Goodwin v. Old Republic Insurance Co.
828 P.2d 431
Okla.
1992
Check Treatment

*1 GOODWIN, Appellant, Ronald INSURANCE

OLD REPUBLIC

COMPANY, Appellee.

OLD REPUBLIC INSURANCE

COMPANY, Appellant, DONOVAN, Appellee.

Gerard K.

Nos.

Supreme Court of Oklahoma.

March Goff, City, appel-

Ben A. Oklahoma for lant, Ronald Goodwin. Fielden, Kessinger-Huhn, E.

Arlen Carol City, appellee/cross-appel- Oklahoma lant, Republic Ins. Co. III, City, F.

Charles Alden Oklahoma appellee, Gerard K. Donovan. KAUGER, Justice. dispositive impression first issue of is whether a workers’ subjected company

tion insurance wilful, liability in tort for a malicious faith refusal to and bad We assume workers’ award. compensation insurance that a subjected company wilful, malicious and bad faith tort *2 The com- anee claim. trial court sustained pay workers’ both refusal 18, award, the on March pensation ap- and hold that motions 1986. Goodwin support pealed. case do not facts of this faith.1 bad

I.

FACTS 15, 1983, appellant, ASSUME THAT A the WE WORKERS’ On December (Goodwin/employee/claim- COMPENSATION INSURANCE COM- Ronald Goodwin alleg- ant), petition in court PANY MAY BE SUBJECTED TO LIA- filed a district WILFUL, Republic Insur- BILITY IN ing appellant, TORT FOR MA- that the Old (Old had AND FAITH Republic/insurer), LICIOUS BAD Company ance REFUSAL com- TO PAY AN pay in faith failed a workers’ EMPLOYEE’S WORKERS’ bad con- pensation Although Goodwin COMPENSATION AWARD. award. Republic’s of his claims ceded that Old Goodwin asserts that he sue action, for the faith not the basis compensation the workers’ insurance carri orders, the the he that of contended faith er district court for bad refusal to success, the likelihood of and without a pay his award. The essence of his asser of once man- delay payment the awards the recovery tion is that of a workers’ record, spread of constituted bad date was compensation employer award from peti- Republic faith. Old filed a apart separate and from his to recov appellee, K. Dono- naming Gerard contract which the er on em (Donovan/insurer’s attorney/repre- van that, purchased has ployer for his benefit— sentative), party to Donovan the suit. effect, he has two distinct causes in the actions represented Republic had Old Republic that the action. Old insists Work court. before the Compensation provides the ers’ Act exclu payable on The award became due and remedy injuries arising sive 3, again on 1983.2 On June 8 and June employment relationship, whether di attorney in the work- June Goodwin’s exclusivity provision, indirect. rect or The requested pay- ers’ cause perti O.S.Supp.1984 provides Repub- notify did Old ment. Donovan part: nent payable lic that the award was due and prescribed in liability “The Section 11 of eigh- day, 1983. next until June place title shall and be exclusive became days teen after Goodwin’s award employer liability of all other ... payable, Republic due issued Good- and services, injury, for such loss death and in- payments win a check for accrued (Emphasis supplied.) ...” terest.3 exclusivity It should noted that respectively, January On 21 and relates to provision statute Republic and Old filed motions Donovan employer —not summary judgment. They argued that: insurer. 1) complaints the ex- fell within Goodwin’s duty good An jurisdiction implied-in-law of the Workers’ Com- insurer’s clusive Court; 2) dealing to all pensation types the facts faith and fair extends companies poli- cause of and insurance presented support of insurance would However, duty to faith an insur- cies.4 the insurer’s deal action for bad refusal to Goodwin, figuring due are insufficient amount Old Re- Just as the facts finding part public interest. This error support insurer, of bad on the miscalculated the faith paid Republic they of action corrected when Old addition- will not establish a cause was attorney distress. al fees and interest assessed infliction of emotional for intentional See, Still, Court on the motion to Workers' Wilson (Okla.1991); Corp., lump League to a sum. Breeden v. Serv. commute 4. Roach v. Atlas 989); (Okla.1 Rodgers Bank, 619(A)(6). v. Tecumseh Title 36 adopt It approve limited. “We the rule that an fairly good act in implied duty fairly insurer has an to deal every party entitled does not extend good and act faith with its insured and There proceeds. from insurance duty gives that the violation of this rise statutory contractual or a must be either a *3 consequen- to an action tort for which and the relationship the insurer between and, case, proper punitive, tial a dam- faith claim before asserting the bad party may sought. ages be We do not hold duty arises.5 litigates that an insurer who resists and exists third-party beneficiary contract by a claim made its insured does so at its policy are proceeds of an insurance if the peril that if it loses the suit or suffers a 1910, 15 persons.6 to third Since payable larger judgment against it for a amount that “A contract 29 has held O.S.1981 § payment, it than it had offered will be for the benefit of a third expressly made duty its to act held to have breached any him time person may enforced at be fairly good and in faith and thus liable be rescind it.”7 parties thereto before in tort. beneficiary The of a workers’ recognize disagree- there can We be meets the criteria for insurance contract insurer and insured on a ments between Legisla- right, because the assertion of the in- variety of matters such as insurable provided 85 O.S.1981 specifically ture loss, terest, coverage, extent of cause of third-party are benefi- 65.3 that workers § loss, policy or breach of condi- amount policy employer’s liability ciaries of the judicial tions. to a forum is not Resort provides: It with the insurer.8 dealing faith or unfair on the per se bad of insurance issued “Every contract regardless of the out- part of the insurer purpose of carrier for the an insurance Rather, liability of the suit. tort come against liability un- insuring employer imposed only where there is a be Compensation Act shall der the Workers’ showing that the insurer unreason- clear a con- conclusively presumed to be faith, withholds ably, and bad every of each and tract for the benefit of the claim of its insured.”9 upon premiums insurance person whom casualty acknowledged that insur- We collected, employment paid, or whose subject to a bad faith ance carriers or used in determination is considered v. American Home Christian upon premium collected the amount (Okla.1978) Co., P.2d 899 577 Assurance payment of benefits policy for the such O.S.1981 [disability insurance—36 Compensa- provided by the Workers’ as 707(1)]; Atlantic v. Great McCorkle § Act tion ...” (Okla.1981) in- Co., 583 Ins. 637 P.2d [fire 707(11)]; Tim- Assur- v. American Home O.S.1981 Christian surance—36 § Co., 899, (Okl.1978), 653 P.2d 907 Co., Royal 904 Ins. 577 P.2d mons v. Globe ance pur- O.S.1981 insurance—36 recognized of an insured [aircraft Co., 707(11)]; Atlas Ins. against its Roach v. cause of action sue a bad faith § Life (Okla.1989) insurance—36 imposi- P.2d 158 rule for 769 [life and described the 707(1) O.S.1981 liability: § ].10 tion of bad employer and 1223, policy between the (Okla.1988); insurance v. Great McCorkle P.2d 1226 Brooks, P.2d (Okla.1981). 755 Co., Ins. Fund v. the insurer. State 637 P.2d 588 Atlantic Ins. (Okla.1988). 657 Amick, P.2d 364 Co. v. 5. Allstate Ins. the loss of an not found that 9. We have Co., (Okla.1984); Royal Ins. Globe Timmons impose itself to is sufficient in (Okla.1982). 911-12 infra, discussion, 435-436, pp. See faith. Co., note infra. 611 P.2d Zahn v. General Ins. 6. (Okla.1980); Metropolitan Ins. coverages within more fall insurance 10. Certain Co., definition Title 36. One definition in one than any coverage other as to not exclude does § Title 15 O.S.1981 which definition of within the insurance kind of reasonably is includable. coverage likewise recognized previously a claimant’s 8. We have statutory right 36 O.S.1981 enforce a workers' intentional, acts are By definition wilful In Roach v. Atlas Life purview (Okla.1989), of the we found that a bene- not within the O.S.Supp. Title ficiary a contract met both Act.13 life insurance 3(7) relationship injuries statutory defines the covered the contractual 1988 § necessary injuries arising of action. in the to maintain1" cause out of and accidental in Roach seeking recovery was a 12 nor employment. course of Neither § con- beneficiary 3(7) precludes named an intentional tort claim. party beneficiary entitled attempting tract to recover for Goodwin ben- seeking made for his/her physical impairment; he to enforce contract his pursuant 29. We rather, efit employer; to recover but recognition that an affirmed Christian’s injuries he seeks because *4 duty good of faith implied-in-law insurer’s alleged failure of the insurer’s intentional types of dealing fair extends to all and timely pay compensation in a to award policies, and companies insurance insurance provides manner. Section 12 an exclusive the benefi- and we held that third remedy type for of claim—work-related one a claim. ciary pursue could bad faith i.e., liability employer. injuries separate apart faith claim is falls compensation Workers’ insurance relationship, it arises from work of cas- 36 707’s definition within O.S.1981 § only has against an insurer after there ualty provides that casual- insurance which against employer. been award ty insurance includes workers’ liability insurance. employers’ tion and pur- is compensation insurance Workers’ are not ex- compensation insurers employer for the benefit chased empted provisions from of the Oklahoma pay employees. of a to its Failure carrier Code), (Insurance 36 Insurance Code employer- promptly impacts a claim seq.11 O.S.Supp.1983 101 et The Unfair § relationship. employer pur- The employee (Claims Act Claims Settlement Practices compensation to workers’ insurance chases Act), 1220 O.S.Supp.1985 Practices 36 § Employers employees. its provide care for cas- property in 1222 that no or provides § rely upon the work- employees as well engage claim ualty insurer shall in unfair for compensation system protection for ers’ practices, and it an un- settlement defines injuries. employer, The the in- on-the-job practice claim settlement as: fair in the employee employees and other jured in to attempting good Not faith “... workplace expect payment the event of fair, equitable prompt, effectuate Otherwise, morale job-related injury. in which settlements of claims submitted suffers, impacts pro- workplace which reasonably liability has become employee, by a statute ductivity. The who clear....”12 beneficiary to the third-party made a is Act 1227 the Claims Practices insurance, Section is in the provisions: provides that its expect insured and same class as an unless payment of his/her claim specifically prompt shall to all claims apply “... faith asserts a basis provid- good the insurer arising policies insurance pay contesting promptly it. Failure to ing coverage.” liability belief facts which O.S.Supp.1988 or information § 11. Title 36 unconscien- the transaction would render statute, workers' 12. Pursuant tious.” duty charged with to deal insurers good opposite of bad is or antitheses Good faith “good is not defined faith. term faith” The Kooyman Farm Bureau Mut. Ins. faith. However, Act. whenev- the Claims Practices 1982); Grange (Iowa Tyler N.W.2d statute, any is the definition er a term defined Ass'n, Wash.App. phrase applicable when- the same word or (1970). in 25 it "Good faith” is defined ever occurs. O.S.1981 9: Edwards, 13. Macklanburg-Duncan Co. v. in an "Good consists honest intention (Okla.1957); Clarksburg Paper Co. taking any ad- unconscientious abstain from vantage 425, 427 Roper, v. (1946). 196 Okla. another, through even the forms law, together with an absence technicalities ciary to compensation insur- enforce the terms of a result in the workers’ contract statutorily more than the party’s indisput- er’s made for the benefit. It is Again, quote set recoveries. able that 85 O.S.1981 65.3 declares that coverage Christian: is secured for the bene- in- fit “Th(e) statutory duty imposed upon of the worker and that the worker is the companies pay party beneficiary claims immedi- policy. surance under the If ately, recognizes part that a employee injured by substantial an insurer’s bad right purchased by an insured is of the faith-intentional failure to benefits un- policy to receive the benefits award, employee der an has a common promptly. delay precip- Unwarranted action in law tort under the doc- precise hardship the itates the economic trine. sought by purchase of insured to avoid common law remains full force in policy. Oklahoma, explicitly pro- unless a statute (Threatened refusals and actual bad faith contrary.16 vides to the Title 25 O.S.1981 payments by an insurance carri- to make requires in derogation that statutes er) constitutes a tortious interference liberally the common law be construed with protected property interest of its with effecting objects their view and to damages may be recov- insured which *5 promote justice. may pre- This Court not compensate to all detriment ered person injured pursuing clude an from the therefrom, proximately resulting includ- recognized remedy wrong of a in the ab- ing economic loss as as emotional well contrary legislative sence of intent.17 It resulting from the or distress conduct O.S.Supp.1984 appears that 85 12 does the economic caused the from losses injured employee not bar maintain- conduct, and, case, proper punitive in a against ing an action the insurer in district damages.” pay timely court refusal for bad faith penalty suspen- did not find that the of We Assuming award. authority preclud- sion of the certificate of may there be a cause of action for bad recovery ed for the bad faith tort Chris- pay timely refusal to a workers’ com- faith tian nor should it do so here. award, pensation the facts here will not undisputed It is that intentional acts are support the faith cause of action.18 bad statutorily excluded under the Workers’ Compensation undisputed Act.14 It is that II. pay the bad faith refusal to an insurance THE PRESENTED DO NOT may contract under its terms an inten- FACTS OF FOR undisputed tional tort.15 It is that 15 SUPPORT CAUSE ACTION O.S. PAY THE authorizes a third benefi- BAD FAITH REFUSAL TO 1981 29§ 3(7); (Okla.1980), (The Macklanburg- "dog O.S.Supp.1990 bite statute” does not 14. Title 85 Edwards, 13, supra; prevent judgment’s Co. v. see note reversal for a trial court’s Duncan negli- Clarksburg Paper Roper, su- also to instruct on common law Co. v. see note failure Graves, pra. gence.); Adoption In re of (Uniform (Okla.1971) Adoption Act did not abrogate pre-existing, law the common Co., Christian v. American Home Assurance parents to an natural to revoke their consent (Okla.1977). 577 P.2d practiced by adoptive adoption for fraud the parents.). 2; Exploration Title 12 O.S.1981 Ricks v. Co., (Okla.1984). The com- 695 P.2d undisputed that the bad faith refusal to 17. It is system may of remedies continue side mon law pay its terms an insurance contract under legislative by side with a statute that evinces no tort. Christian v. American be an intentional supplant it. State Mut. Assurance intent to supra. How- Home see note Assurance (Okla.1985) Hampton, Co. v. 696 P.2d ever, will not it should be noted that Christian (Oklahoma’s "slayer preclude statute” does not Peabody employer here. Coal is extend to the application which al- common law rule protection. in a entitled to subclass lows, following acquittal, in a civil action beneficiary’s disqualification upon proof Cameron, evidence.); See, preponderance Hinson v. crime of the Hagler, Hood v. 552-53 SUMMERS, JJ., BENE- DOOLIN and concur WORKERS’ COMPENSATION specially. FITS. concedes that Although Goodwin HODGES, V.C.J., and LAVENDER of his claims not Republic’s Old JJ., II, SIMMS, part concur result action, he con for the

the basis part dissent from I. orders, of the without appeal tends that the HARGRAVE, J., part, concurs in success, delay in and the a likelihood part. dissents once mandate was payment the awards record, bad faith. spread of constituted DOOLIN, Justice, concurring specially. of the facts Republic asserts that none a cause I specially are sufficient sustain to address issues presented write agree. jurisdiction faith. We of the courts such cases of action for bad expand majority’s findings and to the record We cannot conclude from intentional inflic- Goodwin’s proceedings were not tion of emotional distress. ground.19 brought With- on a reasonable evidentiary litigation support, out argues the court not Insurer district did give rise to a bad faith alone does jurisdiction to address the issues have Liability for the bad faith cause of action. Compensa- the Workers’ case because imposed only pay a refusal to claim jurisdiction has exclusive over Court showing if a clear insurer there is the matter. This assessment incorrect. faith, unreasonably, in bad withholds action, although alleged This cause Here, of the claim.20 handling arise from claims under made an effort Act, *6 eighteen days after it became due. award resulting from in- damages a work-related do doubt that the lack of Although we not damages resulting jury, alleged but assistance caused stress Good- financial infliction of from the tort of intentional Republic’s marriage, ac- win and alleged cause emotional distress. having quali- tions fall short of actionable not until Goodwinhad action did arise after a ty. assume that workers’ We received all the made his claim and had subjected company may tion be that provided the Act. After remedies wilful, in for a malicious to tort proceedings recovery, and in the after final, faith refusal to and bad Compensation Court were Workers’ compensation hold that award and sought damages for Goodwin to recover support case do not the facts this following which he claims occurred events action for bad faith.21 which, alleges, he the final award and to infliction of emotion- amount intentional

AFFIRMED. al distress. J„ jurisdiction OPALA, C.J., WILSON, court has ALMA Because district tort,1 to of action in Goodwin hear causes concur. Co., only liability may imposed v. American Home Assurance where 19.Tort 905, supra. showing see note 15 at that unrea- a clear the insurer there is faith, sonably, and in bad withholds Co., Farley v. Ins. 576 So.2d 158-59 CNA of its Christian v. American the claim insured. Serv., Inc., (Ala.1991); 113 v. Scott Wetzel Wolf Co., 15, supra; note Title 85 Assurance see Home 665, 203, (1989); P.2d 209 Unruh Wash.2d 782 con- 30. Goodwin’s brief chief 815, 616, Exch., Cal.Rptr. Ins. 7 Cal.3d 102 Truck quotation a from an insur- a from letter tains 1063, (1972); Bowen v. Aetna P.2d indicating adjuster not that she did feel the ance (Fla.Dist. Co., Casualty 512 So.2d &Life However, appeals would result in reversals. also, Ct.App.1987). Denisen Milwaukee See appear copy quoted letter does not (Minn.Ct. Co., 360 N.W.2d Mut. App.1985). relief re- One seeks corrective is record. sponsible who for, by, the contents of and bound Constitution, Ben- Snyder v. Art. review. Smith record Oklahoma Fabrication, City Bank & Trust National Welding & nett v. (Okl.1975). in the whether filing outrageous, in not this was correct conduct it is for Court, jury, proper supervision which court, to determine whether jurisdiction.2 limited con- court of duct is so outrageous and extreme as to Though correctly filed the district permit recovery.6 discharge But of its correctly court this tort action was also duties the trial court must make an initial subjected adjudication summary based whether, determination as to as a matter of trial court’s evaluation of the case law, severe emotional distress can be as a of law. Goodwin he is matter asserts found.7 damages entitled to because insurer filed According Second, to Restatement Sec- an appeal of his award with permitting recovery the rule only success, anticipation no reasonable applies where emotional distress has fact prosecuting that without even occurred, and where it is severe. Proof of bothering nothing to file a was brief less outrageous therefore, conduct alone is design by than to inflict emotion- recovery.8 sufficient to allow I suffering upon al him. would find more, allegations, this set without does alleged simply Goodwin has suffi- not make out the elements of tort of support submitting cient facts case intentional infliction of distress. emotional jury to a for reconsideration. Reasonable minds could insurer’s not differ con- League In Breeden v. Services Corp.,3 outrageous- duct did not rise to the level of adopted the Restatement Court Sec- needed prove ness a cause of action. To approach to the tort of intentional ond’s might unintentionally hold otherwise en- Breeden of emotional distress.4 infliction dow the claimant’s bar role further established the of courts and weapon might cases with a which be used juries in such cases. in- the first gain advantage in their unfair contests stance, must the court determine whether compensation insurers, with and this we do “may reasonably defendant’s conduct not wish to do. regarded and outrageous as so extreme permit recovery, or whether it is neces- sarily SUMMERS, Justice, concurring so.”5 specially. *7 the facts recognized

Where before the In we Christian1 court, persons may bring against an insured an action reasonable differ as to its actor, O.S.1981, against 2. 1.2. F. arouse his resentment exclaim, "outrageous!” him ... lead Services, League supra, at See Breeden v. (Okl.1978). 3. 575 P.2d 1374 granting trial court’s where court held summary judgment for defendant-creditor (Second), 4. Section Restatement of Torts This, proper. despite the fact that was defen- part: provides in agent allegedly by dant’s had harassed debtor Outrageous Causing Conduct Emotional 46. her, saying to "You damned deadbeat. You Distress you And are a deadbeat.” Goddamed liar. (1) outrageous who extreme and One 5. Id. at 1377. intentionally recklessly or se- causes conduct subject distress to another is vere emotional 6. Id. distress, liability for such emotional and if it, bodily to the other from for harm results Id. bodily harm. such provides part: that section d. to Comment analysis For a of the tort of intention detailed Liability only has been found where the ... distress, Eddy see al v. infliction of emotional character, outrageous has been so conduct Brown, (Okl.1986); Chandler v. Den P.2d degree, go beyond as to and so extreme in ton, (Okl.1987); Chapman, Dean v. 741 P.2d 855 grounds decency, regard- possible and to be (Okl.1976); Munley I.S.C. 257 House, atrocious, utterly intolerable in a ed as Inc., (Okl.1978). P.2d 1336 Financial community. Generally, the case is civilized Assurance, recitation of Home one in which the the facts to the v. American average community member of the would to honor failure bad-faith ac- contract. In Roach2 insurance named, party third bene-

knowledged like

ficiary to an contract had com- behavior

recourse bad-faith part. 65.3

pany’s employees

legislature decreed that covered Compensation Act are

by the Workers’ employer’s of their beneficiaries compensation insurance contracts. geometrician knows as the

Just

shape changed with- triangle of a cannot one or altering length of more

out sides, legal proposi- three

its so too these way as to make

tions interlock in such majority’s assumption unassailable.

Only by disturbing our either Christian or

Roach, legislative alteration of 65.3, logically can a result different

reached. MASSONGILL, Appellee,

Ben McDEVITT,

Daniel B. Defendant.

Appeal of ENGINEERING PROGRESS ENTERPRISE,

and CONSULTING Corporation.

INC., an Oklahoma

No. Oklahoma, Appeals

Court No. 1.

Division 14, 1989.

Feb.

Rehearing April Denied April

Certiorari Denied Perkins, Jr., Tulsa, appel-

Howard D. lee. v. Atlas P.2d 158

2. Roach