Date: 08-13-2012

Case Style: Larry Spriggs v. Allamerica Financial Benefit Insurance Company

Case Number: CJ-2012-2040

Judge: Mark Barcus

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Donald E. Smolen, II and Laura Lauth, Smolen, Smolen & Roytman, Tulsa, Oklahoma

Defendant's Attorney: Dan S. Folluo and Randall E. Long, Rhodes, Hieronymus, Jones, Tucker & Gable, Tulsa, Oklahoma and John J. Bowling, Tulsa, Oklahoma for Allmerica Financial Benefit Insurance Company

Bruce A. McKenna, Glendening McKenna & Prescott, Tulsa, Oklahoma for Dorsey Insurance Agency, Inc.

Description: COMES NOW the Plaintiff, Larry Spriggs, by and through his attoffPffd,T)onald E. Smolen, II, and for his cause of action against the Defendant Alimerica Financial Benefit Insurance Company, sets fofth and states as follows

PARTIES, JURISDICTION AND VENUE

1. The Plaintiff is a citizen of Oklahoma residing in Tulsa County, Oklahoma.

2. The Defendant, Alimerica Financial Benefit Insurance Company C’Allmerica”), is a foreign corporation conducting regular business in Tulsa County, Oklahoma.

3. The acts, occurrences and omissions complained of herein occurred in Tulsa County, Oklahoma.

4. This Court has jurisdiction and venue is proper in Tulsa County, Oklahoma.

FACTS COMMON TO ALL CLAIMS

5. Paragraphs 1-4 are incorporated herein by reference.

6. On or about June 2, 2011, Plaintiff was involved in a motor vehicle accident as a result of the negligence of an underinsured motorist.

7. On the same date, Plaintiff was insured under a contract with Defendant Ailmerica where the Defendant was to provide underinsured motorist coverage for the Plaintiff in accordance with said policy.

8. On or about November 2, 2011, Plaintiff notified Defendant Ailmerica he was making a claim under said underinsured motorist policy.

9. On or about November 4, 2011, Defendant Ailmerica contacted Plaintiffs counsel and informed him that no underinsured motorist benefits were available to Plaintiff under said policy.

10. On or about December 23, 2011, Plaintiff made a demand on Defendant Alimerica for his underinsured policy limits, requesting that said limits be paid by January 9, 2012.

11. Despite this demand, Defendant failed to pay Plaintiff the benefits he was entitled to under his underinsured motorist policy in effect with Defendant, continuing to assert that no coverage. existed.

12. On January 10, 2012, Plaintiff informed Defendant Allmerica that the third-party tortfeasor had tendered policy limits, and Naintiff requested that Defendant either waive subrogation or substitute payment pursuant to Oklahoma law. At this time, Plaintiff informed Defendant that if Defendant failed to promptly waive subrogation or substitute payment, Plaintiff would be forced to wait over two months to receive the third-party tortfeasor money.

13. However, despite Plaintiff’s statements, Defendant failed to waive subrogation or substitute payment, forcing Plaintiff to wait 60 days to receive the third-party liability limits. In doing so, Defendant Allmerica continued to assert that no underinsured motorist coverage was available to Plaintiff under its policy.

14. Throughout the entire pendency of Plaintiff’s underinsured motorist claim, Defendant has asserted that no underinsured motorist benefits coverage exists, as applicable to Plaintiffs claim stemming from his June 2, 2011 motor vehicle accident. As such, to date, Defendant Allmerica has failed to pay any benefits under the policy in question.

15. Plaintiff relied on Defendant Allmerica to properly handle his claim(s) and make payment on the applicable claim(s) pursuant to the aforementioned insurance policy. Plaintiff has met all of the conditions precedent for payment of claims under said insurance policy.

16. Defendant has unreasonably failed and reffised to pay the benefits under the insurance policy.

CAUSE OF ACTION

(As to Defendant Allmerica)

17. Paragraphs 1-16 are incorporated herein by reference.

18. In its handling of Plaintiff’s claim for underinsured motorist benefits under the insurance policy in effect as of June 2, 2011, and as a matter of routing practice in handling similar claims, Defendant Allmerica breached its contractual obligations as well as its duty to deal fairly and in good faith towards Plaintiff in the following respects:

a. Requiring Plaintiff to pursue a claim against another party before he could be entitled to benefits under the policy with Defendant;

b. Unreasonably refusing to waive subrogation or make a proper substitution in relation to the third-party liability limits tendered to Plaintiff;

c. Failing to have knowledge or formal training regarding the terms of its underinsured motorist policy with Plaintiff;

d. Failure to comply with industry standards;

e. Failing to reasonably construe the law applicable to Plaintiffs claim(s) and policy;

f. Attempting to shift the burden of investigation onto Plaintiffs counsel;

g. Unreasonably handling Plaintiffs claim causing Plaintiff to institute unnecessary litigation;

h. Failing to pay Plaintiff the insurance benefits that he was entitled to under the policy at the time when Defendant knew that the Plaintiff was entitled to those benefits;

i. Unreasonably delaying payment of benefits without a reasonable basis;

j. Refusing to pay Plaintiffs claim for reasons contrary to the express provisions of the law;

k. Intentionally and recklessly misapplying the provisions of the insurance policy;

1. Using its unequal wealth and bargaining position to overwhelm and take advantage of the Plaintiff and to effect an economic gain for the Defendant by not paying an amount that it owed by virtue of the insurance contract;

m. Failing to properly investigate the Plaintiffs claim for benefits;

n. Failing to properly evaluate the investigation that was done on Plaintiffs claim for benefits;

o. Failing to adopt and implement reasonable standards for the prompt investigation and handling of claims arising under the policies including the claims of the Plaintiff

p. Failing to attempt to act in good faith to effectuate a prompt, fair settlement for Plaintiffs claim;

19. As a direct result of Defendant Alimerica’ s breach of contract and breach of the implied covenant of good faith and fair dealing, Plaintiff has suffered the loss of his insurance policy benefits, mental and emotional distress, anxiety, embarrassment, medical expenses and financial hardship, all of which are in excess of seventy-five thousand dollars ($75,000).

20. Defendant Ailmerica has acted intentionally, maliciously and in reckless disregard for the rights of the Plaintiff. As a result, the Plaintiff is entitled to recover punitive damages against Defendant Ailmerica for these actions.

WHEREFORE, based on the foregoing, Plaintiff prays that this Court enter judgment against Defendant Ailmerica and grant him the relief sought including, but not limited to, actual damages in excess of Seventy Five Thousand Dollars ($75,000.00), punitive damages in excess of Seventy Five Thousand Dollars ($75,000.00), costs, pre-judgment interest, post-judgment interest, reasonable attorneys fees, and all other relief deemed appropriate by this Court.


ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY’S ANSWER TO FIRST AMENDED PETITION

Defendant, Alimerica Financial Benefit Insurance Company answers Plaintiffs First Amended Petition in numerical sequence as follows:

1. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 1 of Plaintiffs First Amended Petition, therefore they are denied.

2. This Defendant admits that it is a foreign insurance company engaged in business in I, Tulsa County, Oklahoma. This Defendant denies any remaining allegations contained in paraph No. 2 of Plaintiffs First Amended Petition.

3. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 3 of Plaintiffs First Amended Petition, therefore they are den&.

4. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No, 4 of Plaintiffs First Amended Petition, therefore they are denied.

5. This Defendant admits the allegations contained in paragraph No. 5 of Plaintiffs First Amended Petition.

6. Paragraph No.6 of Plaintiffs First Amended Petition contains no factual allegations warranting a response, therefore, none is given.

7. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 7 of Plaintiffs First Amended Petition, therefore they are denied.

8, This Defendant admits that it sold Plaintiff an insurance policy containing uninsured motorist coverage and underinsured motorist coverage. This Defendant is without sufficient information to admit or deny the remaining allegations contained in paragraph No. 8 of Plaintiffs First Amended Petition, therefore they are denied.

9. This Defendant is without information to admit or deny the allegations contained in paragraph No. 9 of Plaintiffs First Amended Petition, therefore they are denied.

10. This Defendant admits the allegations contained in paragraph No. 10 of Plaintiffs First Amended Petition.

11. This Defendant admits the allegations contained in paragraph No. 11 of Plaintiffs First Amended Petition.

12. This Defendant denies the allegations contained in paragraph No. 12 of Plaintiffs First Amended Petition.

13. This Defendant admits the allegations contained in paragraph No. 13 of Plaintiffs First Amended Petition.

14. This Defendant denies the allegations contained in paragraph No. 14 of Plaintiffs First Amended Petition.

15. This Defendant admits the allegations contained in paragraph No. 15 of Plaintiffs First Amended Petition.

16. This Defendant denies the allegations contained in paragraph No. 16 of Plaintiffs First Amended Petition.

17. This Defendant denies the allegations contained in paragraph No. 17 of Plaintiffs First Amended Petition.

18. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No, 18 of Plaintiffs First Amended Petition, therefore they are denied.

19. This Defendant denies the allegations contained in paragraph No. 19 of Plaintiffs First Amended Petition.

20. Paragraph No. 20 of Plaintiffs First Amended Petition does not contained factual allegations warranting a response, therefore no response is provided.

21. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 21 of Plaintiffs First Amended Petition, therefore they are denied.

22. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 22 of Plaintiffs First Amended Petition, therefore they are denied.

23. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 23 of Plaintiffs First Amended Petition, therefore they are denied.

24. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 24 of Plaintiffs First Amended Petition, therefore they are denied,

25. Paragraph No. 25 of Plaintiffs First Amended petition contains no factual allegations warranting a response, therefore no response is provided.

26. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 26 of Plaintiffs First Amended Petition, therefore they are denied.

27. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 27 of Plaintiffs First Amended Petition, therefore they are denied.

28. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 28 of Plaintiffs First Amended Petition, therefore they are denied.

29. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 29 of Plaintiffs First Amended Petition, therefore they are denied.

30. This Defendant is without sufficient information to admit or deny the allegations contained in paragraph No. 30 of Plaintiffs First Amended Petition, therefore they are denied.

31. Paragraph No. 31 of Plaintiffs First Amended Petition contains no factual allegations warranting a response, therefore no response in provided.

32. This Defendant denies the allegations contained in paragraph No. 32 of Plaintiffs First Amended Petition, including all subparts of said paragraph.

33. This Defendant denies the allegations contained in paragraph No. 33 of Plaintiffs First Amended Petition.

34. This Defendant denies the allegations contained in paragraph No. 34 of Plaintiffs First Amended Petition.

35. Paragraph 35 of Plaintiffs First Amended Petition contains no factual allegations warranting a response, therefore no response is provided.

36. This Defendant denies the allegations contained in paragraph No. 36 of Plaintiffs First Amended Petition.

AFFIRMATIVE DEFENSES

1. The damages claim may be the result of the pre-existing conditions, natural causes, or causes not related to the accident in question.

2. This Defendant’s actions were taken in good faith.

3. This Defendant states that there is a legitimate dispute regarding the amount and nature of Plaintiffs damages.

4. An award of punitive damages in this action against this Defendant would violate the due process clauses of the Oklahoma Constitution and the United States Constitution.

5. Plaintiffs Complaint, to the extent that it seeks punitive damages, violates Defendant’s right to both procedural and substantive due process under the Fifth and Fourteenth Amendments to the United States Constitution and the Constitution of the State of Oklahoma in that:

A. The standards under which such claims are submitted are so vague as to be effectively meaningless and threaten the deprivation of property for the benefit of society without the protection of fundamentally fair procedures;

B. The highly penal nature of punitive damages threatens the possibility of excessive punishment and almost limitless liability without the benefit of fundamentally fair procedures and any statutory limitations;

C. The introduction of evidence of financial worth is so prejudicial as to impose liability and punishment in a manner bearing no relation to the extent of injury;

D. Oklahoma Law does not place a reasonable constraint on the jury’s discretion when considering punitive damages;

E. Oklahoma Law does not provide sufficient post-trial procedures and standards, at the District Court level, for scrutinizing a punitive damage award;

F. Oklahoma law is not sufficiently established for adequate appellate review of punitive damage awards.

6. Plaintiffs Complaint, to the extent it seeks punitive damages, violates Defendant’s right to protection from “excessive fines” as provided in the Eighth Amendment of the United States Constitution and the Constitution of the State of Oklahoma.

7. Plaintiffs Complaint, to the extent it seeks punitive damages, violates Defendant’s right to equal protection under the law and is otherwise unconstitutional under the United States Constitution and the Constitution of the State of Oklahoma.

Joint and Several

8. For fhrther defense, if Defendant affirmatively alleges that joint and several liability in unconstitutional and violative of the provisions of the United States Constitution and the Oklahoma Constitution, including but not limited to, Defendants right to due process and equal protection under the law.

WHEREFORE, having hilly answered Plaintiffs First Amended Petition and asserting its Affirmative Defenses, Allmerica Financial Benefit Insurance Company prays that Plaintiffs First Amended Petition be dismissed with prejudice, and that this Defendant be awarded costs and fees expenses herein, and for such other and further relief the Court may deem just and proper.

COMBINED MOTION FOR SUMMARY JUDGMENT AND MOTION TO DISMISS OF DORSEY INSURANCE AGENCY, INC.

The Defendant, Dorsey Insurance Agency, Inc. (“Dorsey”), requests entry, of alternative orders as follows First, because (a) the material facts are uncontroverted in connection with both theories of recovery, breach of contract and fraud, and (b) Dorsey is entitled to judgment as a matter of law, summary judgment should be entered in favor of Dorsey Second, because the Plaintifas not complied with the affidavit of merit requirement set forth in title 12, section 19, of Oklahoma statutes, the case should be dismissed without prejudice. In support of this motion, Dorsey states:

1. The following material facts are uncontroverted:

A. On December 30, 2009, Dorsey prepared on behalf of the Plaintiff an Oklahoma Personal Auto Application that requested the Defendant Alimerica Financial Benefit Insurance Company) (“Ailmerica”) to issue to the Plaintiff a policy of automobile insurance, to be effective January 4, 2010, that contained uninsured motorist coverage benefits in the amount of $25,00.00 per person and $50,000.00 per accident. Exhibit 1

B. The application was signed by the Plaintiff. Id.;

C. As part of the Application, the Plaintiff signed an Oklahoma Auto Supplement which reflected the Plaintiffs decision to purchase (minimum Uninsured Motorist coverage ($25,000 per personl$50,000 per occurrence). Exhibit 2

D. The Supplement was signed by the Plaintiff. Id.;

E. Based on the Application and the Supplement, a policy was issued to the Plaintiff, effective January 4, 2010, by Ailmerica, the declarations page for which reflected that the policy contained UM benefits in the amount of $25,000.00 per person and $50,000.00 per occurrence. Exhibit 3

F. The Declarations page for the policy renewal on July 4, 2010, also reflects that it provided UM benefits in the amounts of $25,000.00 per person and $50,00.00 per occurrence. Exhibit 4

G. The Declarations page for the policy renewal on January 4, 2011, also reflects that it provided UM benefits in the amounts of $25,000.00 per person and $50,00.00 per occurrence. Exhibit 5

H. On June 2, 2011, the Plaintiff was involved in a motor vehicle collision with an uninsured motorist. Exhibit 6 (First Amended petition) at ¶ 6;

1. On May 30, 2012, $25,000.00 in UM benefits was paid to the Plaintiff. Exhibit7

2. The First Amended Petition attempts to set forth a cause of action against Dorsey based on theories of recovery grounded in alleged breach of contract and fraud;

3. Although a single cause of action, under Oklahoma’s “transactional” approach, can be asserted under discrete theories grounded in contract and tort, the essential nature of the alleged breach of duty rests in tort but no affidavit of merit was attached to the First Amended Petition;

4. The Plaintiff should not be able to circumvent the affidavit of merit requirement by simply electing to plead a contract theory;

5. Due to the inherent nature of the duty as one resting in tort, the Plaintiff should be required to elect between his contract and tort theories and be limited in his alleged damages based on the theory of recovery that he chooses;

6. The allegations of fraud are wholly inadequate to comply with the “particularity” requirements of the Pleading Code;

7. Because the Plaintiff can never prevail on the pleaded theories of breach of contract and fraud and, further, because the Plaintiff can never prevail on a theory of alleged professional negligence, he should be denied the opportunity to amend his allegations because, to do so, would be futile.

WHEREFORE, the Defendant Dorsey Insurance Agency, Inc., respectfully requests that this Court render (a) render summary judgment in its favor or (b) dismiss this action and deny the Plaintiff any opportunity to file any further amendment to his pleadings. In the alternative, if the Court denies the dispositve motions, Dorsey Insurance Agency, Inc., requests that this Court enter an order requiring the plaintiff to elect between his inconsistent breach of contract and fraud theories of recovery.

Outcome: COMES NOW the Plaintiff, Lany Sprlggs, by and through his counsel of record, and dismisges any and all ejaims against Defendants, Aihnesica Financial Beneet Insurance Company and Dorsey Insuranco Agency Inc., with prejudice to fliture re-filing, as all issues of law and fact have been resolved.

Plaintiff's Experts:

Defendant's Experts:

Comments: