Title: DEANDA v. AIU INSURANCE

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

DEANDA v. AIU INSURANCE  DEANDA v. AIU INSURANCE 2004 OK 54 98 P.3d 1080 Case Number: 98986 Decided: 06/29/2004 As Corrected: July 19, 2004 As Corrected: July 20, 2004 THE SUPREME COURT OF THE STATE OF OKLAHOMA KEIR DEANDA, Plaintiff, v. AIU INSURANCE AND AIG CLAIM SERVICES, INC., Defendants. CERTIFIED QUESTION OF LAW FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA ¶0 The United States District Court for the Northern District of Oklahoma, pursuant to the Revised Uniform Certification of Questions of Law Act ( CERTIFIED QUESTION ANSWERED. Roger B. Hale, WYATT, AUSTIN, KINGERY & HALE, Ada, Oklahoma, for plaintiff. William D. Perrine, PERRINE, McGIVERN, REDEMANN, REID, BERRY & TAYLOR, P.L.L.C., Tulsa, Oklahoma, for defendants. WINCHESTER, J. ¶1 The United States Courtfor the Northern District of Oklahoma certified the following question pursuant to the Uniform Certification of Questions of Law Act, I. FACTS ¶2 The plaintiff, Keir DeAnda, was an employee of Terra Telecom. The defendant, AIU Insurance Company, issued a policy for workers' compensation insurance to Terra Telecom, which was in effect at the time of DeAnda's injury. The defendant, AIG Claim Services, Inc., is the third party administrator for AIU, responsible for the payment of allowed benefits, and authorization and payment of reasonable and necessary medical care related to DeAnda's workers' compensation claim. ¶3 The Workers' Compensation Court entered orders providing for reasonable and necessary medical expenses, and ordered reimbursement of expenses, prepayment of expenses and interest. DeAnda alleges that authorization for reasonable and necessary medical expenses, payments of reimbursements, prepayment of expenses and payment of interest were unreasonably delayed. The defendants deny that any award was entered determining what treatment was reasonable and necessary, or that their denial of medical treatment or delay in reimbursement was unreasonable. They further deny that the orders at issue rise to the level of an award. ¶4 These facts give a context to the certified question, and establish that the answer to the question may be determinative of an issue in pending litigation in the certifying court. II. EXCLUSIVITY OF WORKERS' COMPENSATION ACT ¶5 The Workers' Compensation Act "provides a complete, comprehensive, and exclusive method for administration of its provisions and for the enforcement of any and all awards made thereunder." May v. Covington, "The liability prescribed in Section 11 of this title shall be exclusive and in place of all other liability of the employer . . . at common law or otherwise, for such injury, loss of services, or death, to the employee, or the spouse, personal representative, parents, or dependents of the employee, or any other person." 85 O.S.2001, § 12. ¶6 The plaintiff, Keir DeAnda, maintains that this provision relates only to the liability of the employer, not to that of the insurance carrier. This question was answered in United States Fidelity and Guaranty Co. v. Theus, 1972 OK 9, ¶¶ 7, 12, 493 P.2d 433 , 434, 435. In that case the Court observed that although the Workers Compensation Act does not specifically exclude the insurance carrier from suit in district court for its own negligence, nevertheless, "the carrier is immune from suit in a common law action." After examining provisions in the Workers' Compensation Act, the Court held that the intent of the law was "to make the insurance carrier one and the same as the employer as to liability and immunity." Theus, 1972 OK 9, ¶ 12, 493 P.2d at 435, Fehring v. State Ins. Fund, 2001 OK 11, ¶ 28, 19 P.3d 276 , 285. ¶7 In Kuykendall we held that a common law remedy was not available against an employer for a post-judgment failure to pay an award ordered by the Workers' Compensation Court. Kuykendall, 2002 OK 96, ¶ 13, 66 P.3d at 378. DeAnda attempts to distinguish Kuykendall from the facts before us because one involves a self-insured employer and the other an insurance carrier for an employer. But the teaching of Theus is that they are treated the same; if a self-insured employer cannot be sued for a bad faith failure to pay, neither can an employer's insurance carrier. III. INTENTIONAL INJURY ¶8 Title 85 O.S.2001, § 11 provides compensation for "accidental personal injury." DeAnda argues that intentional acts of the insurance carrier are not covered by the Workers' Compensation Act. He continues that because bad faith is an intentional act, recovery for damages does not fall within the exclusive jurisdiction of the Workers' Compensation Court. ¶9 In Whitson v. Oklahoma Farmers Union Mut. Ins. Co., 1995 OK 4, 889 P.2d 285 , the issue was whether a successful workers' compensation claimant could later assert a tort claim against his employer for the manner in which the employer defended the claim. The Court held that he could not. Whitson, 1995 OK 4, ¶ 1, 889 P.2d at 286. The facts reveal that Whitson's supervisor claimed that he never received notice of Whitson's injury within the statutory time. The supervisor allegedly instructed other employees to deny notice of the claim. However, despite the supervisor's actions, an employee did confirm Whitson's accident to the investigator for the workers' compensation carrier early in his investigation. The court awarded compensation. Whitson, 1995 OK 4, ¶ 2, 889 P.2d at 286. ¶10 Whitson sued for fraud and bad faith. The trial court granted summary judgment to the defendants. On appeal, this Court held that an employer's liability to an injured worker is limited to that created by § 12 of the Workers' Compensation Act. Whitson, 1995 OK 4, ¶ 8, 889 P.2d at 287. 1 The act of the supervisor was alleged to be intentional, yet because it occurred during the adjudication of an employee's claim, the Court found the intentional act could not be grounds for a separate lawsuit. ¶11 Without citing Theus, Anderson v. United States Fidelity and Guaranty Co., 1997 OK 124, 948 P.2d 1216 , nevertheless followed its teaching in placing the insurer in the same position as the employer for conduct that predates a workers' compensation award. Anderson held that Oklahoma does not recognize a bad faith claim for pre-award conduct against a workers' compensation insurance carrier. Anderson, 1997 OK 124, ¶ 11, 948 P.2d at 1218, citing "Whitson¸ 889 P.2d at 285." The insurance carrier in that case contested Anderson's workers' compensation claim and filed an objection to his medical report. About six months later, the insurer authorized medical treatment. Anderson, 1997 OK 124, ¶ 3, 948 P.2d at 1216-1217. ¶12 Anderson filed suit in the district court of the State of Oklahoma for bad faith and intentional infliction of emotional distress. The case was removed to the United States District Court for the Northern District of Oklahoma, which certified this question: "Does Oklahoma law recognize the tort of bad faith for unjustified denial of workers' compensation insurance coverage or the assertion of a groundless defense, based on alleged damages incurred for the carrier's conduct that predated the claimant's workers' compensation award?" Anderson ¶13 Whitson and Anderson conclusively establish that not all intentional torts fall outside the jurisdiction of the Workers' Compensation Court. Therefore, even if the actions of the defendants, AIU and AIG, were intentional, that fact does not necessarily exclude them from the exclusive jurisdiction of the Workers' Compensation Act. IV. REMEDY FOR FAILURE TO PAY ¶14 A remedy for failure to pay is found in ¶15 That award bears interest at the rate of eighteen percent per year from the date it was ordered paid by the Workers' Compensation Court until the date of satisfaction. Upon the filing of a certified copy of the award, a writ of execution issues, process is executed and costs taxed, as in the case of writs of execution on judgments of courts of record. All remedies available to judgment creditors are available to the injured employee. Bishop v. Wilson Quality Homes, ¶16 In the Plaintiff's Response Brief, DeAnda complains that the remedy is inadequate to compensate an employee when an insurer fails to pay the ordered award, or fails to pay timely. DeAnda asserts that the insurance industry routinely ignores orders of the Workers' Compensation Court, knowing that nothing will happen as a result of their non-compliance. To support this generalization DeAnda cites Goodwin v. Old Republic Ins. Co., ¶17 Goodwin assumed, for the purpose of deciding the issue before the Court, that a workers' compensation insurance company could be liable in tort for a bad faith refusal to pay an employee's workers' compensation award. Goodwin, ¶18 The purpose of the Act is to fully define the rights of the parties and to wholly compensate an injured worker. The Legislature intended to lessen the adversarial nature of the process. Injecting the tort of bad faith into this legislative scheme would threaten the balance created by the Legislature. The Act provides a balance so employees may be compensated for work-related injuries and employers may stay in business and continue to pay those benefits. ¶19 The Legislature makes policy decisions in setting the remedies available to an employee in the Workers' Compensation Act. It fixes certain factors in the calculation of awards to achieve exact and uniform results. Mudge Oil Co. v. Wagnon, ¶20 The statute sets out a post-judgment remedy for a post-judgment act. Section 42 explicitly includes the insurance carrier. Accordingly, we conclude that the Legislature intended for an insurance carrier's post-judgment failure to pay fall within the exclusivity of the Workers' Compensation Act. V. GENERAL OBSERVATIONS ¶21 The Workers' Compensation Act ¶22 In a workers' compensation case where an insurer or a self-insurer fails to pay, the court ordering the payment must enforce its ruling. Both the Workers' Compensation Court and the District Court have provisions and the power to protect their judicial pronouncements. Injecting a new tort into the process is improper. ¶23 Other jurisdictions are divided over the issue of whether the workers' compensation insurer may invoke the employer's immunity from suits as a defense against a bad faith lawsuit. A slight majority favors immunity from suit. ¶24 In Kuykendall we observed there are no Oklahoma cases holding an employer liable for bad faith breach in paying a Workers' Compensation award. Kuykendall, CERTIFIED QUESTION ANSWERED. CONCUR: OPALA, V.C.J., LAVENDER, HARGRAVE, BOUDREAU, WINCHESTER, JJ. DISSENTS: WATT (JOINS KAUGER, J.), C.J., HODGES (JOINS KAUGER, J.), KAUGER, EDMONDSON (JOINS KAUGER, J.) JJ. FOOT