Date: 04-10-2006

Case Style: Joann D. Heberman v. The Hartford Insurance Group d/b/a Hartford Insurance Company of the Midwest

Case Number: 03-6338

Judge: Holloway

Court: United States Court of Appeals for the Tenth Circuit on appeal from the Western District of Oklahoma (Oklahoma county)

Plaintiff's Attorney:

Elizabeth R. Castleberry, Esq. (James A. Scimeca, Esq. and Jack S. Dawson, Esq., with her on the brief), Miller Dollarhide, Oklahoma City, Oklahoma, for the Appellee.

Defendant's Attorney:

Christopher M. Murphy (Brently C. Olsson with him on the brief), Hartford Insurance Company of the Midwest, Oklahoma City, Oklahoma, for the Appellant.

Description:

This appeal arises out of an uninsured motorist coverage dispute between the Defendant Hartford Insurance Group, d/b/a Hartford Insurance Company of the Midwest, a Connecticut Corporation (the "Hartford"), and Oklahoma Plaintiff Dr. JoAnn D. Haberman ("Haberman"). The Hartford appeals from a final Amended Judgment entered on a jury verdict in favor of Haberman. The Hartford also challenges the denial of its summary judgment motion. In a cross-appeal, Haberman appeals from the denial of her motion for new trial and to amend the judgment. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and AFFIRM. BACKGROUND

Plaintiff Haberman is the sole shareholder of a professional corporation, Breast Cancer Screening Center of Oklahoma, Inc. On August 20, 2000, Haberman and her office manager, Tamara Moomey, were returning to Oklahoma City from a pleasure trip in Dallas, Texas. Moomey was the driver and owner of a 2000 Mercury SUV that was headed northbound on I-35 just five miles south of Davis, Oklahoma. Moomey lost control of the SUV and spun off the highway, killing herself and injuring Haberman who sustained a fractured pelvis and multiple contusions.

Moomey's insurer, GEICO Direct, settled with Haberman for its liability limits of $50,000 and an additional $50,000 on Moomey's Uninsured Motorist policy. Haberman then attempted to pursue a further claim for benefits under the Uninsured Motorist (UM) provisions of her policy through the Breast Cancer Screening Center. However, the 2000 Mercury SUV was not a scheduled vehicle under the Center's commercial insurance policy.

On some date,(1) prior to the accident, the Center had taken out a Special Multi-Flex Commercial Business insurance policy with the Hartford. Haberman did not personally pay insurance premiums to the Hartford for the policy; rather the Center paid the premiums. The Center was the "named insured" for all lines of coverage under the policy, including the uninsured motorist (UM) provision under the commercial automobile section.

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The UM provisions in the policy only covered two automobiles, a 1988 Honda Accord and a 1999 Lexus LS400, which were listed under Symbol 7 of the Center's commercial automobile policy. The commercial policy section titled "Schedule of Limits Uninsured Motorist Coverage and Underinsured Motorists Coverage" states that the limits are designated as $300,000 each "accident."B. Haberman's Claim to the Hartford

On February 28, 2001, Haberman, through counsel, submitted initial correspondence to the Hartford stating, "We are making a claim under Dr. Haberman's uninsured motorist coverage." Ann Marie Mull was the Hartford adjuster assigned to the claim.

On March 27, 2001, Mull wrote Haberman's attorney a letter explaining that the Hartford had denied coverage because only the two scheduled vehicles under the policy (the 1988 Honda and the 1999 Lexus LS 400) were covered. Mull cited the definition of "Symbol 7" found in the Business Auto Coverage Form under the policy, as the basis for denial because Haberman was not riding in a covered vehicle under the commercial insurance policy. Mull also requested that Haberman provide any additional information that she wished the Hartford to consider on its decision to deny coverage.

PROCEDURAL HISTORY

On July 30, 2001, Haberman filed suit against the Hartford, alleging claims under the insurance contract and for bad faith failure to pay. The United States District Court for the Western District of Oklahoma exercised jurisdiction pursuant to 28 U.S.C. § 1441 et seq. and 28 U.S.C. § 1332, as the parties are completely diverse and the amount in controversy exceeded $75,000.

On May 28, 2002, the Hartford filed a motion for summary judgment which addressed the contract and bad faith claims. Haberman filed an objection to the Hartford's motion for summary judgment and a counter motion for summary judgment on the coverage issue. Applying Oklahoma law, the district court concluded, as a matter of law, that the Named Person endorsement is unambiguous and makes Haberman a named insured for all purposes under the policy. The trial court also made an alternative ruling that if there is any merit to the Hartford's interpretation of the endorsement, it is ambiguous and any ambiguity would be resolved in favor of Haberman based on parol evidence which includes the interpretations of the Hartford's adjusters. Based on these conclusions, the trial court entered summary judgment on the coverage issues in favor of Plaintiff Haberman.

The case proceeded to trial on August 11, 2003. At the conclusion of the evidence, Haberman moved for judgment as a matter of law on her contract claim. The motion was granted. The Hartford also made motions for judgment as a matter of law, but each time the grounds for the motion were limited to Haberman's bad faith cause of action. The motion as to the bad faith claim was denied.

The case then went to the jury. Haberman requested jury instructions which dealt with the specific duties of the Hartford, which the trial court declined to give. Haberman also objected to Instruction No. 11, Failure to Deal Fairly and in Good Faith, for not noting specific items of the Hartford's conduct which could be considered bad faith.

On August 15, 2003, the jury returned a Plaintiff's verdict for $548,000 on the contract claim, $5,000 for actual damages on the bad faith claim and a further $100,000 for punitive damages on the bad faith claim. Judgment was entered by the district court on September 3, 2003. On Sept. 17, 2003, Haberman filed a motion to alter the judgment or for a new trial, which was denied on November 13, 2003.

ISSUES PRESENTED

On appeal, the Hartford alleges pretrial, trial and post-trial errors, and Haberman alleges a post-trial error by a cross-appeal. The Hartford contends that the court committed reversible errors by finding that the named person endorsement makes Haberman a "named insured" for all purposes under the insurance policy, and by its ruling that Haberman is entitled to stack UM benefits. We affirm the district court on these rulings.(3)

The Hartford next raises two trial errors. First, the Hartford argues that the district court erred in denying its motion for judgment as a matter of law and submitting the issue of bad faith to the jury. Second, the Hartford argues that the court committed reversible error by instructing the jury on punitive damages. We hold that the district court correctly applied the law on these issues.

Finally, the Hartford contends that the amount of punitive damages violates its due process rights. We disagree and hold that the punitive damages award is not violative of due process. On cross-appeal, Haberman argues that the trial court erred in failing to grant a new trial based on inadequate instructions. We hold that the district court's instructions were adequate.

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Outcome: Accordingly, we AFFIRM the district court's judgment.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None