* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### APR 22 1998 

### PATRICK FISHER Clerk 

### UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANA LOCKE, individually and as class representative on behalf of the class constituting all similarly situated citizens and residents of Oklahoma who are or were insureds of Allstate Insurance Company, Plaintiffs-Appellants,

v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee. No. 96-6415 (D.C. No. CIV-96-826-A) (W. Dist. of Okla.)



### ORDER AND JUDGMENT *

Before SEYMOUR , Chief Judge, EBEL and BRISCOE, Circuit Judges.

Jana Locke brought this action against Allstate Ins urance Company asserting breach of contract, fraud, and bad faith in connection with Allstate’s1 Mrs. Locke also asserted a tort claim for violatio n of public policy, as

well as claims for fraud and bad faith based on All state’s conduct in negotiating a consent order with the Oklahoma State Board for Pro perty and Casualty Rates three years after Allstate denied coverage under th e homeowners policy. The court below rejected these claims on the merits and Mrs. Locke has not appealed those rulings.

2 After examining the briefs and appellate record, t his panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The c ause is therefore ordered submitted without oral argument. -2- refusal to provide replacement cost coverage under a homeowners policy. 1 The district court granted summary judgment for Allstat e on these claims, ruling that they were time-barred. On appeal, Mrs. Locke chall enges only the disposition of her tort claims, asserting that the running of the limitation period should not have been decided as a matter of law. We agree and reve rse. 2 In reviewing a grant of summary judgment, we must d etermine whether the evidence, viewed most favorably to the nonmoving party, reveals a genuine issue of material fact. Miller v. Armstrong World Indus. , Inc , 949 F.2d 1088, 1090 (10th Cir. 1991). Summary judgment is not proper w hen “‘the evidence presents a sufficient disagreement to require submission to a jury.’” Thrasher v. B & B Chem. Co. , 2 F.3d 995, 996 (10th Cir. 1993) (quoting Anderso n v. Liberty Lobby,
Inc. , 477 U.S. 242, 251-52 (1986)). As we discuss belo w, the evidence here is not so one-sided that Allstate is entitled to preva il on its affirmative defense as a matter of law. Id.-3-

Viewed most favorably to Mrs. Locke, the record rev eals the following. On March 14, 1991, Allstate representatives appeared b efore the Oklahoma State Board for Property and Casualty Rates at a hearing on Allstate’s application to eliminate both replacement coverage on roof surfaci ng and home replacement cost guarantee coverage from its homeowners policy witho ut a reduction in homeowners insurance rates. The discussion at thathearing and the official minutes of the meeting indicate that the Board’s pe rmission to drop the coverage was conditioned upon Allstate’s formulating and fil ing with the Board a disclaimer notice to be submitted to and signed by the insureds informing them that the coverage would be eliminated. It is undis puted Allstate knew members of the Board were taking the position during the relev ant period that absent a disclaimer signed by the insured, the coverage woul d not be eliminated and the Board would not back Allstate in a dispute with an insured over coverage. Allstate began eliminating coverage on May 27, 1991 , by including the disclaimer notice in its policy renewal packets along with oth er notices and documents. Mrs. Locke had acquired homeowners insurance prior to March 1991 containing the replacement coverage Allstate was se eking to eliminate. On June 18, 1992, she submitted a claim for replacement of her roof due to hail damage that would have been covered under those provisions . Allstate refused to honor the claim even though it is undisputed Allstate didnot have a signed disclaimer-4-

notice from Mrs. Locke. Mrs. Locke filed a complai nt with the Board asserting her Allstate agent had told her Allstate was not handling that part of the policy any more and she should have received notice of the coverage elimination upon renewal. Mrs. Locke further stated she had no know ledge of the coverage elimination and her premium had not changed for red uced coverage. The Board sought a response from Allstate and Allst ate replied that Mrs. Locke had received notice in her 1992 renewal infor ming her the coverage had been changed. Allstate attached to its response an unsigned notification form. The Board conveyed Allstate’s response to Mrs. Lock e, who again contacted the Board and denied receiving any notice of a reductio n in coverage. Upon further inquiry from the Board, Allstate reiterated it had enclosed notice of coverage reduction in Mrs. Locke’s renewal offer. The Boardpersonnel handling Mrs. Locke’s complaint were apparently unaware that the Board had previously conditioned Allstate’s elimination of coverage uponreceipt by Allstate of a signed disclaimer notice from the insured, and Alls tate did not enlighten either the Board or Mrs. Locke regarding this fact. Allst ate’s refusal to provide coverage was left undisturbed by the Board. Mrs. Locke filed this action in 1996, well past the two-year limitation period provided by Oklahoma law for fraud actions. See Okla. Stat. tit. 12, § 95 Third (1991). However, Oklahoma recognizes two exc eptions to the running of-5-

the statute of limitation in tort cases, the discov ery rule and the doctrine of fraudulent concealment. Szczepka v. Weaver , 942 P.2d 247, 249 (Okla. Ct. App. 1997). The discovery rule provides that the limitation period is tolled until “the claimant knew, or, in the exercise of reasonable di ligence would have discovered the act which gives rise to the claim.” Redwine v. Baptist Med. Ctr of Okla.,
Inc. , 679 P.2d 1293, 1295 (Okla. 1983). Under this rul e, “the beginning of the running of the statute of limitations is usually to be determined from the facts and circumstances of the particular case; and, where th ese are such that reasonable men might reach conflicting opinions thereon, the i ssue is a question for determination by the trier of the facts.” Id. Under the fraudulent concealment doctrine, the statute is tolled when a defendant co mmits “some actual artifice to prevent knowledge or some affirmative act of concea lment or some misrepresentation to exclude suspicion and prevent inquiry.” Wills v. Black & West, Architects , 344 P.2d 581, 584 (Okla. 1959). The district court held as a matter of law that the discovery rule did not render Mrs. Locke’s tort claims timely because she had sufficient information by July 1, 1992, which, if pursued with due diligence, would have revealed her alleged injury at the hands of Allstate. The courtbased its ruling on Mrs. Locke’s statement in her complaint to the Board that Allstate was denying coverage and that her agent had told her she should have receive d notice of coverage reduction.-6-

While it is true Mrs. Locke knew those facts in 199 2, it is also true she pursued those facts with the state agency authorized to han dle such complaints and that upon investigation the Board determined the facts d id not entitle Mrs. Locke to relief. The Board’s decision is one of the circums tances which must be factored into the reasonable diligence inquiry in accordance with Oklahoma law. See Redwine , 679 P.2d at 1295. We believe the district court improperly focused solely on the facts Mrs. Locke knew before she complained to the Board without addressing the impact on the reasonable diligence r equirement of the Board’s adverse resolution of her complaint. In our view, reasonable jurors could differ on whether due diligence required Mrs. Locke to tak e further action on her claims after the Board rejected them. The court also held as a matter of law that the doc trine of fraudulent concealment did not apply for two reasons. First, the court ruled that the only concealment in which Allstate engaged was silence, and that the mere failure to disclose does not rise to fraudulent concealment un der Oklahoma law. Oklahoma defines the tort of deceit as, inter alia, “[t]he s uppression of a fact by one who is bound to disclose it, or who gives information of o ther facts which are likely to mislead for want of communication of that fact.” O kla. Stat. tit. 76, §3.3 (1991). In addition, Oklahoma law defines actual fraud to i nclude “[t]he suppression of that which is true, by one having knowledge or beli ef of the fact.” Okla. Stat. tit.-7-

15, § 58.3 (1991). Here, in response to Mrs. Locke ’s complaint that her coverage had been eliminated without notice, Allstate presen ted the Board with an unsigned copy of the notice disclaimer along with its assert ion that it had given Mrs. Locke actual notice. In light of the above provisions, A llstate’s exchange with the Board could be viewed by a reasonable juror as goin g beyond mere silence to constitute affirmative conduct intended to conceal the fact that a signed disclaimer was required before Allstate could elimi nate coverage and that Allstate had not complied with that condition. Moreover, wh ether or not Allstate’s responses to the Board rose to the level of fraudul ent concealment, they were certainly relevant to the discovery doctrine as a c ircumstance tending to explain Mrs. Locke’s decision not to proceed further with h er claims. See Redwine , 679 P.2d at 1295. Second, the court held that one relying on fraudule nt concealment must show she exercised reasonable diligence to ascertai n the facts constituting her cause of action. The court repeated its conclusion that Mrs. Locke’s knowledge in 1992 was sufficient to show lack of diligence as a matter of law, improperly disregarding the impact of the Board’s decision on her need to investigate further. In addition, the court apparently was of the view t hat due diligence required Mrs. Locke to institute a lawsuit as did another disgruntled Allstate insured. We are not persuaded, however, that reasonable diligence r equires the commencement of-8-

a lawsuit in order to uncover concealed facts. See Baskin v. Hawley , 807 F.2d 1120, 1131 (2d Cir. 1986). In sum, we conclude that fact issues exist on this record as to the applicability of the discovery doctrine and the doc trine of fraudulent concealment to the running of statute of limitations. Accordin gly, we REVERSE the judgment of the district court and remand for furth er proceedings.
ENTERED FOR THE COURT
Stephanie K. Seymour Chief JudgeNo. 96-6415, Locke v. Allstate Insurance Co.

BRISCOE, Circuit Judge, dissenting: Because I conclude the district court properly dism issed plaintiff’s fraud and bad faith claims on statute of limitations grou nds, I respectfully dissent. Plaintiff alleged in her complaint that Allstate ha d affirmative duties to (1) provide actual notice to her in early 1992 of its d eletion of home replacement (HRCG) and roof replacement (RS) coverage; (2) advi se her in early 1992 that HRCG and RS coverage were available under a separat e Allstate policy; and (3) advise her, when it handled her June 1992 claim, th at deletion of RS coverage from her original policy was conditioned upon her s igning the disclaimer notice approved by the Board in 1991. According to plaint iff, Allstate’s failure to fulfill these duties constituted fraud and bad faith. The district court concluded these claims were subj ect to a two-year statute of limitations under Okla. Stat. tit. 12, § 95. Th e court further concluded the claims were subject to the “discovery rule,” which “tolls the statute of limitations until an injured party knows of, or in the exercise of reasonable diligence, should have known of or discovered the injury, and resulti ng cause of action.” Weathers v. Fulgenzi , 884 P.2d 538, 541 (Okla. 1994); see also Szczepka v. Weaver , 942 P.2d 247, 249 (Okla. App. 1997) (“The ordinary statute of limitations will not prevent the vindication of a right, without consentor notice, until such time as the person knows, or in the exercise of due diligence, should have known that the-2-

right existed.”); In re John Deere 4030 Tractor , 816 P.2d 1126, 1131-32 (Okla. 1991) (same). Applying the discovery rule, the cou rt concluded:

Mrs. Locke knew she had suffered damage the moment Allstate denied coverage for a loss she thought sho uld have been covered by her homeowners policy. On July 1, 1992, she complained to the state’s Insurance Commissioner. In her comp laint, Ms. Locke recited: She [an Allstate agent] stated that Allstate was no t handling that part of the policy any longer. She s aid we should have received notice from the company upon renewal. We have no knowledge of this. (citation omitted). Thus, by July 1, 1992, by her own words, Ms. Locke knew both of the damage (a decision of non-coverage) anda fishy aspect of coverage reduction (that she should have received s ome kind of notice, which she denied receiving). By then, Ms. Locke had information that, if pursued, would have led to the true condition of things. Like the plaintiff in Mud Trans , Ms. Locket knew she had suffered damage that might be Allstate’s fault. Under the discovery rule, the limitations period wa s triggered when Ms. Locke received sufficient knowledge so that she could have discovered her claims, regardless of whether s he actually knew of the claim at that time. Therefore, the statute of limitations began to run on any tort claim arising from Allstate’s 19 91 or 1992 conduct not later than July 1, 1992. Because Ms. Locke did not bring suit within the requisite two-year period, her tort clai ms are untimely. App. at 696-97. I agree with the district court’s analysis. At the time plaintiff filed her complaint with the Insurance Commissioner on July 1 , 1992, she knew Allstate had denied her claim for replacement cost coverage for her roof, that Allstate claimed it had sent a disclaimer notice to her when it renewed her policy in early 1992, and that she did not remember receiving such notice. Even after the Board1 It is unclear from the record whether plaintiff r eceived a copy of the

letter with the accompanying copy of the disclaimernotice (either directly from Allstate or from the Insurance Commissioner). If s he did not, she should have requested a copy either from Allstate or the Insurance Commissioner. In other words, I believe a reasonable person in plaintiff’s shoes, who alleged she did not receive notice of the change in coverage, would hav e asked to see a copy of the disclaimer notice that Allstate allegedly mailed to her. -3- failed to take action beyond inquiries of Allstate on her administrative complaint, plaintiff and her husband continued to maintain the y had been treated unreasonably by Allstate. In particular, in Septem ber 1992, plaintiff’s husband wrote a letter to Allstate denying they had receive d a copy of the disclaimer notice. Notwithstanding this position, plaintiff and her husband failed to take any action against Allstate for a period of nearly fouryears. I also find it significant that, during resolution of plaintiff’s administrative complaint, Allstate provided the Board (and presumably plaintiff1 ) with a copy of the disclaimer notice sent to plaintiff when it ren ewed her policy. The notice stated in pertinent part: “Because of the signific ance of this change [i.e., deletion of RS coverage], we ask you to please sign on the l ine below, and return the perforated section in the envelope provided.” App. at 123. In my view, this language should have alerted a reasonable person inplaintiff’s position to either make further inquiry of the Board about the signatu re requirement or to seek assistance from an attorney. As for plaintiff’s argument that the applicable statutes of limitations were-4-

tolled due to Allstate’s fraudulent concealment of facts, I agree with the district court that plaintiff’s failure to exercise reasonab le diligence precludes her from asserting this argument. Daugherty v. Farmers Co-o p. Assoc. , 689 P.2d 947, 951 (Okla. 1984) (plaintiff’s negligence in discovering cause of action prevents him from asserting bar of fraudulent concealment). I would affirm the judgment of the district court.