Badillo v. Mid Century Insurance Co.

TAYLOR, J.,

with whom WATT, C.J., and COLBERT, J., join, concurring specially:

¶ 1 I concur with all of the majority opinion but write specially to express my views. Trial and appellate courts must give “bad faith” claims very close, careful and, sometimes, skeptical scrutiny. Bad faith claims must be firmly and fairly considered based upon the law and evidence of the case. I am convinced that the trial judge was correct in submitting the issue of bad faith to this jury.

¶ 2 Insurance companies, like other companies seeking to increase their market and customer base, have turned to mass marketing of liability insurance policies just as other companies market soap and cars. Through its advertising, the insurance company beckons the consumer to do business with it based upon slogans that suggest the liability insurance company will look after its customer’s best interest. The insurance company promises the customer will be in good hands and treated with caring and neighborly concern. Soothing and comforting music plays in the background of these advertisements. Based on these advertisements, it is only reasonable for customers to rely on the insurance company to handle claims with care and concern for the customer’s financial and legal interests.

¶3 These reassurances are part of the insurance contract requiring an insurance company to act in good faith and fair dealing toward its customers. See Wathor v. Mutual Assurance Adm’rs, Inc., 2004 OK 2, ¶ 5 , 87 P.3d 559, 561 . The insurance contract places more responsibility on the insurance company than just paying claims. Christian v. American Home Assurance Co., 1977 OK 141 , ¶ 24, 577 P.2d 899, 904 . Liability insurance coverage is more than just a performance or surety bond that will be paid if a claim is justified.

¶4 When a liability insurance policy is purchased, the customer is buying more than just the payment of a potential claim. The customer is buying coverage. The customer is buying comfort. The customer is buying peace of mind. The customer is buying the skill of the insurance company to negotiate and settle claims in his best legal and financial interest. The customer is buying the right to counsel and the best advice the insurance company has to offer.

¶ 5 The essence of the insurance company’s contractual duty owed in this case is set out *1111 in the majority opinion at paragraph 26 which states:

In dealing with third parties, however, the insured’s interests must be given faithful consideration and the insurer must treat a claim being made by a third party against its insured’s liability policy “as if the insurer alone were liable for the entire amount” of the claim....

(Citations omitted.)

¶ 6 If the insurance company in this case had acted with good faith and fair dealing, Mr. Badillo would have been called to consult with the professional claims staff about the request that he give a statement. He would have been encouraged to give such a statement. The statement may have been very helpful in settling this case. The statement would have been that Badillo was not drinking, was not on an employer-related errand, made $8.50 an hour, had few assets, had no other insurance, and was basically “judgment proof’. At the very least, a strategy could have been developed attempting to protect Mr. Badillo rather than leave him hanging out for his financial life. The insurance company at least owed him this service.

¶ 7 This minimal effort by the insurance company would have been a basis for a successful defense against this bad faith claim and also would have potentially limited Badil-lo’s liability to his policy limits. If the insurance company had handled this case with care and neighborly concern, the extent of its liability would have been the $10,000 policy limit.

¶ 8 There is a nationwide debate about “lawsuit abuse” and the proliferation of lawsuits. It will be a good day for all when the size and number of lawsuits go down. But as long as there are eases with evidence such as in this case, judges must submit these issues to a jury and let a jury decide. This lawsuit shows the role of the courts in carrying out the mandate of the Oklahoma Constitution that “speedy and certain remedy [be] afforded for every wrong and for every injury to person, property, or reputation....” Okla. Const, art. 2, § 6. The Constitution further provides “that right of trial by jury shall be and remain inviolate....” Id. at art. 2, § 19; see 12 O.S.2001, § 556. After carefully considering the law and evidence of this case, I am resolved that the trial judge correctly submitted the breach of good faith and fair dealing issue to the jury.

¶ 9 Under the evidence in this case, these issues must be submitted to a jury. Without this evidence of conduct by this insurance company, there would have been no case to submit to the jury. If insurance companies wish to prevent bad faith cases, then they must govern themselves in accordance with the law and the terms of the insurance products they market and sell. When that day comes, then bad faith cases will become a relic of the past.

¶ 10 The dissent mistakenly views this case as involving the duty to pay. The duty of good faith and fair dealing of the insurance company does, in fact and law, involve more than simply paying a claim. It extends to the settlement and defense of a claim. However, nothing in the majority opinion or this special concur would obligate the insurance company to offer to pay some amount greater than the liability policy limits in settling with a third party.

¶ 11 This jury was properly instructed and reached its verdict based upon the law and evidence. I can find no preserved evidentia-ry, factual or legal error in the jury’s verdict. It should remain undisturbed.