*1 McCOY, Appellee, Ralph MUTUAL FARM BUREAU
OKLAHOMA COMPANY, Appellant.
INSURANCE
No. of Oklahoma.
Supreme Court
March Rehearing Sept. on Amended
As Webber, Shirley
Shirley, Stephenson, & Beadle, Stephenson Tom R. and Christine appellee. Watonga, for Cathcart, Stratton, W.R. Cath- Gofton & Herzfeld, City, cart and Allison Oklahoma appellant. DOOLIN, Justice. (Homeowner), Ralph McCoy,
Petitioner actual under an in- was awarded policy respondent with surance (Insur- Company, Farm Insurance Mutual er). a verdict The same also returned faith claim on his for Homeowner Insurer, actual and *2 investigation experts found no evidence of damages arising from Insurer’s punitive Upon fought re- arson. The volunteer firemen who handling of Homeowner’s due view, Appeals of affirmed the the blaze testified that to the inaccessi- the Court bility Insurer contractu- of a me- supply which held sufficient water and jury’s verdict policy. appara- under its the fire ally fighting liable chanical failure of tus, major damage structural was incurred However, opined appellate court residence. to Homeowner’s The State have been reduced jury verdict should Marshal’s could not office determine paid to Home- by amount Insurer actual but ruled that it cause mortgagee. The intermediate owner’s accidental in nature. was as to Home- reversed the verdict court also Insurer, faith owner’s bad claims However, origin ex- Insurer’s cause and attorneys’ of trial court’s award and the pert, investigated who Homeowner’s claim Appeals re- Finally, fees. Court days approximately eight cause a redetermination of manded the for fuel and claimed that he was able smell arising from Homeowner’s attorneys’ fees an in the ruins found traces of accelerant only. claim contractual residence. Insurer’s ex- of Homeowner’s deliberately fire pert that the was Mangum, in residence Homeowner’s using expert al- gas. set white personal property and his were leged that he saw a Coleman lantern at destroyed by fire. Homeowner filed however, fire; was personal scene of the the lantern proof loss and a statement gone returned his lunch damaged and under an insur- after he property lost alleged presented evidence policy. Homeowner that his break. Homeowner ance wiring. faulty credibility Insurer’s ex- by challenging was caused loss alia, provided, In policy pert investigation techniques. inter cover- and insurance his $50,000.00 age damage to the struc- for addition evidence of an incen- to its ture, $25,000.00 personal for diary Insurer introduced evidence $10,000.00 living and for ex- property, tending had mo- show that Homeowner penses. tive, intent, opportunity an to commit and Nevertheless, jury arson. denied claim. Al- Insurer $55,000.00in ac- Homeowner and awarded loss, year after Homeowner’s In- most one contrac- tual under Homeowner’s contended, 1) fire was inten- that the surer tual claim. either or at the direction of tionally Homeowner, 2) that made ma- Homeowner trial, the During phase of the the second misrepresentations and violated the terial testimony concerning whether jury heard provisions swearing false fraud and good its obligation Insurer breached 3) policy, that Homeowner increased or dealing handling faith fair leading knowledge of hazard to the policy. claim under insurance filed this action Homeowner then loss. that Insurer acted Homeowner contended against Insurer for of contract and breach claim, handling his unreasonably pay refusal to a valid claim. At bad faith claim was bifurcated; request, trial was biased, are as claims and not conducted is, Homeowner’s claim under breach of indus- ordinarily handled separated from contract was the insurance alleged that try. also Homeowner alleging Insurer action experiencing problems cash-flow implied duty fairly to deal breached its adjusters pay- stall had informed its faith. good act in ver- returned a ments of claims. his bad trial, dealing Homeowner on dict phase one of the with favor In $30,000.00 in non- against In- contractual claim $30,000.00 pu- damages and testimony contractual surer, jury heard and re- Subsequently, the trial concerning damages. nitive viewed fees attorney’s electrical, incendiary, court awarded whether the litigation the contractual and costs for Homeowner’s fire nature. accidental jury, for determination From adverse submitted action. this phase of this rein- verdict, jury’s verdict should be appealed. properly In stated affirmed. a case affirmed The Court of court jury, appellate to the an submitted Insurer contractu- it held insofar as *3 evidence, weigh the nor will it will not However, the policy. ally liable under its peculiar province and sub- jury’s invade the jury’s that the reasoned appellate court jury for the judgment stitute that of its $55,000.00, arising Home- from award of fact-finding function the exercise of its as a claim, should have owner’s contractual body.3 paid amount Insurer credited the been Consequent- mortgagee.1 to the bad faith There is no evidence that damage contractual ly, Homeowner’s by passion, verdict was actuated Upon further review award was reduced. prejudice, improper sympathy, or based Appeals record, found the Court of the upon caprice, any or without reasonable tending support to reasonably “no evidence indulge This will in the foundation.4 Court un- regarding the verdict jury’s cor- presumption that the verdict is faith breach reasonable and bad rect, any competent is evidence and if there words, In other as contract.” insurance reasonably tending support to the verdict fully herein below more addressed will not disturb the jury, this Court improperly weighed Appeals Court judgment thereon. verdict and based reaching its conclusion that dispute” “legitimate was a between there as to jury’s The verdict is conclusive regarding the bad and Homeowner Insurer conflicting all and all state disputed facts Accordingly, appellate faith ments, including credibility of witness jury’s awarding verdict court reversed weight given to es the effect be damages punitive actual and Homeowner expert or inconsistent testimo action. under his bad faith ny. questions these Of Inasmuch as are Appeals Finally, reversed the Court facts, fact to trier of be determined fees, attorney’s the trial court’s award jury, or will not be whether court same pre- holding that Homeowner not appeal are not disturbed on since such claim, faith inas- vailing party the bad on questions of law.5 as the court had reversed the much damages. court re- tort case, jury, In the instant for a redetermination of manded the cause awarding Homeowner under attorney’s arising fees from reasonable that policy, must have believed of his prosecution breach fire, on did not his house Homeowner granted only.2 We contract action procure We his residence to burned. be petition for certiorari. competent is are of the there support jury’s conclusion record, evidence to its examination In incendiary ori not of an that the fire was regarding Homeowner’s faith claim unreasonably withheld Insurer, gin, that the Court payment of Homeowner’s reasonably tending to no evidence handling of and We hold that support verdict. con- response claim to Homeowner’s loss was properly
Homeowner’s bad
Tulsa, Inc.,
Bank,
P.2d
e.g.,
4.
v.
708
See
v. Southeast
620
LeFlore
1.
Puckett
Plaza
Reflections
Bldg.
1985).
(Okla.App.1980)
Savings
(Okla.
&
461
P.2d
1068
Co.,
Ass’n.
Lmbr.
170
Loan
v. Seaman-Pacard
(1935).
40
660
Okla.
P.2d
Sterne,
606
Wiggins
293 P.2d
5.
(Okla. 1956);
v. St.
Francisco
Walker
Louis-San
O.S.1981,
§
36
(Okla.
Co.,
1982);
Ry.
Holley v.
tools, his residence remodeling and was Marshal’s office were unable detect an On the through efforts and labor. his own accelerant, investigator testified made a night of the eight days, even after he was able sandwich, then went “manwich” smell fuel in the ruins. The record indi- neighbor work. cates that the scene was not through a window he could see preserved signs of vandalism were also *4 residence, only saw and Homeowner’s detected. days Almost 240 after the and out from the roof vents coming smoke Insurer denied around every and crevice the of crack Insurer’s impli- circumstantial evidence Mangum of testified Chief house. The Fire cating Homeowner with arson was not be- any in the he did see flames dwell- that not jury. First, lieved by the there was no Mangum City A ing, only smoke. thick proof direct connecting Homeowner with firefighter upon who entered the residence Second, the the fire. although cause of the arrival at the scene the fire testified that cause of conclusively the could not be only place ceiling fire in the the he saw was by expert determined other fire investiga- area, kitchen-dining room and that tors, testimony the of Insurer’s cause and hitting burning sheet rock started origin that the expert incendiary fire was firefighter floor. Another also stated that effectively origin impeached by was other any did not fires inside the he observe floor experts who found no indicia of arson. house. exception With Insurer’s expert, eyewitnesses to testimony The from investigation expert, including no other fire testimony fire was inconsistent with the the State Fire Marshal’s office expert, alleged that from Insurer’s who Mangum Department, any evi- incendiary in origin, fire was and started related, dence that the fire arson was gallon by approximately gas. one of white by caused the use an accelerant. Under independent There was no evidence of fires prevailing at the scene of the conditions expert in the two locations where Insurer’s Mangum fighters fire none of allege gas poured that had white been eyewitness smelled and no an accelerant Furthermore, testimony set afire. from initially any emitting saw flames from fighters the fire that the fire indicated dis- investigation house. Homeowner’s fire ex- persed, and caused extensive to pert experiments to scientific that testified Homeowner’s residence fire because he to that conducted which tended show department unable to deliver sufficient was a since considerable amount water was at the fire scene amounts water blaze, extinguish used to and consider- hour approximately 45 minutes to an after ing prevailing weather conditions its arrival. gas Mangum white could odor of adjuster field conducted her ini- human after not be detected with the nose investigation, nothing tial and she found eight days. passage adjuster suspicious. The field had issued a expert also testified that request to home office that was problems evidence of electrical discov- payment. receive an advanced How- owner ered, crystalliza- shorting that the ever, request for reasons unknown could caused the fire. tion wires have subsequently cancelled Third, sup- fact circumstantial evidence undisputed home office. This motive, alleged intent and ports permissible of Homeowner’s inference subsequently opportunity deliberately to fire was that Insurer acted unreason- denying to convince the and the ably and in Home- not sufficient sup- did year apparently not claim almost one high light of the facts and circum- For exam- too defense.6 Insurer’s arson port else, that Homeowner the case.9 Above all stances ple, bind, girlfriend his lawyer’s live-in fee reasonable.10 in a financial shall be relationship and left plaintiff's to attor- attorney terminated their fee awarded earlier, and that Homeowner one week reduced the sum of neys is therefore to approxi- his residence $33,000.00, attorney Homeowner was at awarded Ste- be prior to the fire. minutes mately $27,000.00, 30 to 40 sum of to be phenson, that, 1) pri- However, attorney Perkins. paid all he had or to the fire is Court of due and payments mortgage premiums and VACATED, is the JURY VERDICT 2) bind, that his not financial he was in a AFFIRMED, hereby REINSTATED and plan- daughter were their former wife and AS MODIFIED. Georgia his resi- into ning to move 3) routinely he Mangum, dence fix his jobs to at home between
stopped WILSON, his HODGES, V.C.J., and ALMA evening meal. SUMMERS, JJ., KAUGER and concur. presented evidence was Conflicting *5 OPALA, C.J., SIMMS, J., concur “had concerning whether Insurer part. dissent in part; belief, perfor- good faith at the time its requested, justifi- that it had a mance was HARGRAVE, JJ., LAVENDER and withholding payment under reason for able dissent. verdict, jury an- policy.”7 By its jury did not negative. swered OPALA, Justice, part concurring Chief fireman, Homeowner, a former believe dissenting part. fire, and deliberately set his home on would join I cannot in the court’s drastic reduc- Mangum Depart- City assist the then tion counsel-fee award. fire. extinguishing another house ment regard to Homeowner’s bad With reviewed the record we have SIMMS, Justice, concurring part; competent supports which find evidence dissenting in part. not have
jury’s conclusion that Insurer did portion I dissent from that good faith belief for withhold- a reasonable awarding attorneys fees. ing Homeowner’s claim. payment of de- jury evaluated treated un-
termined that Homeowner was unreasonably
fairly and and that legitimate deny Home- no reason to will not disturb. claim. This we
owner’s the trial rec-
After further examination of
ord, upon credit agree we do $55,000.00 have been al- should paid to Home- amount
lowed mortgagee.8 in this case the record
Review of its dis that the trial court abused
reveals attorney fixing an fee which
cretion Oklahoma, See, City 598 Co. State ex rel. Burk v. v. Connecticut Fire Ins. Bowen 140, 286, Conn., 659, (Okl.1979). Hartford, 141 193 Okl. 143 P.2d P.2d 661 (1943). 1.5(a), Rules of Professional 10. Rule McDanel, 736 P.2d 7. Buzzard Conduct, O.S.1991, App. Ch. 3-A. (Okla.1987). 1, supra. See n.