Opinion
Case No. 117,274
08-30-2019
Rebecca MADRID, Plaintiff/Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant/Appellee.
Rex Travis, Greg Milstead, Margaret Travis, Oklahoma City, Oklahoma, for Plaintiff/Appellant, Bill Molinsky, MOLINSKY LAW FIRM, Edmond, Oklahoma, for Defendant/Appellee.
Rex Travis, Greg Milstead, Margaret Travis, Oklahoma City, Oklahoma, for Plaintiff/Appellant,
Bill Molinsky, MOLINSKY LAW FIRM, Edmond, Oklahoma, for Defendant/Appellee.
OPINION BY BRIAN JACK GOREE, CHIEF JUDGE:
¶1 In this action to recover uninsured motorist benefits, the trial court granted summary judgment in favor of the automobile insurer. It is undisputed that the claimant settled with the insured tortfeasor for less than the liability limits and executed a release of all claims. We hold that a settlement and release for less than the policy limits is not an absolute forfeiture or an unassailable bar to recovery under 36 O.S. Supp. 2004 § 3636. The evidentiary materials show there is a genuine factual controversy concerning the value of the claim in this case. The summary judgment must be reversed.
¶2 Rebecca Madrid was injured in an accident allegedly caused by the negligence of Barbara Carlisle. Carlisle was operating a motor vehicle insured by USAA County Mutual Insurance Company. The USAA policy insured Carlisle against liability for bodily injury for up to $100,000. Madrid was an insured under a policy issued by State Farm Mutual Automobile Insurance Company. The State Farm policy included uninsured motorist coverage as provided by 36 O.S. Supp. 2004 § 3636 and the policy limit was $200,000.
¶3 In 2011, Madrid sued Carlisle for negligence in San Antonio where the accident occurred and her counsel began negotiating with USAA. State Farm opened an underinsured motorist claim and monitored the Texas action. In March 2015, State Farm wrote a letter to Madrid's counsel advising that it had not received any medical bills or treatment records. State Farm asked plaintiff's counsel to either confirm Madrid was not pursuing a UIM claim, or provide medical bills and records.
¶4 Madrid's attorney responded in April 2015 with a written demand for the UIM policy limits. The letter included a police report showing Madrid was rear-ended by Carlisle, an intoxicated driver. It referred to medical records indicating treatment for disk protrusions of the cervical and thoracic spine and medical bills totaling approximately $52,000. It discussed a surgical evaluation and a physician's opinion estimating future medical care would cost more than $400,000. The letter also stated:
The negligent party tendered $90,000.00 of their $100,000.00 policy to settle the third party case. The $90,000.00 was accepted because it would have been cost prohibitive to litigate for the full amount of the claim. The additional $10,000.00 that would have been obtained through litigation would be more than offset by litigation related costs and expenses; indeed, the cost of the two experts that were set to testify live at trial alone would have consumed this amount .
Madrid executed a full release of all claims against Carlisle in August 2015.
¶5 Madrid sued State Farm in Oklahoma County in March 2018. She alleges she was rear-ended by a drunk driver in Texas, the other driver had $100,000 of liability coverage, she settled her case for $90,000, and her damages exceed that sum. She further alleges she is an insured under the State Farm policy and State Farm has failed to pay her the uninsured motorist benefits it owes her.
¶6 State Farm filed an answer denying it owes UIM benefits. It stated numerous affirmative defenses but we will confine our review to the issues presented to the trial court. The issues are: (1) whether State Farm is entitled to summary judgment on its defense that the amount of Madrid's claim does not exceed the tortfeasor's liability limits, and (2) whether State Farm is entitled to summary judgment on its defense that Madrid was not legally entitled to recover damages against the tortfeasor because she gave the tortfeasor a release of all claims.
¶7 Uninsured motorist insurance protects persons who sustain a bodily injury and are legally entitled to recover damages from owners or operators of motor vehicles that are uninsured. § 3636(B). The term "uninsured motor vehicle" includes "an insured motor vehicle, the liability limits of which are less than the amount of the claim of the person or persons making such claim, regardless of the amount of coverage of either of the parties in relation to each other." § 3636(C). If the liability limits of a motor vehicle are less than the amount of the injured insured's claim, that vehicle is classified as uninsured. Burch v. Allstate Ins. Co. , 1998 OK 129, ¶13, 977 P.2d 1057, 1064. The injured insured has the burden to demonstrate she meets the statutory conditions before she can recover uninsured motorist coverage. Gates v. Eller , 2001 OK 38, ¶12, 22 P.3d 1215, 1219 ; Ply v. National Union Fire Ins. Co. , 2003 OK 97, ¶8, 81 P.3d 643, 647. Central to this appeal is Madrid's burden to demonstrate that the liability limit of the USAA policy is less than the amount of her claim.
Title 36 O.S. § 3636 "mandates UM coverage where: 1) the injured person is an insured under the UM provisions of a policy; 2) the injury to the insured has been caused by an accident; 3) the injury to the insured has arisen out of the ‘ownership, maintenance or use’ of a motor vehicle; and 4) the injured insured is ‘legally entitled to recover damages from the owner or operator of the uninsured motor vehicle.’ These four elements of an UM claim are determined from the facts and circumstances of each claim." Ply v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania , 2003 OK 97, ¶8, 81 P.3d 643, 647.
¶8 State Farm filed a motion for summary judgment pursuant to Rule 13 of the Rules for District Courts of Oklahoma. "If it appears to the court that there is no substantial controversy as to the material facts and that one of the parties is entitled to judgment as a matter of law, the court shall render judgment for said party." Rule 13(e). An appellate court reviews a summary judgment de novo because it is a purely legal determination. Carmichael v. Beller , 1996 OK 48, ¶2, 914 P.2d 1051, 1053.
¶9 In its motion, State Farm demonstrated with evidentiary material the fact that Madrid settled her claims against Carlisle for less than Carlisle's $100,000 liability limit. It argues that acceptance of Carlisle's $90,000 settlement offer establishes that the value of Madrid's claim was less than the limit of liability of Carlisle's insurance policy thus precluding Madrid from recovering uninsured motorist benefits. State Farm relies on Porter v. State Farm Mutual Automobile Ins. Co. , 2010 OK CIV APP 8, 231 P.3d 691.
¶10 In Porter v. State Farm , a claimant accepted a settlement of $85,000 where the liability policy limit was $100,000. Division III of the Court of Civil Appeals decided that accepting less than the liability policy limit, and releasing the tortfeasor from further liability, established that the claim did not exceed the available liability coverage and therefore plaintiff could not prove the tortfeasor was underinsured. Porter , ¶9.
¶11 Madrid criticizes Porter as creating a permanent irrebuttable presumption that the value of the claim is below the tortfeasor's policy limit. She cites Vlandis v. Kline , 412 U.S. 441, 446, 93 S.Ct. 2230, 2233, 37 L.Ed.2d 63 (1973) for the proposition that permanent irrebuttable presumptions are disfavored under the Due Process Clauses of the U.S. Constitution. According to Madrid, the rule adopted in Porter unconstitutionally deprives an insured of the right to establish whether her damages exceed the liability limits of the tortfeasor.
¶12 The Supreme Court has never determined whether an insured who settles for less than the tortfeasor's policy limits automatically forfeits benefits under an uninsured motorist policy. Our analysis begins with § 3636(C) which necessitates figuring the amount of the claim of the person requesting UM benefits. The statute requires a comparison between the amount of the claim and the amount of the liability coverage – not the amount of a settlement .
In Sexton v. Continental Casualty , 1991 OK 84, ¶9, 816 P.2d 1135, 1136, the Supreme Court declined to resolve the question of whether there can be UM coverage once the insured settled for less than the liability policy limits.
¶13 We are persuaded that the value of a bodily injury claim might in some cases exceed the amount of a settlement. Madrid's release states she compromised a disputed claim. Her lawyer's letter indicates she strategically settled for less than the value of her claim to avoid substantial litigation expenses associated with a jury trial. Porter v. State Farm holds that the value of a claim for UIM purposes is established by the settlement and release when it is less than policy limits. There is no indication in Porter that the plaintiff submitted evidence demonstrating her loss exceeded the settlement as Madrid did in this case.
¶14 State Farm presented documentation showing a settlement and release for less than the policy limit. The burden then shifted to Madrid to tender evidentiary materials to justify a trial. See , Oklahoma Dept. Of Securities v. Wilcox , 2011 OK 82, ¶18, 267 P.3d 106, 111. The documents she attached to her responsive brief are reasonably supportive of her claim that she sustained actual losses exceeding $100,000. There is a factual controversy in this case and it is a question for the trier of fact.
We have held that a valid claim must be reasonably supported by evidence of the actual losses sustained. Lamfu v. GuideOne Ins. Co. , 2006 OK CIV APP 19, ¶22, 131 P.3d 712, 716.
¶15 State Farm also sought summary judgment on grounds that Madrid became ineligible for UM benefits once she released the tortfeasor because she was no longer legally entitled to recover damages. Section 3636 provides that UM coverage is available only for insured persons who are "legally entitled to recover damages from owners or operators of uninsured motor vehicles ..." The Supreme Court has considered this phrase on multiple occasions and has steadfastly held that it simply means that the insured must be able to establish fault on the part of the uninsured motorist. Torres v. Kansas City Fire & Marine Ins. , 1993 OK 32, ¶7, 849 P.2d 407, 410, citing Barfield v. Barfield , 1987 OK 72, 742 P.2d 1107 ; Karlson v. City of Oklahoma City , 1985 OK 45, 711 P.2d 72 ; and Uptegraft v. Home Insurance Company , 1983 OK 41, 662 P.2d 681. Madrid has established that the intoxicated driver who rear-ended her was at fault. We hold Madrid was legally entitled to recover damages against an uninsured motorist within the meaning of § 3636 and the fact that she ultimately released the tortfeasor is irrelevant to that issue.
¶16 In conclusion, we hold that the record demonstrates a genuine issue of fact on the material question of whether the liability limit of the tortfeasor's motor vehicle is less than the amount of Madrid's claim. The undisputed fact that Madrid settled and released her claim for less than the liability limit is relevant evidence but not an absolute forfeiture or an unassailable bar to her recovery under § 3636. The summary judgment is REVERSED.
JOPLIN, P.J., concurs.
BUETTNER, J., dissents.
¶1 I would follow Porter v. State Farm Mutual Automobile Ins. Co. , 2010 OK CIV APP 8, 231 P.3d 691 (cert. denied).