Ledford v. Travelers Indemnity Co.

DAUGHERTY, District Judge. ORDER Defendant has moved for summary judgment, and its Motion is confined to the issue of punitive damages. Plaintiff has responded with a Motion in Denial of Summary Judgment, which the Court will consider as a Response, rather than a Motion. Defendant contends that no genuine material issue of fact exists in the case with respect to Plaintiff’s claim for punitive damages and that Plaintiff is not entitled to such damages as a matter of law. According to the undisputed facts, Plaintiff was insured by Defendant against losses arising out of fire or due to theft of household goods owned by Plaintiff. Plaintiff’s residence was damaged by fire, and a contractor was called in to effect the necessary repairs. During the time the contractor was in possession of the residence, certain of Plaintiff’s goods disappeared, evidently stolen. Plaintiff has sued for losses of household goods damaged by the fire and also stolen while repairs were underway. Part of Plaintiff’s loss of household goods caused by the fire has been paid by Defendant, but Plaintiff’s claim for the goods apparently stolen during repairs has not been settled. The bases for Plaintiff’s claim for punitive damages are that the contractor was grossly negligent in failing to protect the contents of his residence during the repairs and was the agent of Defendant so that such gross negligence is imputable to Defendant, and that the Defendant has been guilty of oppression and bad faith in failing to settle the Plaintiff’s claim under the policy. Defendant contends that the contractor was not its agent, but rather an independent contractor. In support of this claim, Defendant presents an affidavit by an officer of the contracting firm which states that all work was done free from the control or direction of the Defendant, and further that it was hired by Plaintiff. Plaintiff quotes testimony from the deposition of Defendant’s adjuster, but the Court finds nothing in the quoted testimony or the entire deposition which opposes in any degree the statements contained in the [1334] affidavit. In fact, the adjuster stated Defendant never hired a contractor for this type of repair work and did not do so in this instance. Defendant has, therefore, sustained its burden of establishing that no genuine, material issue of fact exists with respect to the status of the contractor and is entitled to partial summary judgment on such issue. Defendant next contends that Plaintiff may not maintain a claim for punitive damages on the theory that it has handled his claim oppressively. It argues that Plaintiff has elected to proceed in contract, that Plaintiff’s claim for actual damages arises out of contract and that punitive damages may be allowed only on actions not arising out of contract. 23 Okl.St.Ann. § 9 provides that punitive damages may be allowed only in non-contract forms of action triable before a jury. Plaintiff argues that he has a tort cause of action arising from an alleged breach of a duty to exercise good faith by the Defendant’s adjuster, citing Century Ins. Co., Limited of Edinburgh, Scotland v. Rice, 193 Okl. 418, 144 P.2d 953 (1944) and Fidelity-Phenix Fire Ins. Co. of New York v. Board of Education, 201 Okl. 250, 204 P.2d 982 (1949). These cases do not reach the question here involved, which is whether the adjuster owes the insured a duty in tort to adjust the insured’s claim. The Court has previously considered this question in Renfroe v. Preferred Risk Mutual Ins. Co., 296 F.Supp. 1137 (D.C.Okl.1969), and found such a duty wanting in Oklahoma law. It appears that Plaintiff’s claim for punitive damages for the alleged oppressive manner in which his claim has been handled is defective for two reasons: First, his action herein is based on and arises out of the contract of insurance with the Defendant, and Second, the losses pleaded by Plaintiff other than punitive damages appear to be covered by the terms of the policy, thus, no actual damage in tort is pleaded to support the claim for punitive damage. Moral Ins. Co. v. Cooksey, 285 P.2d 223 (Okl. 1955). Defendant’s Motion for Summary Judgment, considered herein as a Motion for Partial Summary Judgment going to the question of punitive damages only, is granted to that extent, and Plaintiff’s action is limited to his claims for actual damages.