Olgа HALL, Plaintiff/Appellee/Counter-Appellant, v. GLOBE LIFE AND ACCIDENT INSURANCE COMPANY, Defendant/Appellant/Counter-Appellee.
No. 88579.
Court of Civil Appeals of Oklahoma, Division No. 3.
June 2, 1998.
As Corrected on Denial of Rehearing July 31, 1998.
1998 OK CIV APP 161, 1263
Certiorari Denied Oct. 27, 1998.
¶ 11 Likewise, in Arkoma, supra, the Supreme Court referred to Oliver and Catlin Aviation v. Equilease Corp., 1981 OK 13, 626 P.2d 857, and stated that it had never “rejected the notion that the attorney fee should bear some reasonable relationship to the amount in controversy.” 849 P.2d at 394. Hall‘s attempt to apply the literal language of Oliver would expressly do exactly that. Because we hold that the trial court did not abuse its discretion in reducing the lodestar amount because of the amount involved, the relatively modest recovery, and failure to present sufficient evidence to submit a punitive damages instruction to the jury, it would be difficult, albeit not impossible, to find that the diminished lodestar should be enhanced. In a case more recent than Brashier, the Oklahoma Supreme Court, citing Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1545, 79 L.Ed.2d 891 (1984), stated that the trial court “may justify an upward adjustment only in the rare case where the fee applicant offers specific evidence to show that the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was ‘exceptional.’” State ex rel. Oklahoma Bar Association v. Weeks, 1997 OK 131, ¶ 11, — P.2d —.*
¶ 12 For the reasons stated, we find that the trial court did not abuse its discretion when it awarded Hall $20,000 in attorney fees.
AFFIRMED.
HANSEN and ADAMS, JJ., concur.
John T. Edwards, Shannon L. Edwards, Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, Oklahoma, for Defendant/Appellant/Counter-Appellee.
OPINION
BUETTNER, Presiding Judge.
¶ 1 Olga Hall sued Globe Life Accident Insurance Company for the proceeds of a life insurance policy she purchased on her husband and for damages she allegedly suffered because of Globe Life‘s bad faith in declining to pay thе proceeds. Upon investigation of the claim, Globe Life determined that Mrs. Hall answered the fifth question incorrectly, that is, whether Mr. Hall had been treated for cirrhosis within the twelve months preceding the applicаtion. After trial, the court entered judgment on the jury‘s verdict awarding Mrs. Hall the amount of the insurance proceeds, $22,222, plus $3,000 in damages for bad faith. The court did not instruct the jury on punitive damages. We affirm.
¶ 2 Globe Life contends that thе court erred in failing to grant it judgment on Hall‘s claim that it breached its duty of good faith and fair dealing. It also asserts that the court erred in allowing Hall to call an expert witness to testify about Globe‘s alleged bad faith investigаtion. Finally, Globe argues that the evidence was insufficient to support the jury‘s verdict in favor of Hall on her claim for breach of covenant of good faith and fair dealing. For her part, counter-appellаnt Hall complains that the court erred in failing to submit the issue of punitive damages to the jury.
¶ 3 Mrs. Hall applied for the life insurance policy December 29, 1992 in the amount
¶ 4 The pertinent time for determining whether an insurance company declined, in bad faith, to pay proceеds is at the time it is asked to pay, not at the time of application for the policy. “In order to determine whether Principal [insurance company] acted in good faith in denying the claim, we must evaluate Principal‘s actions in light of the facts Principal knew or should have known at the time plaintiff requested the company to perform its contractual obligation.” Oulds v. Principal Mutual Life Insurance Co., 6 F.3d 1431, 1437 (10th Cir.1993)(interpreting Oklahoma law)(citing Conti v. Republic Underwriters Ins. Co., 782 P.2d 1357, 1362 (Okla.1989) and Buzzard v. McDanel, 736 P.2d 157, 159 (Okla.1987)). An inadequate investigation by the insurance company may give rise to an inference of bad faith, requiring the question to be determined by a jury. Id. at 1441, citing McCoy v. Oklahoma Farm Bureau Mutual Insurance Co., 841 P.2d 568 (Okla.1992).
¶ 5 It was undisputed that Hall informed Globe Life that her husband had chronic hepatitis. Globe Life had some evidence it believed showed cirrhosis within the рreceding twelve months.2 Dr. Hall testified in his deposition, however, that his notation “cirrhosis non A or B” was merely a shorthand for liver disease and that he did not know whether Mr. Hall had cirrhosis in September 1992. Further, Mrs. Hall‘s expert formed the оpinion that Globe Life did not have sufficient information at the time it made its determination and did not do a sufficient investigation before making its decision to decline payment of the proceeds. In considering the evidеnce in the light most favorable to the nonmoving party, the court did not err in submitting the question of bad faith to the jury. We follow the rule stated in McCorkle v. Great Atlantic Insurance Co., 1981 OK 128, 637 P.2d 583, 587:
“... the essence of the intentional tort of bad faith with regard to the insurance industry is the insurer‘s unreаsonable, bad-faith conduct, including the unjustified withholding of payment due under a policy, and if there is conflicting evidence from which different inferences may be drawn regarding the reasonableness of insurer‘s conduct, then what is reasonable is always a question to be determined by the trier of fact by a consideration of the circumstances in each case.”
¶ 6 In this case, the denial of payment was based upon an alleged misrepresentation in the application by Mrs. Hall.3 As Mrs. Hall argues in her brief, the statement in the application is a representation based upon the knowledge of the applicant, not a warranty that the insured does not, in fact, have the specified illnesses. Globe Life directed its investigation into determining whether Mr. Hall in fact had cirrhosis more than 12 months prior to the application. Once Globe Life had a reasonable basis to believe Mr. Hall had been treated for cirrhosis during the relevant period, the critical element became Mrs. Hall‘s knowledge of that fact. The jury could have concluded that Globe Life conducted no investigation of that criti-
¶ 7 Next we consider Globe Life‘s proposition that the court erred in admitting Hall‘s expert witness on the subject of insurance investigations. First, Globe Life complains that the particular witness was not qualified to testify as an expert and that in any event, expert testimony on the issue of bad faith invеstigation was irrelevant and not required to assist the trier of fact.
¶ 8 We do not find that the trial court abused its discretion in qualifying Mr. Hammond as an expert.6 Further, in this case, his testimony was arguably helpful to the jury. The central issue concerning the bad faith claim pivoted on the adequacy of the investigation. The expert‘s testimony was relevant to the matter and potentially helpful to the jury. We find no error in the admission of the expert‘s testimony.
¶ 9 Finally, Globe Life asserts that the evidence was insufficient to support the jury verdict on the claim of bad faith. We defer greatly to a jury verdict and “where there is any competent evidеnce rea-
sonably tending to support the verdict of the jury, this Court will not disturb the verdict and judgment based thereon.” Eversole v. Oklahoma Hospital Founders, 1991 OK 80, 818 P.2d 456, 459 (citing Walker v. St. Louis-San Francisco Ry. Co., 646 P.2d 593, 597 (Okla.1982).) As we have already stated, we have reviewed the record. There is sufficient competent evidencе to support the jury‘s verdict.
¶ 10 Now we address Hall‘s complaint that the trial judge erroneously failed to submit the issue of punitive damages to the jury. The Oklahoma Supreme Court has said that the “availability of a punitive damagе award in a bad faith case is not automatic, but rather is governed by the standard applicable in other tort cases.” The plaintiff must show that the defendant acted with oppression, malice, fraud or gross negligence or wantonness. Buzzard v. Farmers Ins. Co., Inc., 1991 OK —, 824 P.2d 1105, 1114. We have alluded to our assessment that Globe Life believed it had an arguably legitimate reason to deny Hall‘s claim. When there is no evidence to show that the “actions were tainted by oppression, fraud, malice or gross negligence there was no basis for the submission of the punitive damage issue to the jury.” McLaughlin v. National Benefit Life Insurance Company, 1988 OK 41, 772 P.2d 383, 389. “Even where there is evidence to support the recovery of actual damages in a bad faith аction against an insurer, submission of the issue of punitive damages to a jury may be improper.” Willis v. Mid-
¶ 11 For these reasons, we affirm the judgment entered on the jury‘s verdict.
AFFIRMED.
ADAMS, J., concurs.
HANSEN, J., concurring in part and dissenting in part:
I concur in part and dissent in part. I would have submitted the issue of punitive damages to the jury.