Hardison v. Balboa Insurance , 4 F. App'x 663 ( 2001 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
FEB 16 2001
TENTH CIRCUIT
PATRICK FISHER
Clerk
TELMA L. HARDISON,
Plaintiff-Appellant,
v. No. 00-6100
BALBOA INSURANCE COMPANY, (D.C. No. 98-CV-1500-T)
(W.D. Okla.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before KELLY, BRISCOE, Circuit Judges, and MURGUIA , District Judge **
.
Plaintiff Telma L. Hardison appeals a district court order granting summary
judgment to defendant Balboa Insurance Company in this diversity action arising
from Balboa’s denial of coverage after a tornado damaged Hardison’s home. We
have jurisdiction under 28 U.S.C. § 1291 and affirm. 1
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
**
The Honorable Carlos Murguia, United States District Judge, District of
Kansas, sitting by designation.
1
Although Hardison filed her notice of appeal prior to a final resolution of
her claims against defendants United Companies Lending Corporation and United
(continued...)
I.
Hardison purchased a house in Oklahoma City, Oklahoma, with a loan
provided by United Companies Lending Corporation and serviced by United
Companies Financial Corporation (collectively, the United Companies). She
subsequently defaulted on the loan and failed to maintain insurance as required by
the terms of the loan. After the United Companies instituted a foreclosure action,
Hardison filed bankruptcy. In November 1996, the United Companies exercised
their contractual right to “force place” a fire insurance policy on the home to
protect their interest in the property. Balboa provided the force placed policy,
which named the United Companies as the insured. The policy was cancelled in
November 1997 by the United Companies without explanation, and in June 1998 a
tornado damaged Hardison’s home. She filed a claim for coverage, which Balboa
denied on the ground that the force placed policy had been cancelled before the
tornado struck.
Contending cancellation of the policy was ineffective because she never
received notice, Hardison sued Balboa in federal court, alleging that Balboa’s
failure to provide coverage constituted a bad faith breach of insurance contract,
(...continued)
Companies Financial Corporation, we have jurisdiction because the district court
granted certification under Rule 54(b) of the Federal Rules of Civil Procedure.
See Lewis v. B.F. Goodrich Co. , 850 F.2d 641, 645 (10th Cir. 1988) (en banc).
2
and violated the Oklahoma Consumer Credit Code, Okla. Stat. tit. 14A, §§ 4-107,
4-304. She also asserted these claims and two federal causes of action against the
United Companies. In addition, she alleged in an amended complaint that Balboa
was vicariously liable for the United Companies’ alleged wrongful cancellation of
the policy. Finally, although it does not seem to appear in the amended
complaint, Hardison argued in the district court that she was asserting a claim that
Balboa was liable for failing to procure insurance.
The district court dismissed Hardison’s Oklahoma Consumer Credit Code
claims, stayed the action as to the United Companies because they filed
bankruptcy, and granted Balboa’s motion for summary judgment. The district
court certified its grant of summary judgment as a final judgment, immediately
appealable pursuant to Federal Rule of Civil Procedure 54(b).
II.
We review a summary judgment order de novo, considering the evidence
and drawing reasonable inferences therefrom in the light most favorable to the
nonmoving party. Cooperman v. David, 214 F.3d 1162, 1164 (10th Cir. 2000).
We review the district court’s evidentiary rulings on summary judgment for an
abuse of discretion. N. Tex. Prod. Credit Ass’n v. McCurtain County Nat’l Bank,
222 F.3d 800, 813 (10th Cir. 2000). Our role in this diversity action “is to
ascertain and apply state law to reach the result the Oklahoma Supreme Court
3
would reach if faced with the same question.” Shugart v. Cent. Rural Elec.
Coop., 110 F.3d 1501, 1504 (10th Cir. 1997) (internal brackets and quotation
marks omitted). We review the district court’s determination of state law de
novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991). 2
III.
Bad Faith Breach of Insurance Contract Claim
Hardison contends the district court erred in granting summary judgment on
her bad faith breach of insurance contract claim. Under Oklahoma law, “an
insurer has an implied duty to deal fairly and act in good faith with its insured.”
Christian v. Am. Home Assurance Co., 577 P.2d 899, 904 (Okla. 1978). A
violation of this duty, often referred to as a bad faith breach of insurance contract,
gives rise to a tort action and liability may be imposed when “there is a clear
showing that the insurer unreasonably, and in bad faith, withholds payment of the
claim of its insured.” Id. at 905.
2
Balboa points to four of our earlier decisions in arguing we should give
deference to the district court’s interpretation of Oklahoma law. See Appellee’s
Br. at 8 (“The views of a resident district judge on the unsettled law of his state
are persuasive and ordinarily accepted.”) (citing Jorgensen v. Meade Johnson
Labs., Inc. , 483 F.2d 237, 239 (10th Cir. 1973); Sade v. N. Natural Gas Co. , 483
F.2d 230, 234 (10th Cir. 1973); Binkley v. Mfrs. Life Ins. Co. , 471 F.2d 889, 891
(10th Cir. 1973); Vaughn v. Chrysler Corp. , 442 F.2d 619, 621 (10th Cir. 1971)).
As we explained in Steiner Corp. v. Johnson & Higgins of California , 135 F.3d
684, 690 (10th Cir. 1998), however, our earlier opinions affording deference to a
district court’s determination of state law were implicitly rejected by the Supreme
Court’s decision in Russell and therefore lack any continuing precedential force.
4
Relying on Smith v. National Bank of McAlester, 575 P.2d 975 (Okla. Ct.
App. 1977), the district court entered summary judgment on the bad faith claim
after concluding Balboa had no duty under Oklahoma law to notify Hardison of
the United Companies’ cancellation of the force placed policy. In Smith, the
court held that the defendant mortgagee had no legal obligation to notify the
plaintiff mortgagor that an insurance policy covering her home, which was
payable to the bank in the event of loss, had been cancelled by the insurance
company several years before a fire destroyed the home. The district court
apparently interpreted Smith to mean that a party who does not initiate the
cancellation of a policy payable to the mortgagee need not notify the mortgagor of
the cancellation. Because it was undisputed in this case that the United
Companies cancelled the force placed policy, under which they were the named
insured, the district court held that Balboa had no legal duty to notify Hardison of
that cancellation. Alternatively, the district court held that even if there was such
an obligation, the evidence in the record demonstrated that Balboa mailed notice
to Hardison.
Hardison’s arguments regarding her bad faith claim are unclear. Although
she tries to distinguish Smith from the facts of this case, she does not directly
assert that Balboa is liable for bad faith breach of insurance contract simply
because it allegedly violated a legal duty to notify her that the United Companies
5
cancelled the force placed policy. Instead, it appears Hardison is arguing that
Balboa is liable because it denied coverage based on a cancellation that, she says,
was legally ineffective without such notice. Next, she asserts the evidence that
Balboa offered to show mailing of notice was inadmissible. Finally, Hardison
appears to argue that even if the evidence was admissible, it does not
unequivocally demonstrate that Balboa mailed her notice of the cancellation.
Cancellation ineffective without notice
Hardison relies on two Oklahoma statutes to argue that cancellation of the
force placed policy was legally ineffective under state law without notice to her.
One such statute is found in the Oklahoma Insurance Code, which sets forth the
following “standard fire insurance policy” cancellation provision adopted by the
Oklahoma Legislature:
Cancellation of policy. This policy shall be canceled at any
time at the request of the insured, in which case this Company shall,
upon demand and surrender of this policy refund the excess of paid
premium above the customary short rates for the expired time. This
policy may be canceled at any time by this Company by giving to the
insured a five days’ written notice of cancellation with or without
tender of the excess of paid premium above the pro rata premium for
the expired time, which excess, if not tendered shall be refunded on
demand. Notice of cancellation shall state that said excess premium
(if not tendered) will be refunded on demand.
Okla. Stat. tit. 36, § 4803(G) (emphasis added). According to Hardison, because
this cancellation provision was incorporated by the force placed policy, under
6
which she asserts she was an additional insured, five days’ advance written notice
to her that the United Companies were canceling the policy was required before
the cancellation could legally take effect.
Hardison’s reliance on section 4803(G) is misplaced for several reasons.
First, the force placed policy’s termination provision does not incorporate the
exact language set forth in that section. The termination provision states in
pertinent part that “[t]his Policy may be cancelled by the Named Insured [the
United Companies] at any time by giving written notice stating when thereafter
such cancellation shall be effective. This Policy may be cancelled by the
Company [Balboa] by giving at least sixty (60) days advance written notice of
such intent to cancel this Policy.” Appellant’s App. at 79 (emphasis added). 3
Second, regardless of whether we look to the five-day cancellation provision of
section 4803(G) or the sixty-day cancellation provision of the force placed policy,
the advance notice requirement plainly applies only when the insurer is the party
canceling the policy. In this case, there is no dispute that the United Companies
cancelled the force placed policy, and we reject Hardison’s argument that a named
3
Although the force placed policy adopts “all provisions and stipulations in
the attached Standard Fire Policy,” Appellant’s App. at 79, the attached standard
fire policy contains cancellation terms that differ from section 4803(G), id. at 88-
89, apparently as allowed by Okla. Stat. tit. 36, § 4803(F). The attached policy’s
cancellation terms are, in turn, superseded by the “Termination” provision of the
force placed policy, as authorized by the “Standard Fire Insurance Policy”
provision of the force placed policy. Appellant’s App. at 79.
7
insured cannot cancel the policy without first obtaining the consent of any
additional insureds. Third, nothing in the policy language indicates that Balboa
was required to notify Hardison of the cancellation. Therefore, neither the terms
of section 4803(G) nor the termination provision of the force placed policy
provides that a cancellation would be legally ineffective unless Hardison first
received notice of that cancellation.
The second statute upon which Hardison relies is the following section of
the Oklahoma Consumer Credit Code:
A creditor shall not request cancellation of a policy of property
or liability insurance except after the debtor’s default or in
accordance with a written authorization by the debtor, and in either
case the cancellation does not take effect until written notice is
delivered to the debtor or mailed to him at his address as stated by
him. The notice shall state that the policy may be canceled in
accordance with the terms and conditions of the policy.
Okla. Stat. tit. 14A, § 4-304 (emphasis added). According to Hardison,
cancellation of the force placed policy was ineffective under section 4-304
because written notice was never delivered to her nor mailed to her residence.
Balboa does not dispute that section 4-304 applies in this case; 4 instead, it
4
During oral argument, Balboa suggested for the first time on appeal that
section 4-304 is inapplicable here because that section only “applies to loans the
primary purpose of which is the financing of insurance.” Okla. Stat. tit. 14A, § 4-
102(2). Although we may properly consider a new argument that presents an
alternative ground for affirming a lower court ruling on a pure question of law,
Stahmann Farms, Inc. v. United States , 624 F.2d 958, 961 (10th Cir. 1980), the
(continued...)
8
argues that the statute places the responsibility for giving notice squarely on the
“creditor,” i.e., the United Companies, rather than the insurer, i.e., Balboa. This
argument, however, reveals an apparent misunderstanding of Hardison’s theory of
liability. As we read Hardison’s trial and appellate briefs, she is alleging that
Balboa acted in bad faith not because it had a legal obligation to give her notice
of the cancellation, but because it denied coverage based on a cancellation that
was legally ineffective absent such notice under section 4-304, regardless of
whether the notice should have been given by the United Companies or Balboa.
Therefore, because Balboa does not question the applicability of section 4-304 to
this cancellation, the only relevant issues concerning the bad faith claim are
whether the evidence of notice was admissible, and whether there is a genuine
issue of fact that the notice was actually mailed to Hardison.
Admissibility of evidence of notice of cancellation
In support of its motion for summary judgment, Balboa presented various
evidence to show that it mailed Hardison a cancellation notice around the time the
United Companies cancelled the force placed policy. The evidence included
(...continued)
decision whether to resolve a newly raised issue is left to our discretion, and that
decision is based on the facts of each case, Anixter v. Home-Stake Prod. Co. , 77
F.3d 1215, 1229 (10th Cir. 1996). Here, we decline to address a contention that
was raised for the first time during oral argument.
9
computer-generated reproductions of two separate original cancellation notices
allegedly mailed to Hardison, a template used to generate one of those notices,
computer printouts which allegedly reflected that Balboa mailed Hardison a
cancellation notice, and an affidavit by Sharon Paolino, Balboa’s Vice-President
of Tracking Operations, explaining how the computerized records regarding the
force placed policy covering Hardison’s home were processed and maintained. In
addition, the record contains Balboa’s answers to Hardison’s interrogatories,
which provide extensive information concerning Balboa’s computer record
keeping system and which are properly verified by two Balboa employees. 5
On appeal, Hardison challenges the admissibility of several of these items
under the Federal Rules of Evidence. Although she fails to clearly explain her
specific contentions, Hardison seems to assert (1) that the computer-generated
documents, including the reproduced cancellation notices, were not properly
authenticated under Rule 901; (2) that Balboa did not lay a proper foundation for
the admission of the computer-generated documents under the business record
hearsay exception of Rule 803(6); and (3) that the reproduced cancellation notices
are too different from the original computer templates to be admissible as
duplicates under Rules 1001(4) and 1002.
5
A third verification attached to Balboa’s answers to interrogatories is
signed but not notarized. Appellant’s App. at 183.
10
The district court did not abuse its discretion in holding that the documents
in question were properly authenticated. “Rule 901(b)(1) provides that a witness
with knowledge may authenticate evidence by testifying that a matter is what it is
claimed it be.” United States v. Henry, 164 F.3d 1304, 1309 (10th Cir. 1999).
Here, Rule 901(b)(1) was satisfied by Balboa’s verified interrogatory answers,
which identify the reproduced cancellation notices as copies of the original
notices allegedly mailed to Hardison, and by the Paolino affidavit, which
identifies the remaining computer-generated documents as records that were
produced and maintained in the regular course of Balboa’s business activity.
Nor was there any abuse of discretion in concluding that the computer-
generated documents were admissible pursuant to the business record hearsay
exception of Rule 803(6). Computer business records are admissible under Rule
803(6) “if the offeror establishes a sufficient foundation in the record for [their]
introduction.” United States v. Cestnik, 36 F.3d 904, 909 (10th Cir. 1994).
According to Hardison, Balboa did not lay a proper foundation because neither
Paolino nor the employees verifying Balboa’s answers to interrogatories alleged
personal knowledge of the creation of the computer-generated documents. While
it is true that a “witness may not testify to a matter unless evidence is introduced
sufficient to support a finding that the witness has personal knowledge of the
matter,” Fed. R. Evid. 602, “there is no requirement that the party offering a
11
business record produce the author of the item,” FDIC v. Staudinger, 797 F.2d
908, 910 (10th Cir. 1986). Instead, a foundation for the business record hearsay
exception may be established by anyone who demonstrates sufficient knowledge
of the record keeping system that produced the document. Here, Paolino satisfied
this requirement through her affidavit, wherein she stated she was competent to
testify about the computer system that created the documents and she explained
how data was entered and retrieved from the computer system.
As for whether the reproduced cancellation notices are too different from
the original templates to be admissible as duplicates under Rules 1001(4) and
1002, we need not resolve this issue because Hardison did not raise it in the
district court. See FDIC v. Noel, 177 F.3d 911, 915 (10th Cir. 1999) (“when a
litigant fails to raise an issue below . . . and the court below does not address the
merits of the issue, the litigant has not preserved the issue for appellate review”). 6
Sufficiency of evidence of mailing cancellation notice
6
Only one sentence in Hardison’s response to Balboa’s summary judgment
motion mentions the requirement of original writings, and that sentence refers to a
computer-generated reproduction of the original letter notifying Hardison that the
United Companies were going to force place coverage for her home; it does not
refer to the computer-generated reproductions of the original cancellation notices.
Appellant’s App. at 62 (“Clearly the document [the force placed policy notice]
lacks the authenticity required by Fed. R. Evid. 901, is inadmissible hearsay under
Fed. R. Evid. 802, and Balboa cannot justify the failure to produce an original as
required by Fed. R. Evid. 1002.”).
12
Hardison’s final arguments concerning her bad faith breach of insurance
contract claim relate to whether Balboa’s evidence regarding the mailing of a
cancellation notice properly supported summary judgment. Notably, it is not
necessary for Balboa to prove that Hardison actually received notice of the
cancellation. Rather, to sustain summary judgment on the bad faith claim,
presuming that notice was necessary under Okla. Stat. tit. 14A, § 4-304 to
effectuate the policy cancellation on which the denial of coverage was based,
Balboa need only present undisputed evidence which demonstrates that it mailed a
cancellation notice to Hardison. See Richardson v. Brown, 443 F.2d 926, 927-28
(10th Cir. 1971) (where insurance company strictly complies with policy terms
relating to cancellation, including mailing insured a cancellation notice at address
shown on policy, risk of non-receipt falls on the insured) (citing Midwestern Ins.
Co. v. Cathey, 262 P.2d 434, 436 (Okla. 1953)). 7
According to Hardison, under our unpublished order in State Farm Fire &
Casualty Co. v. Van Horn, No. 97-5131, 1998 WL 58187 (10th Cir. Feb. 11,
1998), the evidence in the record was insufficient to show that Balboa actually
mailed notice of cancellation to her. In Van Horn, a declaratory judgment action,
7
Hardison argues that proof of receipt is required because Balboa did not
strictly comply with the five-day advance notice of cancellation requirement of
Okla. Stat. tit. 36, § 4803(G). As we have previously explained, however, that
cancellation requirement is inapplicable to Hardison.
13
we held that a statement by a State Farm employee adequately demonstrated that
State Farm mailed a cancellation notice that was allegedly never received by its
insured homeowners. The employee testified that he “followed the customary
procedures in mailing a cancellation notice to [the homeowners] whereby he
checked the address, verified the postmark date, and presented the notice to a
United States Postal Service official.” Id. at *2. Though he could not recall
mailing the specific cancellation notice to the homeowners, he testified that he
never varied his routine of mailing cancellation notices and that his initials were
on State Farm’s copy of the notice, indicating that he mailed it. In this case,
Hardison notes that Balboa never alleged that its employees personally followed
customary procedures in mailing cancellation notices. She also argues that
Balboa did not have a duplicate of the actual letter purportedly mailed to her, and
there was no notation in either written or computer form to verify actual mailing
of notice prior to the loss.
Notwithstanding Hardison’s apparent belief to the contrary, Van Horn did
not establish a “test” for determining whether an insurer properly mailed a notice
of cancellation. Instead, we merely recognized that the undisputed facts in that
case were sufficient to show that the insurer had mailed a cancellation notice to
its insureds. We reach the same conclusion here. Although Hardison is correct
that none of Balboa’s employees testified about any steps they personally take to
14
mail cancellation notices, that is because Balboa sends its notices by computer.
Indeed, Balboa’s uncontradicted and verified interrogatory answers stated that
once a force placed policy is cancelled, a computer-generated letter is
automatically produced and sent to the homeowner, and “[t]here is no evidence
that the handling of this file was not normal and in accordance with our
procedures.” Appellant’s App. at 164.
Moreover, Hardison misstates the record when she claims “there is no
duplicate or original of the actual letter purportedly mailed to [her] and no
person’s notation, whether written or in computer form, verifying actual mailing
of any letter prior to the loss.” Appellant’s Br. at 24. To the contrary, the
reproduced notices are attached to Balboa’s summary judgment motion, and
Paolino’s affidavit explains how a particular notation in one of Balboa’s computer
printouts reflects that notice was sent to Hardison on October 30, 1997, long
before Hardison’s home sustained tornado damage in June 1998. Therefore, the
district court properly concluded that the evidence in the record was sufficient to
show that Balboa mailed Hardison notice of the cancellation.
Hardison also contends there are factual disputes in the record, but she does
not clearly identify which facts are in dispute or how they relate to the issue of
whether Balboa mailed her notice of cancellation. For example, she notes that
one of Balboa’s cancellation notices used the United Companies’ letterhead, yet it
15
is not apparent how this created a genuine issue of fact as to whether notice was
ever mailed. Similarly, she observes that the reproduced cancellation notices
contain a disclaimer stating that the reproductions are based on information that
may be different from when each document was originally sent, but again, it is not
clear how this reveals a factual dispute concerning whether the notices were
actually mailed. Finally, she makes much of the fact that Balboa changed its
computer records at some point after cancellation of the force placed policy to
more accurately identify the coverage on Hardison’s home as “Forced Order
Hazard” or “FOH” instead of “Lender Single Interest” or “LSI.” Hardison seems
to argue that this re-designation reveals a factual dispute as to whether the system
ever produced an LSI cancellation letter for what was actually an FOH policy.
Even assuming the initial coverage designation was incorrect, there is no evidence
to indicate that Balboa’s computer did not create and send a cancellation letter for
whatever type of coverage was in effect at the time. The reproduced cancellation
notices themselves state that the coverage on Hardison’s home was cancelled;
they do not identify the coverage as falling under an FOH or LSI policy.
Accordingly, Hardison has failed to show a factual dispute on the issue of
whether Balboa mailed her notice of the United Companies’ cancellation of the
16
force placed policy covering her home. 8
Vicarious Liability Claim
Hardison also contends that the district court erred in granting summary
judgment on her claim that Balboa was vicariously liable under an agency or joint
venture theory for the United Companies’ purported wrongful cancellation of the
force placed policy. “‘Agency is the relationship which results from the
manifestation of consent by one person to another that the other shall act on his
behalf and subject to his control, and consent by the other so to act.’” Agee v.
Gant, 412 P.2d 155, 160 (Okla. 1966) (quoting Farmers Nat’l Grain Corp. v.
Young, 102 P.2d 180, 185 (Okla. 1940)). A joint venture, on the other hand,
occurs when (1) two or more parties share a joint interest in property; (2) the
parties agree to share the venture’s profits and losses; and (3) the parties’ conduct
demonstrates cooperation in the venture. Gragg v. James, 452 P.2d 579, 586
(Okla. 1969). Here, the district court entered summary judgment in favor of
8
In her reply brief, Hardison argues that the assertion in her affidavit that
she never received a cancellation notice prior to her loss creates a factual dispute
as to whether such notice was ever mailed. See Oaks v. Motors Ins. Corp. , 595
P.2d 789, 792 (Okla. 1979) (“proof of no receipt . . . may raise an inference of
nonmailing and thus serve to controvert insurer’s alleged compliance with the
policy provision that requires the mailing of notice”). Her failure to address this
issue in her opening brief constitutes a waiver of that argument. See Coleman v.
B-G Maint. Mgmt. of Colo., Inc. , 108 F.3d 1199, 1205 (10th Cir. 1997) (“Issues
not raised in the opening brief are deemed abandoned or waived.”).
17
Balboa on the vicarious liability claim because Hardison had not offered any
evidence sufficient to show that Balboa and the United Companies were involved
in either an agency or a joint venture relationship.
On appeal, Hardison unsuccessfully tries to demonstrate there are factual
disputes as to whether Balboa may be vicariously liable for the United
Companies’ allegedly wrongful acts. For instance, she notes that a company
called Insurance Automation Corporation (IAC) entered into a written agreement
to provide the United Companies with insurance tracking and automation services
“supported by underwriting contracts with the Balboa Insurance Company.”
Appellant’s App. at 97. However, Balboa is not a signatory to the agreement, and
Hardison does not offer any evidence to establish the legal relationship, if any,
between IAC and Balboa. Hardison next points to a “General Agency
Agreement” between Balboa and a company called United Plan Agency, Inc.
(United Plan), but she again fails to offer any evidence that explains whether
there is a legal relationship between United Plan and the United Companies.
Hardison also relies on the fact that one of Balboa’s cancellation notices used the
letterhead and signature block of the United Companies’ Escrow Department.
However, this single document presents only a scintilla of evidence that, by itself,
is insufficient to create a factual dispute as to whether there was an agency or
joint venture relationship between Balboa and the United Companies under
18
Oklahoma law. Compare S.W. Bell Media, Inc. v. Arnold, 819 P.2d 293 (Okla.
Ct. App. 1991) (holding factual dispute existed as to whether there was an agency
relationship between two telephone companies that used the same logo, had
similar names, and accepted contracts on behalf of each other). Finally, she
points to evidence which tends to show that two United Plan employees may also
work for the United Companies and that one of Balboa’s employees may also
work for IAC. However, Hardison does not cite, and we have not found, any
Oklahoma case law which suggests that a joint venture may be established simply
by the fact that two companies employ the same person. 9 The district court
properly granted summary judgment on Hardison’s vicarious liability claim.
Failure to Procure Insurance Claim
As her final contention, Hardison asserts the district court erred in granting
summary judgment on her claim that Balboa is liable for the alleged failure of its
agent, United Plan, to procure insurance coverage for her home. The Oklahoma
Court of Civil Appeals has recognized that “an insurance agent may be liable
under either contract or tort theories for failure to obtain insurance.” Swickey v.
9
Hardison also notes that Wayne Bono, the President of United Plan and
Balboa’s agent, countersigned the force placed policy United Financial obtained
for her home. We fail to see the legal significance of this fact, given that
Oklahoma law requires all insurance policies to be “countersigned by a licensed
agent of the insurer.” Okla. Stat. tit. 36, § 627(A).
19
Silvey Companies, 979 P.2d 266, 268 (Okla. Ct. App. 1999). “In order to prevail
on a claim for breach of contract to procure insurance, a plaintiff must show that
the insurance agent agreed to procure insurance coverage effective as of a certain
date and time, or of a certain breadth, and then failed to do so.” Id. In contrast,
the tort theory recognizes that “[a]n agent has the duty to act in good faith and use
reasonable care, skill and diligence in the procurement of insurance and [that] an
agent is liable to the insured if, by the agent’s fault, insurance is not procured as
promised and the insured suffers a loss.” Id. at 269. The district court did not
expressly discuss this particular cause of action in its summary judgment order,
but it is apparent that even if such a claim may lie against an insurer (as opposed
to its agent), summary judgment is proper on this claim.
According to Hardison, United Plan had a duty to procure and maintain
insurance coverage for her home following cancellation of the force placed
policy, and Balboa is liable for its agent’s failure to do so. Although Hardison
does not clearly identify whether she is attempting to impose liability under a
contract or tort theory, it is clear that liability under either theory occurs only
where the insured has actually requested coverage from the agent. See Swickey,
979 P.2d at 268-69. In this case, Hardison does not offer any evidence to suggest
that she ever communicated with, or sought insurance from, United Plan. Indeed,
she admits that she did not even know Balboa had placed a policy on her home
20
until after she sought coverage for the tornado damage to her home. Thus, we
reject Hardison’s argument that Balboa is not entitled to summary judgment on
her failure to procure insurance claim.
AFFIRMED.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
21