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Date: 09-10-2012

Case Style: GEICO Casualty Company v. Bill Eisenhour Funeral Homes, Inc.

Case Number: CJ-2011-1171

Judge: Tom A. Lucas

Court: District Court, Cleveland County, Oklahoma

Plaintiff's Attorney: Gerald F. Pignato

Defendant's Attorney: Jack Patrick Walters

Description: GEICO Casualty Company sued Bill Eisenhour Funeral Homes, Inc., Alderwoods Group, LLC, Alderwoods Oklahoma, Inc. and Service Corporation International claiming:

1. Eisenhour is an Oklahoma corporation that does business in Cleveland County, Oklahoma.

2. Eisenhour is a wholly-owned subsidiary of Aldrwoods Oklahoma.

3. Alderwoods Oklahoma is an Oklahoma corporation that does business through its wholly-owned subsidiary, Eisenhour, in Cleveland County, Oklahoma.

4. Alderwoods Oklahoma is a wholly-owned subsidiary of Alderwoods Group.

5. Alderwoods Group is a foreign corporation that does business through its wholly- owned subsidiaries, Alderwoods Oklahoma and Eisenhour, in Cleveland County, Oklahoma.

6. Alderwoods Group is a wholly-owned subsidiary of SCI.

7. SCI is a foreign corporation that does business through its wholly-owned subsidiaries, Alderwoods Group, Alderwoods Oklahoma, and Eisenhour, in Cleveland County, Oklahoma.

8. Upon information and belief, SCI acquired Defendants, Alderwoods Group, Alderwoods Oklahoma and Eisenhour in or around November 2006.

9. GEICO issued a personal automobile insurance policy, policy No. 4020-26-30-10, to its insured, Charles Edward Bellows (“Bellows”), which policy was in effect on June 16, 2006 - December 16, 2006. The GEICO policy issued to Bellows provided liability limits of 25/50.

10. On June 18,2006, Bellows was driving a Suburban that had been leased to Eisenhour, with the permission of Eisenhour and his employer, Alderwoods Oklahoma. Billy Burks, Jr., Billy Burks, Sr., and Glenetta Burks (hereafter “the Burks”), were passengers in the Suburban at the time of the accident, and claimed injuries thereafter as a result of the accident. The Burks’ medical bills, alone, substantially exceed the limited liability coverage available to Bellows under his GEICO policy.

11. The Burks filed a lawsuit against Bellows and Eisenhour in Cleveland County on May 28, 2008. See Case No. CJ-2008-1093 (hereafter the “Burks Lawsuit”). Eisenhour and its parent companies owed Bellows duty of good faith and fair dealing, which duty arose from the special relationship between them. See, Embry v. Innovative Aflermarket Systems, 247 P.3d 1158 (Okla. 2010); Badillo v. Mid-Century mi Co., 121 P.3d 1080, 1101 (Okla. 2005); Wathor v. Mutual Assurance Administrators, Inc., 87 P.3d 559, 562-64 (OkIa. 2004). The duty of Eisenhour and its parent companies, referenced above, included the duty to provide Bellows with a primary defense and to indemnify him from any liability he should incur.

12. Eiseithour and its parent companies rejected Bellows’ demands. Thus, GEICO. as the excess insurer, stepped up to the plate and provided Bellows with the defense that Eisenhour and its parent companies refused to provide.

13. In early June 2011, after repeated demands by Bellows to Eisenhour and its parent companies that they provide Bellows with a defense and agree to indemni& Bellows from any liability he might incur in connection with the Burks’ Lawsuit, Eisenhour and its parent companies reluctantly agreed to provide Bellows a defense, albeit under a reservation of rights, and they reserved their position regarding indemnity until the conclusion of the litigation. At or about the same time, Eisenhour and its parent companies advised GEICO that they would not agree to reimburse GEICO for its fees and expenses incurred in connection with the defense provided to Bellows in the Burks’ Lawsuit. To date, GEICO has incurred approximately $42,000 defending the Burks Lawsuit.

14. Eisenhour affirmatively stated in the course of discovery in Case No. CJ-2008- 1093- L, that it is, for purposes of the June 18, 2006, accident, self-insured. However, a recent deposition taken by Bellows of the designated representative of SCI revealed that these Defendants are insured under an insurance policy issued by AIG that contains a deductible, not a self-insured retention (SIR).

15. The testimony of Defendants’ corporate representative followed the production of documents to Bellows by Eisenhour on March 28, 2011, pursuant to Court order, in the Burks Lawsuit, relating to the AIG policy and insurance program which was apparently in effect from December 31, 2005, to December 31, 2006.

16. The policy identified Alderwoods Group, Inc., as the named insured.

17. Eisenhour was also, by definition, a named insured under the policy.

18. Bellows was also, by definition, an insured under the policy for purposes of the accident of June 18, 2006.

19. By the terms of the policy, the Suburban being driven by Bellows on June 18, 2006, was a covered auto.

20. By the terms of the AIG policy, it is the primary coverage responsible to respond to the accident of June 18, 2006, regardless of the fact Bellows has other coverage.

21. The terms of the policy demonstrate that the Defendants owe a duty to provide a primary defense to Bellows in connection with the claims made against him by the Burks.

22. On information and belief, SQ assumed all liabilities, including any liability for the accident of June 18, 2006, of Defendants, Eisenhour, Alderwoods Group and Alderwoods Oklahoma, at the time it acquired those entities.

23. GEICO seeks equitable subrogation and/or contribution from the Defendants herein by way of the present lawsuit. To date, GEICO has incurred approximately $42,000 in legal fees and related ease expenses in connection with the defense of Bellows in the Burks Lawsuit. Defendants have stated they refuse to reimburse GEICO any part of that.

24. Defendants are primarily responsible for the cost of Bellows’ defense in the Bunts Lawsuit, and are required to reimburse GEICO for what it has incurred. In the unlikely event that Defendants may successfully demonstrate that their AIG policy contains an excess provision, then Defendants are still responsible for theirpro rata share of the legal expenses incurred by GEICO, as well as any settlement or judgment.

25. By virtue of the legal expenses incurred by GEICO to date, GEICO is entitled to equitable subrogation and/or contribution from Defendants, and seeks recovery from Defendants herein.

WHEREFORE, GEICO prays for judgment against the Defendants, Eisenhour, Alderwoods Group, and Alderwoods Oklahoma, for an unspecified sum based on the legal expenses incurred by GEICO to date, together with the costs of this action and a reasonable attorney’s fee. As stated above, to date, GEICO has incurred approximately $42,000 in legal expenses and costs defending Bellows in the Burks Lawsuit.

Defendants responded by filing a motion to dismiss:

Defendants Bill Eisenhour Funeral Homes, Inc. (“EiseiThour Funeral Home”), Alderwoods (Oklahoma), Inc. (“Alderwoods-OK”); Alderwoods Group, LLC (D.E. LLC) (“Alderwoods Group”), and Service Corporation International (“SCI”) (collectively, “Funeral Home Companies” or “Defendants”), request the Court to dismiss Plaintiff GEICO’s Petition for failure to state a legal claim upon which relief can be granted. Plaintiff asks this Court to expand the doctrines of equitable subrogation and equitable contribution beyond the limits established by Oklahoma jurisprudence. The Funeral Home Companies are not insurance companies and Plaintiffs efforts to treat them like insurance companies should be rejected as a matter of law. In support of this Motion, Defendants state as follows:


A. The Under1yin Lawsuit

On June 18, 2006, Plaintiff Charles Bellows was driving home from the lake towing a boat. To his great misfortune, his vehicle was filled with his in-laws (Billy, Sr., Billy, Jr., and Glenetta), but not his wife. For reasons still in dispute, Bellows swerved into oncoming traffic and collided with another driver. To the further misfortune of both Bellows and his in-laws, Bellows’ in-laws claimed injuries and said it was Bellows’ fault. Indeed, in 2008 they sued Bellows in Cleveland County District Court. That case is styled as Billy Burks, Jr., et at. v. Charles Edward Bellows, ci al., CJ-2008- 1093 (the “Underlying Lawsuit”). The in-laws also sued numerous alleged Oklahoma Eisenhour entities in the Underlying Lawsuit. (See Petition in Underlying Lawsuit attached hereto as Exhibit “A”).

All of the Defendants in the current case are or were in the funeral services or “death care” industry. Eisenhour Funeral Home is a funeral home in Cleveland County. GEICO contends that Eisenhour Funeral Home was owned by Alderwoods-OK which, in turn, was owned by Alderwoods Group (collectively “Alderwoods”). Alderwoods Group operated in 36 states, Canada, and Puerto Rico with hundreds of funeral homes and cemeteries. SCI bought Alderwoods. GEICO admits that SCI did not acquire Alderwoods until November 2006, well after the accident (and the acquisition of the insurance policy discussed in the Petition), (See Petition in this case ¶T 8, attached hereto as Exhibit “B”).

All of this is important because when Bellows crashed he was driving a suburban he and GEICO contend “was owned or leased by Eisenhour.” (Petition IT 10).’ For purposes of this Motion to Dismiss, we assume that at the time of the accident the suburban was a vehicle leased to Alderwoods.

The Petition also alleges that GEICO issued a personal automobile insurance policy to Bellows containing liability limits of $25,000 and $50,000. (Petition ¶ 9). GEICO initially assumed the defense of Bellows in the Underlying Lawsuit, Counsel for GEICO in this case also was retained by GEICO to defend Bellows in the Underlying Lawsuit.

Likewise, counsel for GEICO also sued the Defendants in an earlier case on behalf of Bellows claiming these Funeral Home Companies are insurance companies.2 Of course, the Funeral Home Companies are not insurance companies, and Bellows wisely dismissed the Bellows v. Funeral Home Companies case.

As this Court is aware, in the Underlying Lawsuit numerous issues have been litigated, except for the actual tort lawsuit. As a result, the Funeral Home Companies agreed to assume the defense of Bellows in that case so the Burks’ tort claims could be litigated rather than efforts to gin-up a bad faith case against the non-insuring Funeral Home Companies.3

B. This Lawsuit

GEICO now brings this action (on largely the same theories as Bellows’ dismissed lawsuit) trying once again to treat the Funeral Home Companies like insurance companies and get back all of the money it paid for “defending” Bellows. Notwithstanding its issuance to Bellows of a standard automobile liability policy, GEICO deems itself to be an “excess insurer” in the Underlying Lawsuit. (Petition ¶j 12). GEICO claims the Funeral Home Companies are supposed to pay its attorney fees under theories of equitable subrogation and perhaps equitable contribution. Because GEICO merely gloms together all of its allegations with irrelevant factual allegations it is difficult to tell what theory it wants to proceed on. Regardless, none of these claims sounds against the Funeral Home Companies.


A. Standard on Motion to Dismiss

Okia, Stat. tit. 12, § 2008(A)(1) requires “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Dismissal is appropriate where a plaintiffs petition shows the lack of any cognizable legal theory to support the claim or for insufficient facts under a cognizable theory. Miller v. Miller, 1998 OK 24, 956 P.2d 887. A plaintiffs obligation to provide the grounds of entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. See Blair v. Orthopedic Institute, ci al., Case No. 105,358 at pp. 6-7 (OkIa. Civ. App., Mar. 7, 2008), attached hereto as Exhibit “C” (citing Fapasan v. Allain, 478 U.S. 265, 286 (1986)). “On a motion to dismiss, courts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.” See Exhibit “C” at p. 7. “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. (citing 5 C. Wright & A. Miller, FEDERAL PRACTICE & PROCEDURE § 1216, pp. 235-36 (3d ed. 2004)). Section 2008(A)(1) requires a “showing” rather than a blanket assertion of entitlement to relief. See Blair, at p. 7 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)). Judged against these standards, Plaintiffs Petition fails to state a claim upon which relief may be granted.

B. Plaintiff Has Failed To State A Claim For Equitable Subrogation.

GEICO’s Petition throws disparate and irrelevant facts together and labels them “equitable subrogation” or, maybe, “equitable contribution.” Under these inapplicable doctrines, GEICO claims the Funeral Home Companies should have acted like an insurance company and paid Bellows’ defense costs in the Underlying Lawsuit. As shown below, this contention is disproved by the allegations in the Petition.

1. There Is No Duty Of Good Faith And Fair Dealing Between Bellows and The Funeral Home Companies; Therefore, There Can Be No Subrogation Claim Based On A Breach Of That Duty.

The Oklahoma Supreme Court has clearly defined a claim for equitable subrogation in the insurance context as allowing “an insurer who has paid coverage to stand in the shoes of the insured and pursue recovery from a third party primarily responsible for the insured’s loss which the insurer both insured and reimbursed.” United States Fidelity and Guaranty Co. (“USF&G”) v. Federated Rural Elec. Ins. Corp., 2001 OK 81, ¶110, 37 P.3d 828, 831(emphasis supplied). The court further defined the doctrine as follows:

Equitable subrogation between insurers is commonly used as a vehicle to shift defense costs between primary and excess insurers. In its application the doctrine generally works to shift costs from the excess insurer to the primary insurer, because the primary insurer is primarily responsible to defend the insured, and the excess insurer usually has the superior equitable position.

Id.atJ 11, 37 P.3d at 832.

Of course, the Funeral Home Companies are not insurance companies and they have no duty to defend. GEICO contends that it is “standing in the shoes” of its insured, Bellows, seeking his costs of defense against the Funeral Home Companies. (Petition ¶ 11). Of course, Bellows must have a cause of action against the Funeral Home Defendants before GEICO can stand in his shoes. GEICO pleads that the Funeral Home Companies “owed Bellows duty of good faith and fair dealing, which duty arose from the special relationship between them.” (Id.).

These allegations have no merit. GEICO admits that the only relationship between the Funeral Home Companies and Bellows was his status as an employee of Defendant Alderwoods Oklahoma. (Id. ¶110). Oklahoma law is clear that there is no duty of good faith and fair dealing between an employer and his at-will employee. Burks v. K-Mart Corp., 1989 OK 22, ¶117, 770 P.2d 24; Kruchowski v. Weyerhaeuser Co., 2008 OK 105, ¶1 7, 202 P.3d 144, 148.

Further, GEICO pleads absolutely no contractual relationship between the Funeral Home Companies and Bellows, because none exists, Even the eases cited by GEICO show there can be no claim for breach of the duty of good faith and fair dealing (and therefore no subrogation to such a claim) where there is no contract between the parties. GETCO’s reference to a “special relationship” between Bellows and the Funeral Home Companies is based on Embrey v. Innovative Aftermarket Sys., 2010 OK 82, ¶IT 1-2, 247 P.3d 1158, 1160, where the Supreme Court of Oklahoma stated “such liability depends upon the existence of a ‘special relationship’ under a coHtract . .“ (emphasis supplied). The court specifically required the existence between the parties of an “adhesion contract.” Id. Where, as here, there is no contract between Bellows and the Defendants, there is no duty of good faith and fair dealing.

Equitable subrogation is a “derivative” claim. USF&G, 2001 OK 81, ¶ 9, 37 P,3d at 831. GEICO’s attempt to stand in the shoes of Bellows to assert a non-existent claim for breach of the duty of good faith and fair dealing fails as a matter of law.

2. The Funeral Home Defendants Are Not Insurance Companies and Do Not Owe To GEICO or Bellows The Duties OfAn Insurance Company.

GEICO’s Petition implies (but does not directly plead) that the Funeral Home Companies are bound to perform the terms of an insurance policy they have with American Home Assurance Company as if they are the actual insurance company. This is nonsensical and has never been accepted by an Oklahoma court, GEICO’s Petition references a policy that was issued to Defendant Alderwoods Group by American Home Assurance Company (“American Home”) and is attached (with Oklahoma endorsements) hereto as Exhibit “D.” The policy has a limit of liability in the amount of $2,000,000 and a deductible of $2,000,000. In the parlance of commercial insurance, this is called a “fronting policy.” The Oklahoma Supreme Court has not addressed fronting policies.

However, a description by the Supreme Court of South Carolina is widely cited by courts and commentators: “Fronting policies” and related forms of partial self-insurance have become prevalent since the 1980’s due to increases in insurance premiums. A fronting policy, of which there are various forms, is one or more steps removed from true self-insurance. It has been defined as a legal risk management device, typically used by large corporations operating in multiple states, in which the corporation pays a discounted premium to the insurer. The insurer maintains licensing and filing capabilities in a particular state or states, and issues an insurance policy covering the corporation in order to comply with the insurance laws and regulations of each state.

The corporation retains at least part of the risks covered under the fronting policy. One such means of retaining the risk, as seen in the present case, is by a deductible which equals the policy’s liability limits. The insured usually is left to administer all claims, although the insurer may reserve this authority to itself in some instances. The insured agrees to reimburse the insurer for all payments it must make. Croft v. Old Republic Ins. Co., 618 S.E.2d 909, 915 (S.C. 2005). “In a fronting policy, ‘[tJhe insurer functions purely as a surety for the insured’s ability to pay claims and the benefit extends only to third parties in situations in which the policy holder is unable to pay a liability owed to a third party.” Id.

The policy in this case is the same as the one described in Croft. Under the American Home policy, Alderwoods was required to reimburse American Home for any claims or expenses American Home incurred in covering a risk. While the policy provides protections for third-party claimants in the event Alderwoods went bankrupt, Alderwoods was on the hook for any loss. Different courts have applied different labels to a fronting arrangement, such as “practical self-insurance,”“limited self-insurance,” or a “surety agreement.” GEICO’s allegation, however, that the Defendants are bound to the Home Assurance policy as if they are the insurers and not the insured is not supported in the law.

GEICO’s implied allegation that the Funeral Home Companies are de facto insurers based on the American Home policy has repeatedly been rejected as nonsense by the courts. The “fronting policy” renders the Funeral Home Companies effectively self-insured not subject to duties of an insurer. MacDonald v. Pac. Employers Ins. Co., 264 F. Supp. 2d 576, 582 (N.D. Ohio 2002). “The allegation of self-insurance, which is equivalent to no insurance, is repugnant to the concept of insurance which flindamentally involves the shifting to a third party, by contract, for a consideration, the risk of loss as a result of an incident or event.” See Richardson v. GAB Business Services, Inc., 207 Cal. Rptr. 519, 523 (Cal. App. 5th Dist. 1984) (“an allegation of being self-insured (noninsured) is totally inconsistent with an allegation of being engaged in the business of insurance.”). “It is axiomatic that self-insurance is not insurance.” C/iambi v, Regents of the University of Cal Ubrnia, 116 Cal. Rptr. 2d 50, 53 (Cal. App. 4th Dist. 2002). As another court stated: “Self-insurance is the antithesis of insurance. Insurance shifts the risk of loss from the insured to the insurer. A self-insurer retains the risk of loss imposed by law or contract.” MacDonald v. Pac. Employers Ins. Co., 264 F. Supp. 2d 576, 582 (N.D. Ohio 2002) (quoting McCollum v. Continental Ins. Co., 1993 WL 382455, at * 4 (Ohio App. 6 Dist. April 9, 1993)).

An insured under a fronting policy does not indemnify others from claims or assume a duty to defend. Delphi Auto. Systems, LLC v. Slaughter, 261 F. Supp. 2d 950, 955 (S.D. Ohio 2003) (fronting insured was practical self-insurer and therefore was not subject to the duties of an insurer); 43 Am. Jur. 2d Insurance § 20 (“Self-insurance is the equivalent of no insurance. This is because if insurance requires an undertaking by one to indemnify another, it cannot be satisfied by a self-contradictory undertaking by one to indemnify oneself.”). Therefore, the Petition’s allegation that Defendants are the actual insurers of Bellows’ injury to a third party is nonsensical and contrary to law. While Oklahoma courts have not addressed these issues directly, the available case law is entirely inconsistent with treating a front-insured as an insurer. In McSorley v. Hertz Corp., 1994 OK 120, 885 P.2d 1343, 1348 & n. 27, the court found that Hertz self-insured against losses and the plaintiff renter failed to purchase insurance made available by Hertz. The plaintiff argued that Hertz was selling insurance and therefore had a duty to offer uninsured motorist coverage. The court held that “[w]here no policy exists, uninsured motorist does not arise by operation of law.” Id. In reaching its holding, the court stated that “[i]nsurance is a contract and the relationship between the insured and an insurer is contractual in nature. ... Self-insurance, on the other hand, is the assumption of risk of loss by one having an insurable interest.” Id. at n.27. Further, the court stated: “The fact that a self-insurer is financially responsible for its own vehicles or their operators does not transform it into an insurer as contemplated by the insurance code.” Id. at 1350 (emphasis supplied); see also Budget Rent A Car Systems, Inc. v. Taylor, 626 So.2d 976, 978 (Fla. App. Ct. 4th Dist. 1993) (Budget’s status as a self-insurer does not make it an “insurer” under Florida law.). Further, Oklahoma law specifically defines an “insurer” as “every person engaged in the business of making contracts of insurance or indemnity.” McMullan v. Enterprise Fin. Group., 2011 OK 7, 247 P.3d 1173, 175 (quoting 36 OS. § 103(a)). “Insurance” is a “contract whereby one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.” Id. (quoting 36 OS. § 102). GEICO has not and cannot in good faith plead that the Funeral Home Companies are in the business of making contracts of insurance. Likewise, GE1CO has not and cannot in good faith plead that the Funeral Home Companies entered into a contract whereby they were to indemnify Bellows. There is nothing in the American Home policy which obligates Alderwoods to assume the liability of Bellows or to defend him. Indeed, Alderwoods is the insured under the American Home policy, not the insurer. GEICO’s equitable subrogation claim must be dismissed.

C. GEICO Has Failed To Plead A Claim For Equitable Contribution

GEICO appears to make an alternative claim for equitable contribution. (Petition IT 23). As set forth above, the Funeral Home Companies are not insurance companies who contractually assumed duties to indemnify and defend and therefore there can be no claim for equitable contribution.

Equitable contribution is the right to recover, not from the party primarily liable for the loss, but from a co-obligor or co-insurer who shares common liability with the party seeking contribution. The doctrine applies only when co-insurers have covered the same insured and the same particular risk at the same level of coverage. USF&G, 2001 OK 81, ¶ 13, 37 P.3d at 832. The Funeral Home Companies are not insurers and they have no contractual or other relationship with Bellows making them “co-obligors or eoinsurers” with GEICO. As such, there can be no contribution duty to reimburse GEICO for the attorney fees and costs GEICO paid, as a matter of law.

Regardless, even if the Funeral Home Companies had a duty to defend, there is no cause of action under Oklahoma law for a claim for equitable contribution based on the duty to defend seeking to recover attorney fees and costs. Fidelity & Cas. Co. of N Y v. Ohio Cas. Ins. Co., 1971 OK 31, 482 P.2d 924, 926. There, the Supreme Court of Oklahoma held: “It is our conclusion, absent a specific contractual right, that Fidelity had no right to contribution from Ohio for expenses incurred by Fidelity in defending the Clark lawsuit.” Id. The court agreed that the two insurers’ duties to the insured were separate as between the two companies and “distinct from and in addition to the insuring agreement pertaining to liability.” Id. (quoting USF&G v. Tn-State Ins. Co., 285 F.2d 579 (10th Cir. 1960)). “The duty to defend is personal to each insurer. The obligation is several and the carrier is not entitled to divide the duty nor require contribution from another absent a specific contractual right.” Id.

This holding was reaffirmed in a published decision of the Oklahoma Court of Civil Appeals in USAA v, State Farm Fire & Cas. Co., 2005 OK CIV APP 21, lilT 15-16, 110 P.3d 570. There, the court of appeals again held that one insurance company could not enforce the duty to defend against another insurance company on the same risk using a claim of equitable contribution. As such, GEICO’s equitable contribution claim against the non-insuring Funeral Home Companies must be dismissed.

D. Even If The Court Believes GEICO Has Stated A Claim Sufficient To Survive A Motion to Dismiss, The Case Should Be Dismissed Or Stayed Until The Conclusion Of The Underlyin2 Action.

GEICO asks this Court to order the Funeral Home Defendants to either pay all defense costs and fees GEICO has incurred or to pay their pro rata share of the defense costs under the American Home Policy. Even if GEICO had stated a cause of action (which it has not), this case cannot be resolved without the resolution of the Underlying Lawsuit. As a result, the allegations in this case are premature and not ripe for resolution, and this case should be dismissed or stayed pending resolution of the Underlying Lawsuit.

The attorneys retained by GEICO to represent Bellows have not withdrawn from the underlying case and continue to incur attorney fees, notwithstanding the fact that the Funeral Home Defendants retained separate, independent counsel for Bellows. (See Docket Sheet attached hereto as Exhibit “E”). Further, the Oklahoma Supreme Court in Equity Mutual v. Spring Valley Wholesale Nursery, Inc., 1987 OK 121, 747 P.2d 947, set forth the formulas to determine how co-insurers must split costs. Under this rubric, GEICO alternatively asks that the fees be split pro rata between GETCO and the Funeral Home Companies.

A pro rata apportionment of the obligation to pay fees means that each insurer must pay in accordance with its limit of liability. For example, if GEICO had $10 limits of liability and the Funeral Home Companies had $90 limits of liability, GEICO would pay 10% of the fees and the Funeral Home Companies would pay 90% of fees. Of course, this pro rata proportion of fees each would have to pay cannot be determined until all fees and expenses have been incurred in the defense of Bellows. The Underlying Lawsuit does not go to trial until January 30, 2012 (See Amended Agreed Order Regarding Charles Bellows’ Application for Extension of Deadlines attached hereto as Exhibit “F”). The amount of fees could not be determined or apportioned until the conclusion of the action. This action, therefore, is premature and is not ripe for resolution. Indeed, because the parties continue to incur fees in Bellows’ defense, any determination at this point likely would be subject to future amendment after the Underlying Case is resolved. As a result, this case should be dismissed or stayed.


The foregoing considered, the Petition should be dismissed with prejudice or, at a minimum stayed pending resolution of the Underlying Lawsuit.

Outcome: The parties hereto have requested the Court to enter an Order in this case dismissing all claims, cross-claims, counterclaims and third-party claims with prejudice as to the refiling of same.

IT IS THEREFORE ORDERED that this case and all claims asserted herein are hereby dismissed with prejudice and each partyill bear their own costs and attorney fees.

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