Division to review order policy end of of 1989 March that his Appeals. the Court of The issues ad- of misrepresenta- rescinded result of his as a (1) matter is dressed whether: tions, premium and refunded. Claborn then sufficiently supports a Claborn’s evidence brought this action recover actual and contract, in claim of breach of of face tort, punitive damages in based on insurer’s Washington misrepre- National’s defense of trial, rescinding policy. bad faith in his At (2) sentation; trial a and court erred as a returned verdict for Claborn for submitting of matter law the bad faith $127,000.00 $110,- damages jury. claim the punitive damages. 000.00in appeal Appeals, On to the Court of SUMMARY FACTS AND OF court that there reasoned was evidence PROCEDURAL record from which the cоuld have found HISTORY Claborn on contract claim. The court This matter fi*oma arises out health insur- opined agent that the National ance existing could have examined the State by completed September on Mr. Claborn rider, policy which contained seizure thus policy replace 1988. This new was to Mr. alert- have bеen Claborn’s current with State problem ed to Clabom’s with alcoholism. Company. Farm Insurance When asked Appeals The Court of agent preceding years five misrepresen- hospital he had been to the or admitted tations was of not reasonable because alcoholism, treated for Claborn at testifiеd investigate, failure to thus Na- deposition making that when he was diligence tional did not use reasonable application he told the “not more.” discovering alcoholism. representative When contacted a phone, calling to Appeals The Court of also concluded that application, firm thе answers on the imposition liability tort inappropri- of questions. answered “no” to both These ate and the issue bad faith should not have as, years statements were not true the five jury. submitted The Court of preceding application, Claborn had been Appeals determined that a bad claim hospital admitted twice to for a legitimate could not lie there was a as dis- alcoholism, disorder related to and had three pute, clearly an had the times been treated for alcoholism. The in- right payment litigate any resist claim surance held with defense, since, to which there is a reasonable excluding Farm contained a coverage rider law, under Oklahoma an insurer has Nevertheless, for seizure disorders. Cla- to seek of a rescission health insurance negative to the ques- bom’s answers procured an containing tions on his resulted in the issu- single misrepresentation. The court held ance of health insurance which was damages proven that aсtual under the 1,1988. effective October $77,000.00 concluding contract action were $50,000.00 remaining that the dam- Claborn learned that of actual ages $110,000.00 he had oral With the cancer. advice and had to have basis brother-in-law, experi- assistance the tort claim.
1Q49
person making
BY
of which the
PROVIDED
tent condition
INFORMATION
FALSE
HEALTH INSUR-
FOR
has
or reason to
APPLICANT
POLICY,
CON-
ANCE
WHICH
know
a defense
does
constitute
OF ALCO-
CEALED HIS HISTORY
action on
Mut.
Mass.
AND
SEIZURES
Allen,
(Okl.1965);
HOL-RELATED
Farm-
ALCOHOLISM,
FOR
TREATMENT
Lemon,
ers
Banker’s
TO
AMOUNTED
MISREPRESENTA-
(1951).
P.2d 634
Okl.
ENTITLED THE INSUR-
TION AND
ER
A
OF THE
TO
RESCISSION
Where
evidence is
POLICY.
state
at
to either insured’s
of health
the time
application,
falsity
or
insured’s
evidence was
Uncontroverted
application process,
statements in the
or the
*4
decedent, Clabom, made mis-
trial that thе
insured,
properly
intent of
are
the
the issues
appli-
both at the time of the
representations
tendered to the
Brunson
resolution.
by
by
telephone
the
cation and when reached
Co., 547
v. Mid-Western
Ins.
P.2d 970
to confirm the
company
answers.
Life
Eastman,
(Okl.1976); Atlas
v.
regarded
prob-
misrepresentations
These
Life
(Okl.1957).
review, if
DIRECTIONS DISMISS. THE RIGHT LITI- TO
AN INSURER HAS KAUGER, V.C.J., LAVENDER, TO THE ANY CLAIM WHICH GATE SIMMS, HARGRAVE, A HAS REASONABLE SUMMERS and INSURER WATT, JJ., DEFENSE. concur. Law, only tort C.J.,
Under Oklahoma WILSON, by separate ALMA recognized A, J., connection opinion, part and OPAL concur сontract “[w]here breach part. dissent showing is a there clear HODGES, J., dissents. faith, unreasonably, in bad withholds Justice, WILSON, claim of insured.” payment ALMA Chief dissenting concurring part part: Atlantic Ins. 637 P.2d McCorkle Great (Okl.1981). Washington National respectfully from I must dissent the view *6 his claim rescinded denied majority company is of the that the insurance apрli on inaccuracies in the policy based con- entitled to rescission of let to which admitted cation properly upheld Appeals The Court of tract. 7, no bad dated 1989. There is ter $77,063.04 on verdict of the contract denial a claim is faith when the insurer’s claim, deny improvi- I would certiorari as so dispute legitimatе based on between ma- dently granted. agree I with both the Id. insurer the insured. Appeals jority opinion and the Court P.2d in Buzzard v. Farmers Ins. 824 improperly placed the bad-faith claim was 1105, (Okl.1991), 1106 this Court puni- the award of and that before litigate clearly insurer has to “[a]n was damages error. tive a reason any claim to which the has agent represented National’s rescind able defense.” to comparable was to Claborn based on the mate ed Mr. Claborn’s contract existing policy with State Clabom’s misrepresentations to rial However, agent never examined Farm. pro which he admitted. Such defense though Farm even the State These facts vidеd Oklahoma Statute.3 coverage. seeking replacement explicitly was cover made him uninsurable without a rider fact, policies comparable. not the two Washington Na ing the seizure disorder. Had the read State wishing did not in bad tional act that it an have discovered contained he would claim litigate this matter. As bad-faith whereby endorsement” State “exclusion trier of improperly placed before the was any not Farm would cover Claborn fact, punitive damages award of The existence vulsive or seizure disorders. error. prudent a clause would lead the of such diligence by selling an to exercise reasonable argues that Claborn also investigating insured’s did contain the which relying on the insured’s merely than pre-existing Farm rather same benefits as the State 3609, O.S.1991, § 3. 36 see note 1.
1052 456, (Okla.1991). Moreover, responses questionnaire. Had “where to a 459 oral any competent reasonably National exercised such reason- there is evidencе diligence, tending support jury, the verdict able it would discovered that was related to his not disturb the Claborn’s seizure disorder will he had thereon.” alcoholism for which been treated based Id. Because Further, years. previous five there is evidence on issue as within known of the alcoholism, misrepresentations it alleged treatment for would not have on the rea- turn, sonable, who, majority would I dissent insured Clabom not have must from the opinion’s State Farm existing holding allowed his the contract claim. lapse, gave litigation and the rise appeal before us would never have taken
place.
Washington National bases its defense alleged misrepresen
rescission on Claborn’s regarding
tations treatment for alcohol However, an “insurer
ism. where has infor put prudent mation which would have SOUTH WESTERN OKLAHOMA DE- possible person falsity on notice of AUTHORITY, VELOPMENT an Okla- inquiry which, caused an if car trust, public homa diligence, out ried with reasonable Oklahoma, rel., Depart- ex truth, have revealed the the insurer cannot Commerce, Plaintiffs-Appellees, ment of rely misrepresentation.” on the Hardy v. Am., 761, Prudential 763 P.2d (Utah 1988). WORKS, INC., Moreover, SULLIVAN ENGINE Scott action for “[a]n Spencer, individual, Sullivan, may an Robert predicated fraud not be on false state individual, Holder, an Tommie in- J. allegedly party ments when the defrauded dividual, Buchanan, individual, Max could ascertained truth with rea Roy Wayne Woodward, Slusher, diligence.” an individu- sonable Silver al, Defendants-Appellants. (Okla.1988), denied, P.2d 881 n. 8 cert. U.S. 110 S.Ct. L.Ed.2d 37 No. 80739. *7 (1989). Supreme Court of Oklahoma. reply brief,
admits had it known оf the rider for 23, 1996. Jan. disorder, it have investigated relying rather than exclusively on repre- the truthfulness of his concerning
sentations. Information the rider within National’s control. result,
As a because
failed to avail itself of information which was
within its control and have led reasonably diligent
prudent and
discover Claborn’s treatment for alco-
holism, the trial in the instant ease could concluded alleged misrepresenta- on Claborn’s was not “A
tions reasonable. verdict error, be will not reversed for support
if there is substantial evidence any theory of law.” Eversole v. Ass’n, Hosp. Founders 818 P.2d