# Saxon

> District Court, W.D. Oklahoma · March 30, 2026

URL: https://www.frixlaw.com/law-library/cases/11305862

## Case

- **Full name:** Lauren Saxon and Charles Saxon v. Safeco Insurance Company of America, et al.
- **Court:** District Court, W.D. Oklahoma
- **Decided:** March 30, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11305862

## How later opinions describe it (automated extraction)

- concluding insured is liable for an adjuster’s mishandling of claims via its duty of good faith
- explaining a dispute about a material fact is “genuine” “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA

LAUREN SAXON and CHARLES SAXON, )
)
Plaintiffs, )
)
v. ) Case No. CIV-24-00714-JD
)
SAFECO INSURANCE COMPANY OF )
AMERICA, et al., )
)
Defendants. )

ORDER
Before the Court is Defendant American Economy Insurance Company’s
(“AEIC”) Motion for Summary Judgment (“Motion”). [Doc. No. 34]. Plaintiffs Lauren
Saxon and Charles Saxon (collectively “Plaintiffs”) filed a Response. [Doc. No. 51].
AEIC filed a Reply. [Doc. No. 55]. For the reasons outlined below, the Court grants in
part and denies in part the Motion.
I. MATERIAL UNDISPUTED FACTS
Plaintiffs have an AEIC insurance policy (“the Policy”) covering their home.
[Doc. No. 34 ¶ 1; Doc. No. 51 ¶ 1].1 Plaintiffs submitted a claim under the Policy related
to storm damage to their house and subsequent damage related to the remediation of the

1 In Plaintiffs’ Response, they have two sections of facts, both broken into
paragraphs. To indicate citation to Plaintiffs’ Responses to AEIC’s Statement of Material
Facts, the Court will cite to the paragraph number alone. To indicate citation to Plaintiffs’
Statement of Additional Material Facts, the Court will cite to the page number, followed
by the paragraph number.
When the Court cites to a page number in this order, it will use page numbering
from the CM/ECF stamp at the top of the filing on the district court docket.
damage. [Doc. No. 34 ¶ 2; Doc. No. 51 ¶ 2]. A wind and hailstorm caused a tree to fall on
the roof of Plaintiffs’ house. [Id.].
This lawsuit pertains to three areas of damage to Plaintiffs’ house. First, the tree

that fell onto Plaintiffs’ house damaged the roof. Second, the mitigation of water damage
within Plaintiffs’ house by a third party caused additional damage. Third, following the
storm that damaged Plaintiffs’ house, Plaintiffs’ HVAC controller caught fire and ceased
working. Additionally, Plaintiffs’ claims relate to Additional Living Expense Coverage
under the Policy.

A. The damage to Plaintiffs’ roof
Following the wind and hailstorm, AEIC received a report that a tree had
penetrated the roof, insulation, and drywall of Plaintiffs’ house; the house did not have
power; and the house was uninhabitable. [Doc. No. 34 ¶ 9; Doc. No. 51 ¶ 9]. AEIC
inspected Plaintiffs’ roof and provided a report reflecting the results of the inspection.

[Doc. No. 34 ¶¶ 26–27; Doc. No. 51 ¶¶ 26–27]. The report indicated tree-related damage
on the back and left slopes of the home and did not find wind or hail damage to the roof.
[Doc. No. 34 ¶ 27; Doc. No. 51 ¶ 27].
After receiving AEIC’s estimate for repairs to the roof, Plaintiffs’ contractor called
AEIC’s adjuster, Lenore Chiarello, and stated that the roof had more damage than

reflected in AEIC’s estimate. [Doc. No. 34 ¶ 37; Doc. No. 51 ¶ 37]. Chiarello asked the
contractor to send his estimate and supporting information. [Id.]. Plaintiffs sent AEIC an
estimate that included a total roof replacement with removal and replacement of all roof
decking. [Doc. No. 34 ¶ 47; Doc. No. 51 ¶ 47]. The estimate for repairing the roof was
$38,313.44. [Id.]. Chiarello reviewed photographs submitted by Plaintiffs’ contractor in
support of the estimate and concluded the evidence did not support a full roof
replacement. [Doc. No. 34 ¶ 53; Doc. No. 51 ¶ 53]. AEIC’s estimate ultimately included

$16,925.87 to repair Plaintiffs’ roof. [Doc. No. 34 ¶ 56; Doc. No. 51 ¶ 56].
Plaintiffs requested a second inspection of their roof, noting they did not believe
AEIC had anyone get on their roof. [Doc. No. 34 ¶ 58; Doc. No. 51 ¶ 58]. AEIC
coordinated a second inspection. [Doc. No. 34 ¶ 59; Doc. No. 51 ¶ 59]. The report from
the second inspection stated that the inspection did not reveal wind or hail damage and

noted prior repairs that demonstrated Plaintiffs had repaired damage from the fallen tree.
[Doc. No. 34 ¶ 60; Doc. No. 51 ¶ 60].
During the recent sale of Plaintiffs’ house, the buyer provided Plaintiffs with an
estimate of $16,995 for full replacement of their roof and a roof inspection report, which
stated that the roof was at the end of its functional life. [Doc. No. 34 ¶¶ 67–68; Doc. No.

51 ¶¶ 67–68].
B. Asbestos damage related to water mitigation
Following the storm that damaged Plaintiffs’ house, AEIC contacted Stanley
Steemer International, Inc. (“Stanley Steemer”) to assist with moisture mitigation inside
Plaintiffs’ house. [Doc. No. 34 ¶ 11; Doc. No. 51 ¶ 11]. Stanley Steemer reported that the

home was built in 1957; the home was recently remodeled, thus alleviating asbestos
concerns; and emergency mitigation would begin once the power to the home was
restored. [Doc. No. 34 ¶ 13; Doc. No. 51 ¶ 13]. After inspection, AEIC’s adjuster
reported the following interior damage: damage to drywall, insulation, and rafters in the
attic; damage to plaster in a second story bedroom; and water damage to the ceiling in the
primary bedroom and nursery on the first floor. [Doc. No. 34 ¶ 20; Doc. No. 51 ¶ 20].
The adjuster estimated a total of $22,828.54 to repair the damage to the interior. [Doc.

No. 34 ¶ 22; Doc. No. 51 ¶ 22]. After applying recoverable depreciation and Plaintiffs’
deductible, AEIC issued a payment for $11,555.67. [Id.].
During the remediation process, Stanley Steemer cut out fifty-six square feet of
ceiling in the primary bedroom. [Doc. No. 34 ¶ 23; Doc. No. 51 ¶ 23]. Plaintiffs informed
AEIC that Stanley Steemer had removed the ceiling without testing for asbestos. [Doc.

No. 34 ¶ 38; Doc. No. 51 ¶ 38]. Plaintiffs hired someone to test for asbestos, and the
house tested positive for asbestos. [Id.]. Plaintiffs’ contractor subsequently emailed the
adjuster (1) a letter from Earth Tech Enterprises, Inc. stating that it had performed air
monitoring and all samples were below the detectable limit for asbestos, and (2) a quote
for asbestos remediation. [Doc. No. 34 ¶ 40; Doc. No. 51 ¶ 40]. Plaintiffs also sent the

adjuster a list of personal property that asbestos had contaminated. [Doc. No. 34 ¶ 42;
Doc. No. 51 ¶ 42]. AEIC issued payments to Plaintiffs of $425 for asbestos testing and
$12,745 for asbestos abatement. [Doc. No. 34 ¶ 46; Doc. No. 51 ¶ 46].
Regarding Plaintiffs’ personal property, Stanley Steemer communicated to AEIC
that they covered all of Plaintiffs’ personal property before removing the ceiling. [Doc.

No. 34 ¶ 57; Doc. No. 51 ¶ 57]. They also stated they ran air scrubbing in the work area.
[Id.]. Stanley Steemer declined to accept liability for Plaintiffs’ personal property. [Id.].
AEIC denied coverage for Plaintiffs’ claim for their personal property because Stanley
Steemer’s improper workmanship caused the loss. [Doc. No. 34 ¶ 65; Doc. No. 51 ¶ 65].
C. Damage to Plaintiffs’ HVAC
Plaintiffs notified AEIC that their HVAC unit was not working. [Doc. No. 34 ¶ 16;
Doc. No. 51 ¶ 16]. An electrician told Plaintiffs that the electrical portion of the unit was

“shorting out.” [Id.]. The inspection report of Plaintiffs’ HVAC unit found that the cause
of the unit’s failure was “wear and tear.” [Doc. No. 34 ¶ 30; Doc. No. 51 ¶ 30]. The
report concluded that the system did not fail due to a high voltage surge, lightning, or
something similar. [Id.]. The report estimated repairs for the unit to cost $1,592.48. [Id.].
Defendant’s adjuster drafted a letter and notified Plaintiffs that they would not cover the

HVAC repair because of an uncovered cause of loss. [Doc. No. 34 ¶¶ 31–32; Doc. No. 51
¶¶ 31–32].
Plaintiffs subsequently requested coverage of the HVAC unit, asserting that a
report from Tulsa Air Specialists indicated a power surge did cause the damage. [Doc.
No. 34 ¶ 44; Doc. No. 51 ¶ 44]. The report estimated the cost of repair to be $2,162. [Id.].

Plaintiffs provided the report for AEIC’s review. [Doc. No. 34 ¶ 62; Doc. No. 51 ¶ 62].
AEIC reviewed the report and provided a supplemental opinion that wear and tear caused
the burned wires referenced in the Tulsa Air Specialists’ report. [Doc. No. 34 ¶ 63; Doc.
No. 51 ¶ 63]. AEIC then advised Plaintiffs, again, that they would not cover repairs to the
HVAC unit. [Doc. No. 34 ¶¶ 64–65; Doc. No. 51 ¶¶ 64–65].

D. Additional Living Expense Coverage
The Policy contained an Additional Living Expense Coverage, which provides
coverage for necessary living expenses incurred as a result of a covered loss rendering the
residence or a portion of the residence unhabitable. [Doc. No. 34 ¶ 8; Doc. No. 51 ¶ 8].
As discussed above, when AEIC first learned of the damage to Plaintiffs’ house,
the house did not have power and was uninhabitable. [Doc. No. 34 ¶ 9; Doc. No. 51 ¶ 9].
The storm that initially damaged Plaintiffs’ home occurred on June 17, 2023. [Doc. No.

34 ¶ 2; Doc. No. 51 ¶ 2]. On June 22, 2023, AEIC received a report that the power was
back on at Plaintiffs’ house but that Plaintiffs were out of town until June 26. [Doc. No.
34 ¶ 15; Doc. No. 51 ¶ 15]. On July 24, 2023, AEIC received an email from the vendor
assigned to assist Plaintiffs with alternate living accommodations stating that Plaintiffs
had been unresponsive to their attempts at contact. [Doc. No. 34 ¶ 36; Doc. No. 51 ¶ 36].

On September 25, 2023, a third-party vendor assigned to set up alternate living
accommodations for Plaintiffs also communicated to AEIC that Plaintiffs had been
unresponsive. [Doc. No. 34 ¶ 52; Doc. No. 51 ¶ 52].
II. BACKGROUND
Plaintiffs initiated this lawsuit in the District Court of Oklahoma County against

Defendants AEIC, Safeco Insurance Company of America (“Safeco”), Liberty Mutual
Insurance Company (“Liberty”), and Stanley Steemer.2 [Doc. No. 1-1]. AEIC removed
the case to this Court based upon diversity jurisdiction. [Doc. No. 1]. Plaintiff brings
claims of breach of contract and breach of the duty of good faith and fair dealing against

2 Plaintiffs’ claims against Safeco and Liberty are based on alter ego liability and
are subject to a separate motion for summary judgment. [See Doc. No. 1-1 ¶ 2 (“[T]he
separation between these entities may be disregarded and treated as one for the purpose
of breach of contract and bad faith.”). Plaintiffs settled their claims against Stanley
Steemer. [Doc. Nos. 58, 60].
AEIC and requests punitive damages. [Doc. No. 1-1 ¶¶ 31–44; id. ¶ 50 (punitive
damages)].
Plaintiffs’ claims relate to the following alleged breaches by AEIC. First, Plaintiffs

claim that AEIC breached the Policy by failing to replace their entire roof. [Id. ¶ 25].
Additionally, Plaintiffs argue that AEIC’s coverage of only a partial roof replacement
breaches the Policy’s coverage for Matching Undamaged Siding, Roofing, and Windows
(“the Matching Provision”) because the partial replacement “left the remainder of the
roof in a condition that does not match at all with the repaired portion of the Plaintiffs’

roof.” [Id. ¶ 26]. Second, Plaintiffs claim AEIC breached the Policy by failing to replace
Plaintiffs’ personal property contaminated by asbestos due to Stanley Steemer’s water
remediation efforts. [Id. ¶ 23]. Third, Plaintiffs state AEIC breached the Policy by failing
to pay for repairs to Plaintiffs’ HVAC unit. [Id. ¶ 24]. Lastly, Plaintiffs assert that AEIC
breached the Policy by failing to provide them Additional Living Expense benefits. [Id.

¶ 27]. Plaintiffs urge that AEIC’s breaches of the Policy constitute bad faith. [See id.
¶ 29].
III. STANDARD OF REVIEW
Summary judgment shall be granted “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). “An issue of fact is material if under the substantive law it is
essential to the proper disposition of the claim.” Savant Homes, Inc. v. Collins, 809 F.3d
1133, 1137 (10th Cir. 2016) (citation modified); see also Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986) (“Only disputes over facts that might affect the outcome of the
suit under the governing law will properly preclude the entry of summary judgment.”). A
dispute about a material fact is genuine if a rational trier of fact could find in favor of the
nonmoving party on the evidence presented. Fassbender v. Correct Care Sols., LLC, 890

F.3d 875, 882 (10th Cir. 2018); see also Anderson, 477 U.S. at 248 (explaining a dispute
about a material fact is “genuine” “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party”).
In applying this standard, the Court “review[s] the facts and all reasonable
inferences those facts support[ ] in the light most favorable to the nonmoving party.” Doe

v. Univ. of Denver, 952 F.3d 1182, 1189 (10th Cir. 2020) (second alteration in original)
(quoting Evans v. Sandy City, 944 F.3d 847, 852 (10th Cir. 2019)). “While we view the
record in the light most favorable to the party opposing summary judgment, ‘the
nonmoving party may not rest on its pleadings but must set forth specific facts showing
that there is a genuine issue for trial as to those dispositive matters for which it carries the

burden of proof.’” Phillips v. Calhoun, 956 F.2d 949, 950 (10th Cir. 1992) (quoting
Applied Genetics Int’l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.
1990)). Ultimately, review of a district court’s ruling on summary judgment is “from the
perspective of the district court at the time it made its ruling, ordinarily limiting . . .
review to the materials adequately brought to the attention of the district court by the

parties.” SEC v. GenAudio Inc., 32 F.4th 902, 920 (10th Cir. 2022) (citation omitted).
IV. ANALYSIS
A. The Court grants in part and denies in part AEIC’s Motion regarding
Plaintiffs’ breach of contract claim.

The Court begins by analyzing whether AEIC is entitled to summary judgment on
Plaintiffs’ breach of contract claim. To do so, the Court must examine each basis for
AEIC’s alleged breach: (1) the failure to provide a full roof replacement, (2) the denial of
Plaintiffs’ claim for personal property with asbestos damage, (3) the denial of Plaintiffs’
claim for repairs to their HVAC unit, and (4) the failure to advise Plaintiffs of Additional
Living Expense benefits under the Policy.
Because the Court’s subject matter jurisdiction is based upon diversity, the Court
applies Oklahoma law to Plaintiffs’ claims. Renfro v. Champion Petfoods USA, Inc., 25

F.4th 1293, 1301 (10th Cir. 2022) (“In a case based on federal diversity jurisdiction, the
law of the forum state governs.”). To establish that AEIC breached the Policy, Plaintiffs
must prove: “(1) formation of a contract; (2) breach of the contract; and (3) damages as a
direct result of the breach.” Digit. Design Grp., Inc. v. Info. Builders, Inc., 2001 OK 21,
¶ 33, 24 P.3d 834, 843. “The interpretation of an insurance contract and whether it is

ambiguous is a matter of law for the Court to determine and resolve accordingly.”
Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 12, 812 P.2d 372, 376. When a provision is
clear, consistent, and unambiguous, the Court will accept its plain and ordinary meaning,
and the contract will be enforced to carry out the intentions of the parties. Id. Here, the
parties do not assert that the Policy is ambiguous or that any of the terms require the
Court’s interpretation.
1. Coverage for Plaintiffs’ roof repairs

The Court begins with Plaintiffs’ claim that the coverage AEIC provided for
repairs to Plaintiffs’ roof constitutes a breach of the Policy. Plaintiffs argue that AEIC’s
handling of the claim constituted a breach in two ways. First, AEIC’s refusal to provide
coverage for a full roof replacement constitutes breach. [Doc. No. 51 at 16, ¶ 28; id. at
25]. Second, AEIC breached the Matching Provision of the Policy. [Id. at 16, ¶ 27; id. at
25].

Regarding coverage for the roof repairs, the parties do not dispute that the Policy
covered the damage inflicted upon Plaintiffs’ roof but instead dispute the extent of repairs
needed to remediate that damage. [See Doc. No. 34 at 21 (“Damage to the roof and
interior of the home caused by a tree felled by a windstorm are within the category of
covered accidental direct physical loss to the property.”)]. On one hand, AEIC contends

that they provided adequate coverage to repair the roof. AEIC paid Plaintiffs $16,925.87
to repair their roof. [Doc. No. 34-26 at 7 (estimated cost of covered repairs)]. Although
AEIC based that amount upon the adjuster’s conclusion the roof did not warrant a full
replacement, AEIC contends that amount was adequate, even if Plaintiffs desired a full
roof replacement, because Plaintiffs paid a similar amount to replace the roof when they

sold the house in 2025. [Doc. No. 34-2, Claim Notes, at 3–4, Sept. 26, 2023 entry
(summarizing basis for concluding full roof replacement was not necessary); Doc. No.
51-1, Lauren Saxon Dep. at 21–22, 257:17–258:11]. On the other hand, Plaintiffs’
contractor estimated $38,313.44 to repair Plaintiffs’ roof, which included a full roof
replacement. [Doc. No. 34-20 at 9 (Sparks, Inc.’s estimate of repairs)]. Accordingly, a
genuine issue of material fact exists regarding the adequate amount of coverage to repair
Plaintiffs’ roof, and the Court denies summary judgment on this issue.

Turning next to the Matching Provision in the Policy, Plaintiffs contend that AEIC
did not provide adequate coverage to comply with the terms of this provision. [Doc. No.
51 at 24–25]. The Matching Provision provides that AEIC will provide coverage to
address a mismatch in roof surfacing due to repair of a covered loss. [Doc. No. 34-1, the
Policy, at 48]. Plaintiffs provide evidence that the repairs to the roof resulted in a

mismatch of roof surfacing that ultimately required them to replace the entire roof. [Doc.
No. 51 at 15, ¶ 26, Doc. No. 51-2, Hancock Report, at 3]. The issue is whether AEIC
complied with the terms of the Policy:
20. Matching of Undamaged Siding, Roof Surfacing, and/or Windows

We will pay, up to the amount shown in your Policy Declarations, for the cost you
incur to replace the existing undamaged siding, roof surfacing, and/or windows
due to mismatch between the existing undamaged siding, roof surfacing, and/or
windows on the dwelling or other structure(s) which sustained the loss creating the
mismatch.

This coverage only applies:

a. if the siding, roof surfacing, and/or windows on the dwelling or other
structure(s) is damaged by a peril not excluded under Building Property Losses
We Do Not Cover; and

b. if the replacement siding, roof surfacing, and/or windows do not match the
existing undamaged siding, roof surfacing, and/or windows; and

c. if the mismatch is due to:

(1) fading, weathering, oxidizing, or color of materials;
(2) texture or dimensional differences; or

(3) obsolescence or unavailability of the siding, roof surfacing materials, and/or
windows;

In addition, coverage only applies to undamaged siding, roof surfacing, and/or
windows on the dwelling and/or other structure(s) that sustained the damage.

SPECIAL CONDITIONS

When undamaged siding, roof surfacing, and/or windows are replaced due to a
mismatch as part of a covered loss, we will pay to replace with materials that are
substantially similar to the materials used to repair or replace the damaged exterior
siding, roof surfacing, and/or windows so there is a reasonably uniform
appearance with the repair of the damaged areas.

[Doc. No. 34-1, the Policy, at 48]. Plaintiffs argue that AEIC breached the Matching
Provision by refusing to fully replace the roof and that AEIC “left the Saxons with a
mismatched, piecemeal roof that was unreasonable and in violation of industry standards,
especially considering the Plaintiffs had a $20,000 Matching Benefit in their Policy.”
[Doc. No. 51 at 25]. AEIC, however, asserts that Plaintiffs never notified AEIC that they
were unable to secure matching shingles and that “the record demonstrates the matching
provision was never made relevant during the claim handling process.” [Doc. No. 55 at 4;
Doc. No. 34 at 23].
The Court concludes that a genuine issue of material fact is present regarding
whether AEIC breached the Matching Provision. The parties present competing summary
judgment evidence regarding whether a mismatch in roof surfacing was an issue during
the claims handling process. AEIC presents summary judgment evidence that its estimate
for roof repairs included a line item for market price of shingles in Plaintiffs’ area of the
like kind and quality. [Doc. No. 34 at 22; Doc. No. 34-26 at 6 (line item for shingles in
estimate)]. Plaintiffs counter that, despite the estimate reflecting shingles of like kind and
quality to Plaintiffs’ existing shingles, they had a concern about a mismatch due to the
relative age of the shingles, which they state they expressed to AEIC. [See Doc. No. 51-1,

Lauren Saxon Dep. at 17, 118:7–118:25 (Plaintiff Lauren Saxon’s testimony that they
were worried about the mismatch in the roof surfacing and had communicated that to
AEIC); Doc. No. 51-5, Brett Neal Aff. ¶ 8 (“Sparks engaged in correspondence with
Liberty Mutual about our concerns of only doing a partial repair and concerns with
matching shingles.”)]. Plaintiffs also requested reinspection of their roof after their

contractor had repaired the roof damage. [Doc. No. 34-2, Claim Notes, at 3, Oct. 3, 2023
entry]. AEIC hired Hancock Claims Consultants to reinspect the roof, and Hancock
issued a report with supporting photographs. [Doc. No. 34-28, Hancock Report; Doc. No.
51-2, Hancock Report]. Plaintiffs contend the photographs demonstrate the mismatch.
[See Doc. No. 51 at 18, ¶ 60]. Indeed, one of the photographs submitted as part of the

report indicates a mismatch in shingles. [See Doc. No. 51-2, Hancock Report, at 3].
AEIC, however, argues that Plaintiffs did not express concern about the mismatch. [Doc.
No. 55 at 4–5]. The scope of Hancock’s report indicates that the area of concern
prompting the reinspection was whether the repairs had adequately addressed the storm
damage, not whether the roof surfacing displayed a mismatch. [Doc. No. 34-28 at 3

(summarizing Hancock’s findings regarding storm damage to the roof)]. AEIC also
presents summary judgment evidence that Plaintiffs exacerbated the mismatch by
repairing the roof with a patch repair instead of a full-slope replacement, for which AEIC
provided coverage. [Doc. No. 55 at 4–5; Doc. No. 55-1, Chiarello Dep. at 3–4, 180:7–
180:21 (indicating AEIC approved coverage for a slope replacement); 191:9–191:22
(expressing opinion that Plaintiffs patch-repaired their roof)]. In sum, the above summary
judgment evidence demonstrates that a genuine issue of material fact exists regarding

whether AIEC breached the Matching Provision by failing to provide coverage to replace
the non-damaged shingles to prevent a mismatch. Summary judgment is, therefore,
inappropriate.
2. Coverage for Plaintiffs’ personal property contaminated by asbestos

The Court next turns to Plaintiffs’ claim that AEIC’s denial of their claim for
personal property contaminated by asbestos breached the Policy. As outlined above,
Stanley Steemer’s repair of water damage to Plaintiffs’ ceiling caused asbestos
contamination to Plaintiffs’ personal property, and AEIC denied coverage for that
personal property. [Doc. No. 51-17 (email explaining denial)]. The stated reason for
AEIC’s denial was that they do not cover faulty workmanship. [Id. at 2]. The Policy

states that it does not cover “faulty, inadequate, or defective” “workmanship, repair, [or]
construction.” [Doc. No. 34-1, the Policy, at 40]. Additionally, the Policy does not cover
loss to personal property caused directly or indirectly by faulty repairs. [See id. at 42
(“We do not cover losses caused directly or indirectly by any of the Building Property
Losses We Do Not Cover.”)]. Plaintiffs argue that AEIC cannot insulate itself because

Stanley Steemer “acted as an arm of AEIC.” [Doc. No. 51 at 25]. In support of this
argument, Plaintiffs state that AEIC had Stanley Steemer inspect Plaintiffs’ home,
directed their work, and paid them directly. [Id. at 25 n.4 (“Plaintiff had no choice of
vendor.”)].
To support their position that Stanley Steemer acted as an arm of AEIC, AEIC
would have necessarily had to delegate a contractual obligation under the Policy to
Stanley Steemer. But the Policy does not obligate AEIC to repair the insured property.

The Policy provides coverage for accidental, direct, physical loss to Plaintiffs’ home and
does not exclude wind or storm damage. [Doc. No. 34-1 at 37]. Plaintiffs do not cite
provisions of the Policy that require AEIC to assume responsibility to repair their
property. Instead, the Policy requires AEIC to cover the cost of repairs to the property.
Accordingly, Stanley Steemer did not serve as an arm of AEIC by performing repairs to

the property. AEIC cites the Policy’s exclusion for faulty workmanship as its basis for
not paying for the personal property damaged during the course of Stanley Steemer’s
repairs, and Plaintiffs cite no basis the exclusion should not apply, other than that Stanley
Steemer acted as an arm of AEIC. [Doc. No. 34 at 20–21; Doc. No. 51 at 25–26].
Because the Court does not conclude that AEIC delegated performance of any of its

contractual obligations under the Policy to Stanley Steemer, the Court finds Plaintiffs’
argument unsustainable.
Equally unavailing is Plaintiffs’ argument that, by paying to remediate other
asbestos contamination within the house, AEIC “admitt[ed] its liability for the asbestos
issue[.]” [Doc. No. 51 at 26]. AEIC advised Plaintiffs that the Policy covers asbestos

remediation. [Doc. No. 34-2, Claim Notes, at 9, Aug. 10, 2023 entry (“advised per TM
there is asbestos coverage and to pls send estimate for WM to review.”)]. The Court’s
inquiry is whether AEIC’s denial of coverage for Plaintiffs’ personal property breached
the Policy. Without any argument pertaining to why the Policy’s exclusion does not apply
to Plaintiffs’ claim relating to its personal property or presentation of a genuine issue of
material fact, the Court finds that AEIC is entitled to judgment as a matter of law.
Accordingly, the Court concludes that AEIC is entitled to summary judgment on

Plaintiffs’ breach of contract claim on this ground.
3. Coverage for repairs to Plaintiffs’ HVAC unit

The Court turns next to Plaintiffs’ claim that AEIC breached the Policy by failing
to cover damage to its HVAC unit. Plaintiffs’ HVAC unit failed following the storm that
damaged their home. [Doc. No. 34-2, Claim Notes, at 13, June 27, 2023 entry]. AEIC
denied their claim for repairs because the adjuster’s inspection indicated the HVAC unit
failed because the control unit failed due to wear and tear. [Doc. No. 34-9, HVAC
Assessment Report, at 6; Doc. No. 34-10 at 2 (email advising of denial)]. Plaintiffs had
their HVAC unit inspected, and the inspection concluded that a power surge during the
storm caused wires to melt, burning the circuit board. [Doc. No. 51-9, Tony Goertzen

Aff. ¶ 4]. Because the parties each attribute the damage to the HVAC to a different cause,
one covered under the Policy and one not covered, the Court concludes a genuine,
material fact exists regarding whether AEIC breached the Policy by denying coverage for
repairs to the HVAC unit. Thus, the Court denies summary judgment on this claim.
4. Coverage for Additional Living Expenses

Finally, the Court addresses Plaintiffs’ claim that AEIC breached the Policy by
failing to advise them of coverage for Additional Living Expenses. The Policy provides
that “[i]f a loss covered under this section makes that part of the residence premises
where you reside uninhabitable, we cover Additional Living Expense, meaning the
necessary increase in living expenses you incur so that your household can maintain its
normal standard of living.” [Doc. No. 34-1, the Policy, at 43]. As AEIC points out, the
Policy requires that Plaintiffs actually incurred Additional Living Expenses for AEIC to

provide coverage. [Doc. No. 34 at 23]. Plaintiffs do not assert that they incurred such
expenses or submitted a claim for coverage. Instead, Plaintiffs argue that “AEIC denied
this claim constructively by failing to inform Plaintiffs of the full benefit or how they
could submit expenses.” [Doc. No. 51 at 26]. Plaintiffs do not cite Oklahoma caselaw that
supports their position that a failure to advise an insured of benefits amounts to a

constructive denial of benefits. [See id.]. The summary judgment evidence demonstrates
that AEIC tried to help Plaintiffs secure alternate living arrangements. [See Doc. No. 34-
2, Claim Notes, at 6, Sept. 15, 2023 entry (“Vendor Assignment (Type: Temporary
Housing Vendors) created for MyKey Accommodations, Inc Assignment Notes: Good
morning, insured will need temp housing. Right now we are looking at the max two

weeks during investigation into their furniture replacement. Limits are $115,740 per
Incident. Two adults and a one year old. thank you!”)]. Plaintiffs admit they were
unresponsive to those efforts. [See Doc. No. 51 ¶ 36 (not disputing AEIC’s statement that
“the vendor had attempted to reach the Plaintiffs multiple times and the Plaintiffs had
been unresponsive”); id. ¶ 52 (responding “undisputed” in response to AEIC’s statement

that “MyKey advised they had made ‘many attempts’ to contact Plaintiffs that were
unanswered”)]. Because Plaintiffs have presented no summary judgment evidence that
(1) they incurred living expenses covered under the Policy or that (2) AEIC denied a
claim for coverage for Additional Living Expenses, the Court concludes AEIC is entitled
to summary judgment on this claim.
B. The Court grants in part and denies in part AEIC’s Motion regarding
Plaintiffs’ bad faith claims.

AEIC also moves for summary judgment on Plaintiffs’ bad faith claims related to
the alleged breaches of the Policy. Plaintiffs assert three grounds that AEIC acted in bad
faith: (1) AEIC failed to advise Plaintiffs regarding the Matching Provision in the Policy
and coverage for Additional Living Expenses; (2) AEIC failed to compensate them for
the personal property contaminated by asbestos; and (3) AEIC disregarded the opinions
of Plaintiffs’ contractors. [Doc. No. 51 at 28–32].
“Under Oklahoma law, ‘[a]n insurer has a non-delegable duty of good faith while

performing the functions of claims management, adjustment and settlement.’” MPower,
Inc. v. Phila. Indem. Ins. Co., 695 F. Supp. 3d 1302, 1311 (W.D. Okla. 2023) (alteration
in original) (quoting Wathor v. Mut. Assur. Adm’rs, Inc., 2004 OK 2, ¶ 16, 87 P.3d 559,
563 n.6, as corrected (Jan. 22, 2004)). “This duty requires the insurer to take positive
steps to adequately investigate, evaluate, and respond to its insureds’ claims.” Id. The

essence of a bad faith action “is the insurer’s unreasonable, bad-faith conduct . . . and if
there is conflicting evidence from which different inferences may be drawn regarding the
reasonableness of insurer’s conduct, then what is reasonable is always a question to be
determined by the trier of fact by a consideration of the circumstances in each case.”
Badillo v. Mid Century Ins. Co., 2005 OK 48, ¶ 28, 121 P.3d 1080, 1093, as corrected

(June 22, 2005) (alteration in original) (quoting McCorkle v. Great Atl. Ins. Co., 1981 OK
128, ¶ 21, 637 P.2d 583, 587). “The decisive question is whether the insurer had a ‘good
faith belief, at the time its performance was requested, that it had justifiable reason for
withholding payment under the policy.’” Buzzard v. Farmers Ins. Co., 1991 OK 127,

¶ 14, 824 P.2d 1105, 1109 (citation modified) (quoting Buzzard v. McDanel, 1987 OK
28, ¶ 10, 736 P.2d 157, 159). The focus is on the insurer’s knowledge and belief during
the time the claim is reviewed. Id. When a legitimate dispute exists between the insurer
and insured, that dispute negates a bad faith claim as a matter of law. Oulds v. Principal
Mut. Life Ins. Co., 6 F.3d 1431, 1442 (10th Cir. 1993) (“Numerous Oklahoma cases have

ruled as a matter of law that no reasonable inference of bad faith arises when an insurer
denies a claim solely because of the existence of a legitimate dispute.”).
If the insurer establishes the existence of a legitimate dispute, the burden shifts to
the insured to produce additional evidence of bad faith. Sims v. Great Am. Life Ins. Co.,
469 F.3d 870, 891 (10th Cir. 2006). Oklahoma precedent identifies two categories of

objectively unreasonable conduct that support a jury question on bad faith. The first is a
sham justification, where the insurer “d[oes] not actually rely on that legitimate basis but
rather denie[s] the claim for an illegitimate reason, such as a ‘systematic, bad faith
scheme of canceling policies without . . . good cause.’” Bannister v. State Farm Mut.
Auto. Ins. Co., 692 F.3d 1117, 1128 (10th Cir. 2012) (third alteration in original) (quoting

Vining v. Enter. Fin. Grp., Inc., 148 F.3d 1206, 1214 (10th Cir. 1998)) (applying
Oklahoma law). The second is inadequate investigation because the “duty to timely and
properly investigate an insurance claim is intrinsic to an insurer’s contractual duty to
timely pay a valid claim.” Brown v. Patel, 2007 OK 16, ¶ 11, 157 P.3d 117, 122 (citation
modified).
1. AEIC’s failure to advise regarding coverage
The Court first examines whether AEIC is entitled to summary judgment

regarding whether it committed bad faith by failing to advise Plaintiffs regarding
coverage under the Matching Provision and coverage for Additional Living Expenses. In
support of their claim that AEIC’s failure to advise of coverage amounts to bad faith,
Plaintiffs cite to section 1250.5 of Oklahoma’s Uniform Claims Settlement Practices Act
(“UCSPA”), which requires an insurer to fully disclose facts about coverage and benefits

under a policy when pertinent to a claim and prohibits an insurer from knowingly
misrepresenting facts regarding coverage that are relevant to a claim. [Doc. No. 51 at 28
(citing 36 Okla. Stat. §§ 1250.5(1), (2))].
The Court must examine the relationship of the UCSPA to a bad faith claim. As
correctly stated by AEIC, the UCSPA does not create a private right of action. [See Doc.

No. 55 at 6 (citing Aduddell Lincoln Plaza Hotel v. Certain Underwriters at Lloyd’s of
Lond., 2015 OK CIV APP 34, ¶ 24, 348 P.3d 216, 223–24)]. “Oklahoma courts recognize
that—even though the UCSPA does not provide a private right of action—a bad-faith
claim can be predicated on the insurer’s failure to conform to the UCSPA’s standards of
care.” Klintworth v. Valley Forge Ins. Co., No. 21-5029, 2022 WL 1021750, at *5 (10th

Cir. Jan. 31, 2022) (unpublished). However, the Tenth Circuit has indicated that failure to
comply with the UCSPA alone cannot constitute bad faith. Id. at *6. Instead, the insurer’s
conduct must rise to the requisite level of culpability for bad faith, which is more than
simple negligence. Id. (“This minimum level of culpability is something ‘more than
simple negligence, but less than the reckless conduct necessary to sanction a punitive
damage award against said insurer.’” (citing Badillo v. Mid Century Ins. Co., 2005 OK
48, ¶ 28, 121 P.3d 1080, 1094, as corrected (June 22, 2005)). To survive summary

judgment on a bad faith claim predicated upon the UCSPA, Plaintiffs need to show that
AEIC’s failure to disclose coverage amounted to an unfair settlement practice, and (2)
AIEC’s “culpability is more than simple negligence.” Id. (citing 36 Okla. Stat. § 1250.5).
If AEIC can negate either element, it is entitled to summary judgment.
The Court, therefore, must examine the summary judgment evidence regarding

AEIC’s failure to advise Plaintiffs of their coverage to determine if it exceeds negligence.
Regarding AEIC’s failure to advise Plaintiffs of the Matching Provision, the Court
concludes a genuine issue of material fact exists regarding whether AEIC’s failure to
advise them of the Matching Provision exceeded simple negligence. When Plaintiffs were
preparing to repair the roof, the summary judgment evidence demonstrates that an area of

concern was a mismatch between the existing shingles and the new shingles. [See Doc.
No. 51-3, Chiarello Dep. at 23–25, 157:4–159:22 (testifying it was conceivable a concern
would exist regarding a mismatch between thirteen-year-old shingles and new shingles
due to weathering); Doc. No. 51-5, Brett Neil Aff. ¶¶ 6–8 (summarizing efforts to secure
matching shingles because of concern that a partial repair would result in a mismatch)].

That, coupled with the fact that a mismatch did occur, is enough to raise a genuine issue
of material fact regarding whether AEIC was beyond negligent in failing to advise
Plaintiffs of the Matching Provision. [See Doc. No. 51-11, Expert Report of Harry E.
Coates, Jr., at 5 (“The partial replacement of shingles does not meet industry standard and
would require a full roof replacement to achieve proper matching shingles and a
reasonably uniform appearance as stated in the Policy as well as industry standard.”)].
The Court, therefore, denies AEIC’s Motion regarding whether AEIC committed bad

faith by failing to advise Plaintiffs of the Matching Provision.
Regarding AEIC’s failure to advise Plaintiffs of coverage for Additional Living
Expenses under the Policy, the Court concludes AEIC is entitled to summary judgment.
The summary judgment evidence demonstrates that AEIC tried to provide temporary
housing for Plaintiffs. [See Doc. No. 34-2 at 6, Sept. 15, 2023 entry]. Plaintiffs do not

dispute that AEIC advised them of coverage for housing but instead argue AEIC “never
mentioned any other ALE benefits other than housing and accommodations as stated in
claim file.” [Doc. No. 51 at 22, ¶ 49]. AEIC disputes that by providing a transcript of
Plaintiff Lauren Saxon’s initial interview about Plaintiffs’ claim, during which AEIC
advised her that the Policy covered “a wide variety of things” including if Plaintiffs

needed to go out to dinner because they could not cook. [Doc. No. 55-3 at 19–20
(18:730–19:764)]. Therefore, to the extent that Plaintiffs claim the adjuster did not fully
advise them of every aspect of their coverage for Additional Living Expenses, the Court
concludes the summary judgment evidence does not reflect culpability beyond simple
negligence. Accordingly, the Court grants summary judgment on this issue.

2. AEIC’s denial of coverage for Plaintiffs’ personal property
The Court next turns to whether AEIC is entitled to summary judgment on
Plaintiffs’ claim that it committed bad faith by denying coverage for their personal
property contaminated with asbestos. As discussed above regarding Plaintiffs’ breach
claim on this same ground, AEIC had a legitimate reason for denying coverage under the
Policy, which Plaintiffs have not successfully negated. Accordingly, AEIC had a “good
faith belief, at the time its performance was requested, that it had justifiable reason for

withholding payment under the policy.” Buzzard v. McDanel, 1987 OK 28, ¶ 10, 736
P.2d 157, 159 (emphasis omitted).
Plaintiffs argue that AEIC has “a non-delegable duty of good faith while
performing claims management, adjustment, and settlement functions.” [Doc. No. 51 at
29–30 (citing Trinity Baptist Church v. Bhd. Mut. Ins. Servs., LLC, 2014 OK 106, ¶ 29,

341 P.3d 75, 86)]. However, Plaintiffs fail to explain how AEIC’s engagement of Stanley
Steemer to repair damage to Plaintiffs’ house constitutes delegation of claims
management, adjustment, or settlement, such as when an insurer hires an adjuster to
investigate an insured’s claims. See, e.g., Trinity Baptist Church, 2014 OK 106, ¶ 30, 341
P.3d at 86 (concluding insured is liable for an adjuster’s mishandling of claims via its

duty of good faith). Plaintiffs do not cite language in the Policy that requires AEIC to
conduct repairs. Nor do Plaintiffs cite relevant Oklahoma caselaw supporting their
argument that AEIC’s duty of good faith includes overseeing or performing repairs to the
property.
Having concluded that AEIC denied coverage for personal property contaminated

with asbestos due to a legitimate dispute regarding coverage, the Court turns to whether
Plaintiffs have presented additional evidence of bad faith—either a sham justification or a
failure to properly and timely investigate Plaintiffs’ claim. Plaintiffs do not argue, or
present summary judgment evidence, that AEIC presented either a sham justification or
failed to properly or timely investigate Plaintiffs’ claim regarding its personal property.
[See Doc. No. 51 at 29–30].
For these reasons, the Court grants AEIC’s Motion regarding Plaintiffs’ bad faith

claim pertaining to their personal property contaminated by asbestos.
3. AEIC’s disregard of Plaintiffs’ experts’ opinions
Plaintiffs’ final ground for bad faith is that AEIC disregarded Plaintiffs’ HVAC
specialist and Plaintiffs’ roofing expert. [Doc. No. 51 at 31]. Plaintiffs’ roof expert
opined that Plaintiffs needed a full roof replacement, and Plaintiffs’ HVAC specialist

attributed the damage to the HVAC to power surges caused by a storm. [Id.]. Plaintiffs
argue that AEIC did not reasonably investigate Plaintiffs’ claims. [Id. at 31–32].
Specifically, Plaintiffs state that AEIC either overlooked material facts or intentionally
disregarded undisputed facts. [Id. at 31 (citing Oulds v. Principal Mut. Life Ins. Co., 6
F.3d 1431, 1436–37 (10th Cir. 1993))].

Contrary to Plaintiffs’ arguments, the undisputed material facts demonstrate that
AEIC did not overlook the opinions of Plaintiffs’ experts and did consider them.
Regarding Plaintiffs’ roof expert, AEIC’s adjuster requested his estimate and supporting
documents. [See Doc. No. 34 ¶ 37; Doc. No. 51 ¶ 37]. After receiving the estimate, the
adjuster requested supporting photographs from the contractor. [See Doc. No. 34 ¶ 51;

Doc. No. 51 ¶ 51]. The adjuster reviewed the estimate and photos and concluded a full
roof replacement was not warranted and explained that decision to Plaintiffs. [See Doc.
No. 34 ¶¶ 53–54; Doc. No. 51 ¶¶ 53–54]. AEIC even increased its coverage as a result of
its review. [See Doc. No. 34 ¶ 55; Doc. No. 51 ¶ 55]. Regarding Plaintiffs’ HVAC
specialist, AEIC’s HVAC adjuster reviewed the report of Plaintiffs’ HVAC specialist and
provided a supplemental report in response. [See Doc. No. 34 ¶ 63; Doc. No. 51 ¶ 63].
Accordingly, the material, undisputed facts do not support Plaintiffs’ allegations that

AEIC ignored the reports of its experts. The Court, therefore, grants summary judgment
to AEIC on this ground for bad faith.
C. The Court denies AEIC’s Motion regarding punitive damages.
AEIC moves the Court to grant summary judgment on Plaintiffs’ request for
punitive damages. [Doc. No. 34 at 28–29]. Plaintiffs argue that their request is not subject

to summary judgment because they seek a remedy and the request does not constitute an
independent claim. [Doc. No. 51 at 32].
Oklahoma provides for punitive damages by statute, which requires clear and
convincing evidence that the defendant acted with reckless disregard for the rights of
others or in reckless disregard of its duty of good faith and fair dealing. 23 Okla. Stat.

§ 9.1(B). As correctly pointed out by Plaintiffs, the statute requires the jury to make this
determination. [See Doc. No. 51 at 33 (citing 23 Okla. Stat. §§ 9.1(B)(2), (C)(2))]. The
Court, however, acts as a gatekeeper for this issue, determining if the evidence is
sufficient to submit the issue to the jury. Badillo, 2005 OK 48, ¶ 66, 121 P.3d at 1106.
Because, as discussed above, fact issues remain regarding Plaintiffs’ claims, the Court

declines to address the issue of punitive damages at this stage and instead will address
whether to submit the issue to the jury at the conclusion of trial with “the benefit of a
complete record.” Accord Jackson v. State Farm Fire & Cas. Co., No. CIV-24-5-D, 2025
WL 2671562, at *5 (W.D. Okla. Sept. 17, 2025) (“Based on the summary judgment
record, the Court finds that a summary adjudication on punitive damages would be
premature, and the Court will instead rule on whether punitive damages will be submitted
to the jury based on the evidence offered at trial and with the benefit of a complete trial

record.”). Therefore, AEIC’s Motion is denied regarding punitive damages.
V. CONCLUSION
For the reasons outlined above, the Court GRANTS in part and DENIES in part
AEIC’s Motion for Summary Judgment.
The Court GRANTS AEIC’s Motion regarding Plaintiffs’ breach of contract claim

regarding (1) AEIC’s denial of Plaintiffs’ claim for personal property damaged by
asbestos and (2) AEIC’s handling of Plaintiffs’ claim for Additional Living Expenses.
The Court DENIES the Motion regarding Plaintiffs’ breach of contract claims regarding
(1) AEIC’s coverage regarding Plaintiffs’ roof repairs and (2) AEIC’s denial of coverage
for repair to Plaintiffs’ HVAC unit.

The Court GRANTS AEIC’s Motion regarding Plaintiffs’ bad faith claims
regarding (1) AEIC’s failure to advise Plaintiffs of coverage for Additional Living
Expenses, (2) AEIC’s denial of coverage related to its personal property contaminated by
asbestos, and (3) AEIC’s disregard of Plaintiffs’ expert reports. The Court DENIES
AEIC’s Motion regarding Plaintiffs’ bad faith claims regarding AEIC’s failure to advise

Plaintiffs of coverage provided by the Matching Provision.
Finally, the Court DENIES AEIC’s Motion to the extent it seeks summary
judgment on Plaintiffs’ punitive damages request.
IT IS SO ORDERED this 30th day of March 2026.
ei W. DISHMAN
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11305862. Public record. Not legal advice.