Massey v. Farmers Insurance Group

negligence performance of that duty, instruction no. 9 is a facial misstate- applicable Reading

ment of the law. together, instructions instruction no. 9 misleading

could have been Therefore,

jury. we hold that instruction fundamental,

no. 9 constitutes reversible

error. The of the trial court is

REVERSED and the cause is REMANDED

for a new trial.

OPALA, C.J., HODGES, V.C.J., and

LAVENDER, HARGRAVE, KAUGER JJ.,

SUMMERS, concur.

SIMMS, J., dissents. Dorothy Massey,

Harold MASSEY and wife, Appellees/Cross-

husband and

Appellants, GROUP,

FARMERS INSURANCE dba Exchange/Truck

Truck Insurance Un- Association, Appel-

derwriters

lant/Cross-Appellee.

No. 75279.

Supreme Court of Oklahoma.

June 1992.

As Corrected June

Rehearing Sept. Denied experts.

appointed This clause reads as follows: “Appraisal. In case this the insured and Company fail agree shall to as to the loss, actual cash value or amount of either, then, on the written demand competent shall select a disin- each and appraiser notify terested and the other of appraiser twenty selected within days appraisers of such demand. The competent shall first select a and disin- umpire; failing terested and for fifteen then, upon days agree umpire, such request Company, of the insured or umpire by judge shall such be selected record of a court of in the state which property covered is located. loss, praisers appraise shall then stat- separately ing actual cash and loss value item, and, agree, failing to each shall differences, their the um- only, submit itemized, pire. writing, An award so Company two when filed with this determine the shall amount of actual appraiser cash value loss. Each paid by party selecting shall be him expenses umpire and the Brittingham, L. D. Has- Galen Walter parties paid by equally.” be Glass, kins, Atkinson, Thomas, Michael P. O.S.1981, 4803(G). Boudreaux, Atkinson, Haskins, Nellis & home, damaged After a fire their Tulsa, appellees, cross-appellants. for Masseys made claim Farmers under Williams, Clark, Jr., Roger R. Joseph F. an policy. could not reach Earl, Williams, Clark, Baker, Howard, & loss, agreement upon the P.A., Tulsa, Percival, Heath, Culp, F. John Masseys against filed and the an action Sushnik, Percival, Percival & Oklahoma in Atoka County Farmers District Court. City, appellant, cross-appellee. provi- Farmers then invoked the sion, parties appointed appraisers and both SIMMS, Justice. figured repair. estimate for Question Unit- Certified of Law from the an appoint Farmers moved the court Tenth Appeals ed States Court clause, umpire pursuant Circuit. sug- appointed local and the builder Appellees, Dorothy Massey, Harold and gested by appraiser Farmers’ and attor- purchased policy a fire insurance on their umpire surveyed property neys. The appellant, Insurance home from reviewed the recommendations of Ex- Group d/b/a Truck Insurance determining damage appraisers to be change/Truck Association Underwriters $49,146.00. repairable for (Farmers). policy conformed to the statutory requirements supplemental A record and a filed affida- of a standard umpire attempted 36 O.S. indicate that insurance mandated vit per- appraisers each of the to obtain and contained a clause contact information, though he mitting the amount deter- further detailed of loss property by such information from Farmers’ mined received Massey’s interpret appraisal portion appraiser, he could not reach of it. How ever, appraiser. appraiser ap- A letter clauses have been a pointed they agreed part policies Farmers shows that standard fire insurance umpire’s with the determination. It is un- years. Appala over one well hundred clear whether the award was filed with Corp., chian Ins. Co. v. Rivcom 130 Cal. provi- per requirement 818, (1982) App.3d Cal.Rptr. (citing 182 11 sion, however, apparently it was sent to the Dry-Dock Old Saucelito Land & Co. v. Masseys district file a court. did not Co., 66 Commercial Union Assurance Rather, objection formal to the award. Furthermore, 253, (1884)). Cal. 5 P. 232 they discharged attorney their and filed a approved appraisal this Court has of such ;pro appoint- Motion to Reconsider the se provisions in fire insurance contracts since umpire. They ment of the then retained Home Ins. New York v. Co. of counsel, County new dismissed the Atoka Ballard, (1912); 32 124 Okla. P. 316 prejudice, action without and filed a new Rochester, Rochester German Ins. Co. of policy action on the as well as a bad faith Rodenhouse, N.Y. v. 36 Okla. 128 P. claim in the United States District Court (1912). 508 for the Eastern District of Oklahoma. The appraisal provi We construed the objection federal suit to trial went over the Fidelity-Phenix sion of 4803 in Fire Ins. Farmers, and the returned a verdict Penick, Co. New York v. 401 P.2d 514 $4,000,000.00 Masseys exceeding (Okla.1965), though we did not deter actual, consequential punitive dam- preclusive mine the effect of ages. awards, we did discuss the effect of an appeal On to the United Court of States calling insurer for admit without Circuit, Appeals Tenth Farmers as- ting liability. We held that the umpire’s damage appraisal serted the clause of con 4803 does not constitute a preclusive damages. reviewing In as to precedent maintaining dition an action assertion, the Tenth Circuit Court de- insurer, making on a where the termined that it contained an issue not ad- appraisal, right demand for an reserves the dressed the courts of Oklahoma and liability. More following question pur- certified the of law over, liability by denial of an insurer Ques- suant to the Uniform Certification waives the of the .insurer to invoke Act, 1981, 1601, tions of Law 20 O.S. et appraisal provision. Fire Concordia seq.: Barkett, Ins. Co. Milwaukee v. 110 law, pre- is the “Under Oklahoma what Okla. 236 P. 890 court-appointed clusive effect of a um- holding support majori This finds pire’s damage appraisal under a statuto- concerning ty appraisal provisions, view in rily-mandated provision a fire insur- cluding generally recognized rule that insured, ance where the as of appraisal provisions permit appraisers or right, prejudice dismisses an ini- without umpires issue, wit, to determine one challenging the um- tial lawsuit without damage property. amount of to the 14 G. and, thereafter, pire’s appraisal institutes Couch, 50:54, (2d Insurance at ed. subsequent on the same cause lawsuit 1982); Liverpool, Hamilton v. London & of action another court?” Co., Globe Ins. U.S. 10 S.Ct. umpire’s damage We hold that the (1890); Casualty 34 L.Ed. 419 Indem. pursuant poli made Yother, (Ala.1983); Exch. v. 439 So.2d 77 O.S.1981, cy mandated Co., Hanson v. Commercial Union Ins. preclusive 4803 has no effect issues (Ct.App.1986); 150 Ariz. 723 P.2d 101 litigated by raised and who did Sharma, Ins. Am. v. Co. Safeco apprais not enter make demand to into (1984); Cal.App.3d Cal.Rptr. process. al Wright, Fire St. Paul & Marine Co. (1981); legislature enacted 4803 in 97 Nev. 629 P.2d 1202 Elberon Co., Bathing and this Court has had little Co. v. Ambassador Ins. (1935); 389 A.2d 439 In re Delmar 43 P.2d 451 Fire N.J. Camden 60, 127 N.E.2d 808 Walker, Box 309 N.Y. Ins. Ass’n v. 111 Okl. 238 P. Murray, Aetna Ins. Co. v. (10th Cir.1933). F.2d majority view also concludes that although appraisal generally awards can However, these cases concerned were determine the of a loss and do cause with whether clause was a cause of action on the discharge binding parties on the to the contract and policy, they are as to the conclusive long appraisal pro- were written before the damages, and a amount of confirmed mandatory vision became effect as a award has same words, other those contracts were entered Couch, a civil action. G. into both without mandate 50:55, (2d 1982); 44 Insurance at 205 ed. Legislature apprais- from the to include an Am.Jur.2d, Insurance clause, approved al and this Court of the C.J.S., (1946); Hanson, Insurance part clause as a of that contract. The America, supra; supra; Ins. Co. Safeco significant ap- difference those between Filsinger, Brethren Mut. Ins. Co. v. praisal provisions and the one before us Md.App. 458 A.2d 880 Patriot imposed upon now is that the latter is both ic Am. Hall Ass’n v. Hart Order Sons of statute, by the insurer and the insured Co., Fire Ins. 305 Pa. 157 A. 259 ford party negotiate neither can its inclusion or (1931); Bainter v. United Pac. Ins. Moreover, party exclusion. when one de- Wash.App. The 748 P.2d 260 appraisal process begin, mands that the the award in the case at bar was not con party compelled other is to submit to it by the state district court. firmed they whether want to or not. joining majority jurisdictions, In the recognized this Court that awards made significant This distinction was to the appraisal under the clauses of insurance Oregon Supreme they Court when consid- are conclusive as to the amount contracts ered a almost identical to the one Jester, 37 Okla. of loss. Aetna Ins. Co. v. Molodyh before this Court. v. Truck 413, 132 P. 130 After an award was (1987), Exch., 304 Or. 744 P.2d 992 made, plaintiff objected to it on several held, Penick, the court as this Court did in grounds brought poli an action on the supra, statutorily-mandated apprais- that a cy. jury appraisal The found that the was provision precedent a condition al is not by ap the misconduct of the invalidated Thus, litigation. the statute does not re- review, praisers. held as follows: On we quire compliance provision with the or- appraisal fairly has been “Where an der to a claim. court further accordance with the law conducted in appraisal process the is de- held that once finding the the and the terms of by parties, proce- manded one of the the upon binding the is the appraisers dure of the statute and becomes parties, and the insured cannot disre- Hence, mandatory. demanding par- indepen- gard appraisal the and offer ty, appraisal process permissive the is be- loss. dent evidence the amount his they cause have chosen to invoke it. How- as the extent the rights, His so far it, ever, process party once that invokes the concerned, is are limited the mandatory party. to the other becomes appraisers. It would award the result, compels the one As a therefore, seem, should that [insured] appraisal upon the other party to submit to to make the same have Molodyh court party’s demand. The appraisers he proof before the that appraisal award that concluded that being if the matter were would have party binding upon is results justice, litigated in a court of because provi- appraisal because the demanded appraisers keep will him action permissive to him and he chose sion is question again.” litigating the However, appraisal as his forum. added) tribunal (Emphasis 132 P. at 132. Accord requires mandatory compli- a statute Murray, 171 Okl. where Mercantile Ins. Co. v. Therefore, hold, provision, we as the appraisal anee court Molo- with binding 4803(G) praisal party did, is not dyh award makes who did not demand because binding upon party invoking awards binding nature process, yet makes those non-demanding party’s would violate non-binding upon party same awards right jury. trial compelled participate due the other court stated: party’s demand.2 unilaterally may “One decide argues appraisal pro jury other to have someone than a deter- right trial cess does violate the thereby destroy the issues mine jury subject judi because the award is right jury other’s to a trial.” P.2d at fraud, cial review for bad faith and mani per holdings fest mistake this Court’s Oregon reasoning Jester, supra, Aetna Ins. Co. v. Camden sound, analysis and we embrace it our Walker, supra, and Fire Ins. Ass’n v. Mer at At the time this action case bar. Murray, supra. cantile Ins. Co. v. How filed, Constitution, the Oklahoma ever, cases, under these 19, provided: they determine the amount of loss unless by jury “The first find that award was inviolate, except remain in civil cases fraud, subject to faith bad or mistake. controversy wherein the amount does Thus, party prove if the cannot that the not exceed One Hundred Dollars credibility, party award lacks that is denied ($100.00).” the the jury to have determine limit, monetary Other than this no act of scheme, the amount of loss. Under a government may deny right the of by trial the of right jury trial is still thwarted. jury person. to a While as case of arbitration, person may right a his waive to Moreover, Farmers the asserts trial, jury legislature the cannot waive it right by jury only is to trial denied as to for him.1 loss, single the issue of the of amount citing Appalachian Ins. Co. v. Rivcom provision appraisal statutorily-

Since the Corp., Cal.Rptr. Cal.App.3d compels Masseys the mandated (1982). Therein, appraisal rejected the the process upon to con submit demand, unilaterally challenge requiring Farmers has stitutional to a statute Farmers policies appraisal decided which forum the issue of the an clause in all insurance decided, namely of argued amount loss would be written in The California. insured Hence, the a right tribunal. construc- the jury statute denied it the to trial. statutory provision However, tion of the appellate court determined provision the same manner as similar right pursue that the insured to retained its would run afoul of the Art. separate contracts except a civil action on all issues right jury of trial. loss, holding: the amount of “Thus, jury Rivcom is not without trial Masseys urge this Court to rights. simply It has jury right no provision as un strike down the However, regards setting as of the dollar constitutional. we con the loss under pos to strained construe statutes whenever Legislature where the has a uphold constitutionality. sible to their established so as policy providing form Getty St. Fire standard for a Paul & Marine Co. (Okla.1989). particular procedure to be Oil followed subject appraisal binding decision as a Arbitration differs from final their determination of process added) in that is not forced dispute.” (Emphasis arbitration by parties statute. This Court noted in Voss provision agreed in the case at bar was City City, Oklahoma 618 P.2d rather, by voluntarily, required but was statute. (Okla.1980),that referral of a arbitration "the dispute voluntary agreement par fraud, 2. Unless there is bad faith or mistake. impartial ties to one more arbitrators for a aspect process. right tutional at the jury the claim to trial because one narrow be to do vio- To hold otherwise would time that the Oklahoma Constitution longstanding to a and well settled lence adopted, hold- already cases were written law, is no body of where there reason binding ing that on award was Cal.Rptr. at 14. do so.” parties process both entered into agree cannot with this rationale be- We pursuant amount of to a determine ignore such would the clear mandate cause poli- in an contractual insurance provision. In- own of our cy. cites Maryland National deed, Molodyh the court in considered the Ins. Co. v. District Court Oklahoma above-quoted language in its decision and (Okla.1969), County, held: only applies holds to those that provides right “Our constitution un- recognized causes action which were jury trial This ‘shall remain inviolate.’ entitling parties der common law right having jury includes determine all adop- jury thereto trial at time of fact, just those issues that issues tion of This the Oklahoma Constitution. legislature remain after has nar- case and its well-settled stand. How- law process. many in- rowed claims ever, apply it at the here because stances, the of the loss will constitution, adoption time disputed issue.” 744 P.2d at right jury decide had have a questions pertaining of fact to actions Because Art. 19 of Oklahoma policies. fact that case insurance provides right Constitution recognized party that a waive could inviolate, we trial to be remain likewise entering into a contract which legislative narrowing conclude that allowed other to invoke process deny is not effective to claims praisal process for sole issue of amount right all fact party their to have issues bearing upon of loss no this case for has jury. by a decided Thus, this con- the reasons set out above. urges further this Court to fol tention no merit. has holding in Erickson v. Farmers low (N.D. Co., Mut. Ins. 311 N.W.2d 579 Union We, therefore, court-ap- conclude that a 1981), granted a case in which a trial court damage under pointed umpire’s summary judg the insured’s motion statutorily-mandated provision a fire insurer, finding against the that the ment O.S.1981, 4803(G), insurance loss, by or amount arrived at party effect preclusive has no binding on insur appraisal tribunal was appraisal process. did not demand distinguishable it er. This case because QUESTION ANSWERED. provision, only policy involved there be ing no indication that the clause legislative imposed upon parties by LAVENDER, Y.C.J., HODGES, Therefore, entering by into enactment. SUMMERS,JJ., SIMMS, HARGRAVE, and contract, parties agreed to

insurance be concur. once by the invoked. bound above, Masseys had choice As noted no J„ WILSON, OPALA, C.J., and ALMA the inclusion of the clause. as to concur in result. reason, the cases of For the same Chan KAUGER, J., participating. not American dos v. Fire Co. Philadel (1893), N.W. 390 phia, 84 Wis. Justice, OPALA, concurring in Chief Pennsylvania Fire Ins. Young v. result. (1916), among others Mo. 187 S.W. 856 distinguishable. by Farmers, cited are fire pronounces today that a statutorily mandated policy’s insurance is that argument Farmers’ final to damage-assessment procedure, referred praisal process not violate consti- does policy “appraisal” by issue for preclu- which which the Insurer seeks 1— court-appointed umpire determines sive effect —the of insured loss— of actual cash of a fire loss— value judicial cannot constitute settlement of invoking party pro binds the indemnity. My short answer fire (the case) this cedure Insurer in but does would be certified therefore nondemanding (the bind the In not presubmission-stage the Insured’s case). Today’s opinion this rea sured qualify dismissal sans proce sons that the fire loss assessment effect.4 dure violates the Insured’s fundamental- Since the court has seen fit right guaranteed jury to a Art. today address the fundamental-law ortho- Okl. Const.2 doxy clause, loss-appraisal but also join I While the result reached 4803(G)’s5 validity delve into the of § court, pronounce I its must recede from mandate, statutory I separately write Today’s opinion ment. resolves fundamen explain Const.,6 that Art. Okl. unnecessary tal-law issues that are for the standing alone, affords no basis for con- sought answer and formulates a constitu executory contrac- demning the Insured’s tional-law norm broader than that which is tual waiver right his constitutional I required.3 would hold that the Insured’s promise-based trial. Rather, waiv- presubmission dismissal state-court ers case, rights explicitly which occurred before had proscribed by a full and fair If Const.7 4803(B) provide 1.The terms of 36 O.S.1981 Section was first enacted in part: was amended November 1985 and November 1, 1989. The 1985 and 1989 amendments do "B. No or contract fire insurance my made, analysis. throughout affect References by any shall or issued delivered opinion representative any agent are to the law in effect insurer or thereof, when the cause state, any property in the of action unless it arose. stipulations, provisions, as to all conform 19, Okl.Const., 2. conditions, provide terms of Art. agreements with such form of ” * * * pertinent part: added.) policy. (Emphasis 4803(G) provide terms of 36 O.S.1981 by jury "The of trial shall be and remain part: inviolate....” poli- "The the standard insurance form of (with cy permission to substitute word 3. See State ex rel. Okl. Bar Ass'n. v. Lobaugh, ‘company’ descriptive a more accurate term Okl., J., (Okl.1988) (Opala, 781 P.2d insurer) type of shall be as follows: dissenting). n n * * * * Appraisal. In insured case the and this 4. Issue preclusion estoppel and collateral are Company agree shall fail as to the actual legal two the different names for same doctrine. loss, then, cash value or the of on the amount (Second) Judgments Restatement of Com- either, written demand competent each shall select a of (b); Okl., Lathrop, ment Underside v. 645 P.2d appraiser and and no- disinterested Okl., Armstrong, 517 n. 8 Veiser v. tify appraiser the other of the selected within n. II Part infra twenty days appraisers of such demand. preclusion. for a detailed discussion of issue competent shall first select a and disinterested principle apply party when the umpire; failing days agree and fifteen for then, against prior interposed whom the decision is umpire, request such on did not have a "full and fair" Company, umpire insured or this shall precluded the issue to be of a result by judge be selected a a court of of record in McCurry, the earlier 95, case. Allen 449 U.S. property state the in which the covered is 411, 414-415, 101 S.Ct. 66 L.Ed.2d 308 appraisers appraise located. The shall then (1980); Underside, 516-517; Veiser, supra at su- loss, stating separately the actual cash value pra at 800. and, item, failing agree, and loss to each differences, only, shall submit their to the um- 4803(G) 5. For the terms of O.S.1981 § see itemized, writing, any pire. An award so of supra note 1. Company when two filed with this shall deter- mine the amount actual cash value and of pertinent 6. For the of Art. terms Okl. paid appraiser loss. Each shall be the see selecting expenses the him and of umpire paid by par- praisal and the ” * * * 8, Okl.Const., added.) equally. (Emphasis provide: 7. The ties terms of Art. praisal process parties appointed the testing today the con- and were I. 4803(G)’s independent appraisers. When mandated formity of loss-set- two settled, loss claim could not be the Insured mechanism, I that the tling would conclude Later, sought relief a state-court action. Const.8 statute offends Art. by the Be- 4803(G) singles umpire appointed an court. my impermissibly view § parties cause the could reconcile recovery for insured out those who seek appraisals, umpire made an partisan loss for mode of trial different awaiting approv- liti- award which was court accorded other contract-action judge Before could reach for con- infirmity A as- al.12 gants.9 similar could be umpire’s loss merits sideration to that statute under the standards cribed dismissed the state- Equal Insured Protection Clause.10 pend- prejudice. court action without Left ing and undetermined at the termination I (1) the Insured’s the state-court action was ANATOMY OF LITIGATION appointment motion to reconsider the (2) umpire Insur- Insurer’s offer to allow purchased from the Insured11 In- umpire’s on award. The er a fire insurance which contained then refiled his claim in a federal statutorily procedures mandated sured damages sought insured He invocable when fire court. determination punitive prescribed procedure, the loss also dam- property. Under the amount but parties agree ages for the Insurer’s bad-faith failure if cannot on the A expected, the fire claim. trial re- indemnity, they on settle either, appoint parti- judgment against sulted in Insurer for written demand of $4,390,000 actual, consequential pu- appraisers initially to determine san damages. must The federal also appraisers amount of fire loss. The nitive attorney’s umpire. makes the Insured fees of then select an The court awarded $376,275, agree prejudgment exceeding the selection if the cannot interest If, $390,000 $44,766. partisan apprais- any one. after the two costs als, agreement cannot be reached on appeal to the United States Court On appraisals are to indemnity, Circuit, Tenth the Insurer Appeals umpire who makes be submitted to urges only that the state court’s judicially the loss award. ac- umpire’s unconfirmed award should be Pursuant damaged property. A fire the Insured’s corded effect. Questions loss-ap- Certification of of Law policy’s The Insurer invoked the Uniform 8. be invoked why clause. provide: See “'special” plied, benefits of waived, "The "Any provision Regulating provided ceedings other mine.) or infra Art. special pertinent ^[******] Legislature made tribunals_" 23, 8, legislation Part III for shall be null or by any person, Okl.Const., invalidate the contract’s inquiry before terms of rather authorizing: practice ... Constitution Constitution, all a enactments that contract, than not, (Emphasis detailed condemns Art. see except Art. supra void." the courts express pass explanation sought judicial note 8. as mine.) Okl.Const., (Emphasis otherwise any offending prescribe should ... to be local This pro- im- or 10. 12. 11. To those whose pendent jurisprudence. disparate policy I refer use United States See litigation Okl., 203-204 000; umpire’s was person within its “ * * * tion The Insured’s U.S. the masculine infra $49,146. 760 P.2d the Insurer’s of the laws. School Dist. No. judicially procedure Part V nor shall class. See also Supreme collectively Amend. for appraiser set the loss at jurisdiction unconfirmed fire property pronoun “he”. appraiser any a detailed * * *” Court’s State 9, Okl., single as 1§ Reynolds was insured "the at discussion provides ... equal Maule v. Inde and indivisible $49,000. Insured” equal protec- deny loss protection in Porter, award $113,- part: and any Act, seq., indispensable prerequisite O.S. 1601 et Unit- sue.14 An for a §§ preclusion Appeals plea ed States successful issue is that Court Tenth party against whom it is invoked must Circuit certified for our answer the follow- have had ing to liti- question: full fair gate the issue.15 law, “Under pre- Oklahoma what is the court-appointed clusive effect of a um- Although procedure loss-appraisal pire’s damage appraisal under a statuto- may completed conformity have been terms, rily-mandated provision a fire contractual insur- policy’s the insurance insured, ance where the umpire’s as of judicially unconfirmed award right, prejudice dismisses without an ini- cannot preclusion pur- be viewed —for issue of ad- challenging poses tial without equivalent lawsuit the um- the functional —as judged recovery the Insured’s pire’s and, thereafter, institutes fire loss.16 federal-court record before us subsequent lawsuit on the same cause does not disclose either judg- a state-court action in another court?” ment or order (a) determines final approves (b) amount of loss or II I hence umpire’s loss award. would con- NO PRECLUSIVE EFFECT MAY BE clude today that recovery Insured’s GIVEN TO THE STATE-COURT JU- never fully fairly was liti- DICIALLY UNCONFIRMED UM- gated umpire’s and the unsanctioned AWARD PIRE’S lacks the attributes critical for The Insurer contends the fire loss plication preclusion. of issue The state- finally determined action, had presub- ended umpire’s unapproved loss award. Under mission dismissal17 judicial sans settle- collateral issue, estoppel,13 ment doctrine any tendered once a simply failed court has decided an issue of fact or law than “otherwise the merits.” Its necessary judgment, its the same yield ashes will hopes what the Insurer preclusion privies may relitigate or their the is- extract here: court, supra jury, note 4. or to the where is "* * * court. Under “final submission” occurs after McCurry, supra 14. Allen v. 449 U.S. at fully fairly litigated. law and facts are In a 414-415; Armstrong, supra 101 S.Ct. at Veiser v. court, case evidentiary tried to the where the 7; note 4 at n. 799-800 see also Underside v. process given has been concluded and time 4; Plotner, Okl., Lathrop, supra note Benham argument filing counsel briefs, for future future finally the cause is not submitted and the plaintiff may prejudice. dismiss without Fire- finally 15. When an issue of law or fact is decid- Barnett, Okl., stone Tire & Rubber Co. v. inquiry by ed in an action after full fair (1970), quoting Tiffany Tiffany, competent jurisdiction, ques- court of the same 1) (1948). (syllabus 200 Okl. 199 P.2d 606 tion cannot thereafter be revisited and decided voluntary 18.The Insured’s dismissal without differently subsequent another and different prejudice of his state-court action it had proceeding. Armstrong, supra suit or Veiser v. before gone to is submission but a "failure of the ac- note 4 at 800. tion otherwise than on the merits” under 12 O.S.1991 100. The terms of O.S.1991 appraisals 16. For amounts the two and the 100, variously "savings," called the "recom- umpire’s see note 12. statute, pro- mencement-of-action” or "renewal” vide: 17. The law’s condition on Insured’s time, "If action commenced due within to dismiss state-court action without plaintiff and a thereon for the is prejudice that the was dismissal come before reversed, plaintiff or if the in such action fail final submission case to the or to the merits, plaintiff, otherwise than court. § 12 O.S.1991 683. or, die, if he should and of the cause action pertinent pro- The terms of 12 survive, § O.S.1991 683 representatives may his commence a vide: (1) year new action within one after the rever- dismissed, may preju- An action without although sal or failure limit the time for com- First, By plaintiff, dice to a future action: mencing expired action shall have before (Emphasis mine.) before the final the case to submission of the new action is filed.”

«89 validity ei- umpire’s ry into loss fire fundamental-law of which would bind clauses or ther of in later- the Insured of appeal.19 4803(G)’s brought suit now statutory mandate. federal-court In ad- very time the Insured dismissed At necessity rec- of shown vance strict action, and unde- pending his state-court ord, today any I would not address judge was his motion termined before by the constitutional issues settled court’s umpire’s appointment to reconsider the to us.22 question answer before offer to allow as well as the Insurer’s 2, 19, applies The court Okl. umpire’s award. The mo- judgment on the Const., standing alone, as a vehicle to insupera- an to stood as tion reconsider 4803(G)’s to submission.20 Preclusive invalidate not mandate but ble barrier appraisal provision. The umpire’s policy’s also the may not effect be accorded award. judicially industry’s long-standing unconfirmed custom insurance including loss-appraisal mechanism in of a Ill this contract clause policies an gives fire independent OKL.CONST.,21 separate 2, 19, ART. UPHOLDS existence from BY RIGHT TO TRIAL JURY statutory mandate.23 ONE’S The clause’s o/the BUT DOES NOT PROTECT 4803(G) long widespread usage before AGAINST EXECUTORY CONTRAC- ap ever into clothes the enacted THAT TUAL WAIVER OF RIGHT praisal with the unmistakable earmarks a custom the traded.24 As here umpire’s may award be tested of of inqui- industry’s preclusive judicially sanctioned insurance for its effect without a ring); argument In No. State presents an intermixture Re Initiative Petition 347 19. Insurer's Okl., 639, 1019, preclusion Question issue P.2d 1037 of strands drawn from No. 813 selective C.J., (1991) judicial estoppel concepts. (Opala, concurring); Neither of these Smith v. West- Okl., 466, theories, inghouse Corp., to as two which Insurer seems advance 732 P.2d 467 n. 3 Elec. doctrine, 280, Okl., (1987); Diehl, integrated legal will avail here. an v. Schwartz State, (1977); Department preclusion some is uninvocable without Dablemont v. Issue of 563, Okl., op adjudication Safety, a full and fair antecedent Public 543 P.2d 564-565 348, litigate, McCurry, supra (1975); portunity v. Allen see In re Initiative Petition No. also 772, 781, Okl., (1991) Lathrop, supra (Opala, Ju v. note 4. n. 4 note Underside 820 P.2d C.J., Walters, result); prevents concurring estoppel, a v. dicial knowingly in Johnson Okl., (1991) given position (Opala, a from tak n. 26 assumed 819 P.2d C.J., dissenting ing concurring part part); in the course of the inconsistent stand Lobaugh, judicial proceeding, supra Messler v. Simmons ex Bar v. same State rel. Okl. Ass’n. Inc., Okl., 341, Okl., 3; Specialties, No. 687 P.2d Initiative Petition Gun (1984), note Re V.C.J., (1990) (Opala, doc equally The latter concur- is unavailable. 796 P.2d result). fully application ring more eluci trine’s came to be v. Cities Service dated Panama Processes does not us call for certified Okl., (1990), we stated where . testing. give We asked our are asserting prevent party it question: um- answer to but one whether the contrary legal theory advanced earlier in to one may pire’s loss be accorded litigation. we declare The mechanism are to complete See end I text Part effect. settling legally proper in this case question. certified law, is a matter Insured’s judicial could bind the Insured fact history long-standing claus- 23. Panama, estoppel. supra at 286. can be to the time of our statehood. es traced Ballard, York v. See Home Ins. Co. New Barnett, Co. Tire & Rubber 20. Firestone P. 316 Rochester German Okl. 17; supra Tiffany Tiffany, note Rochester, Rodenhouse, 36 Co. N.Y. v. pertinent of Art. Okl. 21. For the terms 128 P. 508 supra note 2. see "usage trade” For a see definition necessity, prudential ad 22. The rule of strict 19; pertinent its terms are: O.S.1991 courts, holds all state and federal hered public "Usage cus- reasonable and lawful not be issues must resolved that constitutional Chadha, concerning na- transactions of same necessity. tom I.N.S. v. advance strict thereby, 919, 937, be affected ture as those which 103 S.Ct. U.S. obligation existing place is to where the at the Ashwander v. Tennessee L.Ed.2d 317 288, 347, par- performed, and known be ties, either ValleyAuthority, 56 S.Ct. 297 U.S. established, J., general 483, (1936) and uni- (Brandeis, well concur- so 80 688 L.Ed. disputes able in long-established practice, futuro, loss-appraisal arise in clause is infirm.28 ignored. clause cannot It legitimate be is a offspring of Oklahoma’s common law. The IV legal 4803(G) norm embodied should § 4803(G)’S SECTION MANDATE FOR UM- declaratory hence be considered as PIRE-AWARDED FIRE LOSS VIO- pre-existing unwritten law.25 It does not 5, 46, LATES THE ART. OKL. § facially 2, 19, contravene Art. Okl. § CONST.,29 PROHIBITION AGAINST upholds per- Const.26 The latter section SPECIAL LAWS son’s by jury fundamental but protect against executory it provisions Remedial statutory fails n contractual apply waivers. Were I fewer than an entire class convinced similarly persons situated today are constitu- that the constitutional issues settled 5, tionally 46, infirm. Art. Okl. Const.30 I would reached, § the court should be litigants Contract comprise single but a 19 but solely on Art. rely 23, 8, Okl. § § class. Section 4803(G) singles out fire in- Const., the section explicitly proscribes that demnity insureds deciding use of a promise-based waivers of constitutional mechanism different trial. The policy’s appraisal mecha- rights.27 2, by Art. latter trial mode nism, afforded which stands as a substitute “mode 19, Const., Okl. litigants. to all contract § disputed losses, trial” clearly fire 4803(G)’s Were we to countenance man- 8.§ offends date for fire loss properly as a A loss-appraisal procedure may be mechanism, substituted settlement a dicho- viewed as an or desirable method efficient tomous division of trial mode would be resolving the amount a contested contrary 5, to Art. 46—for a created — claim both agreeable. if single class of contract litigating parties.31 But because Art. absolutely inter 23, 8, Fire loss claimants would have dicts executory judicial ex enforcement of settling method for disputed contractu relinquish commitments indemnity amount of paid, to be while other rights may be avail litigants contract would continue enjoy form, 1027, they presumed (1985); must Okl., be to have Hagler, 1031-1032 Hood v. 548, acted (1980). with reference thereto." 606 P.2d 552-553 are; 1-205(2); See also 12AO.S.1991 § its terms 2, 19, Okl.Const., Although supra “(2) usage any practice A of trade is or meth- 2, may trump government-erected be invoked to dealing having regularity od of of ob- guaranty barriers to the constitutional of trial place, servance in a vocation or trade as to jury, executory its reach does not extend to con- justify expectation that it will be observed tractual waivers. respect question. with to the transaction in scope usage The existence and of such a are to 23, 8, Okl.Const., 27. For the terms of Art. proved see as facts. If it is established that supra note 7. usage such a is embodied in a written trade writing interpretation code or similar 6, writing Independent 28. Raines v. School is for the court.” Dist. No. Okl., 303, (1990) (Opala, 796 P.2d 304-305 usage practice 25.A regularly is a or method V.C.J., concurring); Reynolds, Dean Witter Inc. Refining Marketing observed. Hull v. Sun Shear, Okl., 296, (1990); Long v. 796 P.2d v. Co., Okl., 1272, (1990); 789 P.2d see also DeGeer, Okl., 1327, (1988) (Opala, 753 P.2d Equipment Braden Winch Co. v. J., concurring). Surface Okl. 165 P.2d A declarato ry expressive pre-existing statute is common pertinent 29. For the terms of Art. Okl. Will, Ungaro's N.J.Eq. law. In re 102 A. Const., supra see note 8. Sandkamp, Nelson v. 227 Minn. 34 N.W.2d pertinent 30. For the terms of Art. Unabrogated supra Reynolds common law stands side see note 8. See also side v. Porter, 9; legislative supra Waggoner County with its modification. note Board v. Com’rs. v. Okl., Homes, Inc., Okl., Muskogee, Country Town and Mobile 820 P.2d Maule (1991) V.C.J., Indep. (Opala, concurring supra School Dist. No. note 9. part dissenting part); State Mut. Life Okl., Hampton, Porter, Reynolds Assur. Co. Amer. v. note 9. short, 4803(G) plainly and the classifica- tween the distinction jury trials. )6’s 5, prohibition against purpose.35 violates tion’s enactments. special remedial

SUMMARY V today simply I would my For answer that, in the scenario tendered hold THE UNITED STATES SUPREME accompanying and the certified record, EQUAL PROTECTION COURT’S umpire’s ju- court-appointed JURISPRUDENCE dicially unapproved award36 in the earli- pre- have er state-court action does not proce- The statute-mandated phase the later clusive on under the United pass dure will not muster effect litigation. equal protection Supreme Court’s States federal-court 4803(G) calls for jurisprudence. Section deciding mechanisms

the use of different single class.32

litigation that falls within enlarge the

Although states are free to guaranteed by the federal

basic freedoms

constitution, they may not create artificial damage claimants who are

boundaries equal protec- similarly situated.33 To meet In the Matter of the REINSTATEMENT all standards, claims their tion BARD, Jr., Rogers to member- Jack OF treatment, but need not receive identical ship Bar Association in the Oklahoma a classification the distinctive features of Attorneys. and the Roll of purpose must have some relevance No. 3756. SCBD created.34 for which it has been Supreme Court of Oklahoma. mandatory loss purpose avowed appraisals quick practical resolution 14, July 1992. Because the disputed fire loss claims. goals applicable to oth-

very same are also indemnity dis-

er and insurance contract

putes, I find no rational connection be- Okl.Const., 111, 2, 7, 107, Herold, provide: The terms of Art. v. 383 U.S.

32. Baxstrom life, 760, 762-763, liberty, person deprived “No shall be L.Ed.2d 620 Hum S.Ct. 504, 508-512, process property, without due of law.” Cady, S.Ct. phrey U.S. v. 1048, 1051-1054, Cascio 31 L.Ed.2d 36.See, e.g., & Ass’n v. Federal Sav. Loan Astoria 282, Okl., Dept. Safety, Pub. v. State — Solimino, -, 111 S.Ct. 2169- U.S. (1991), where the Court 115 L.Ed.2d 96 legislate Congress "is understood noticed against Herold, supra note 383 U.S. 33. Baxstrom v. adjudica background of common-law 763; Cady, supra Humphrey v. S.Ct. at at pre tory principles,” the rules of which include 1053; at S.Ct. at Cascio note 405 U.S. clusion, judicially held unre- but nonetheless Safety, supra Dept. note 32. Pub. v. State findings to be with state administrative viewed age-discrimination pro preclusive out 32; Herold, supra Hum note 34. Baxstrom effect court, raising ceedings because the bar 32; Foster, supra phrey Cady, Wilson v. federal preclusion with Con would be inconsistent Okl., (1979); see also Cascio P.2d enacting Age Discrimination gress’ intent Safety, supra Dept. note 32. Pub. v. State 621 et Employment Act of 29 U.S.C. today seq. to conclude that Were we note 10. U.S. Amend. judicially given in this case to a effect could be does not include an Oklahoma Constitution holding unapproved umpire’s our would protection to that found in equal clause similar unequivocal text with the counterpart, has identi- be inconsistent but this court its federal construing jurisprudence 12 O.S.1991 equivalent of that clause fied a functional presubmission requires dis component con- That section of our state anti-discrimination plaintiffs he here to like that of the process missal section. Art. stitution’s due disposition "otherwise than on as a Okta. v. treated Sch. Finance Coun. Const. See Fair Okl., State, merits.” 1148 n. 48

Case Details

Case Name: Massey v. Farmers Insurance Group

Court Name: Supreme Court of Oklahoma

Date Published: Jun 22, 1992

Citation: 837 P.2d 880

Docket Number: 75279

Court Abbreviation: Okla.