* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata and coll ateral 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 

### JUL 9 1997 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

PEGGY J. BRIDGES,

Plaintiff-Appellant,

v. FARMERS INSURANCE GROUP OF COMPANIES, an unincorporated association; FARMERS INSURANCE COMPANY, INC.; FARMERS INSURANCE EXCHANGE; FARMERS GROUP, INC., foreign insurance corporations,

Defendants-Appellees. No. 95-6317 (W. District of Oklahoma) (D.C. No. CIV-94-535-L)

ORDER AND JUDGMENT *

Before ANDERSON , HENRY, and MURPHY , Circuit Judges.

This is a diversity case. The Appellant, Peggy J. Bridges, appeals the district court's summary judgment holding that Farm ers Insurance Company-2-

("Farmers") did not act in bad faith in performing its obligations for underinsured motorist coverage. This court exercises jurisdicti on pursuant to 28 U.S.C. § 1291 and affirms.
I. FACTUAL BACKGROUND On March 12, 1991, Bridges was a passenger in a veh icle driven by Debbie Inga when the vehicle was struck from behind by ano ther vehicle. At the time of the accident, Bridges had a contract of insurance w ith Farmers which included medical payments ("med-pay") coverage and underinsu red motorist ("UM") coverage. As a result of the accident, Bridges all egedly suffered neck and back injuries, as well as aggravation of a pre-existing epigastric problem. Bridges also claimed lost earnings. The course of communication between Bridges and Farmers following the accident in 1991 is of primary importance for analy zing Bridges’ bad faith claim. On April 4, Bridges' attorney mailed a letter to Fa rmers, enclosing a collision report and Bridges' medical bills. The letter info rmed Farmers of the accident, noted that Farmers was Bridges' UM and med-pay insu rance carrier, and stated that "there could very well be underinsurance in th is case." The letter also stated that Bridges was submitting "medical bills for medi cal coverage payment at this time."-3-

On April 8, Farmers’ representative and Bridges' attorney had a telephone conversation. Farmers and Bridges have differing a ccounts of what was said in that conversation. Farmers asserts that the attorn ey indicated that Bridges was making only a med-pay claim. Bridges, on the otherhand, asserts that her attorney indicated that she was making a UM as well as a med-pay claim. Bridges cites to the affidavit of her attorney in which he indicates that he "had a phone conversation with a Farmers claims representative i n which [he] advised that [Bridges was] making claim for bodily injury under [her] underinsured motorist coverages"; that he was "also asking for payments u nder . . . medical coverages"; and that he "did not tell the Farmers claims repres entative that [] Bridges was making claim only under med-pay." On April 11, Farmers authored a letter to Bridges' attorney. The letter states, "We received notice of a claim involving in jury to Peggy Bridges and Debbie Inga. Upon contact, you indicated that WestGeneral was handling the claim due to the liability of their insured. If atany time coverage on the tortfeasor is in doubt, or injuries will exceed the ir limits, please notify Farmers Insurance Company immediately." On April 18, Bridges' attorney authored a letter to Farmers, submitting "medical bills for payment." The list of medical e xpenses presented began with the heading, "Peggy J. Bridges : $2,000/each - Medical Pay Coverage." Over the-4-

next two months, Farmers received various documents regarding Bridges' medical treatment and bills. The documents included severa l notations that insurance limits had been exhausted. On June 5, Bridges' attorney and a Farmers claims r epresentative again spoke by telephone. Bridges stresses the following portions of the conversation, as recounted in her attorney's affidavit: the attor ney advised Farmers that Bridges' claim was “definitely a [UM] claim,” as medical bil ls had already exceeded $ 7,000, while the tortfeasor's West General liabil ity policy was thought to cover only up to $10,000; the attorney informed Farmers t hat Bridges was having difficulties, including financial difficulties, in obtaining medical treatment; the attorney also attempted to get the Farmers represen tative to advance portions of the UM coverage, but she refused, instead inquiring about what the tortfeasor's liability carrier was going to do. Bridges' attorn ey's affidavit also reveals that Farmers' representative "seemed willing to talk butwanted to know what [Bridges'] offer was and what [West General] was go ing to do; that Farmers' representative "indicated she wanted a total demand and asked [Bridges' attorney] to send her one; that Bridges' attorney told Farmer s' representative he did not “have all of the damage information available yet"; and that the representative told the attorney "to send it . . . when [he] got i t."-5-

The next contact between Bridges and Farmers did no t occur until October 9, 1991, when Bridges' attorney mailed a settlementbrochure and a letter making a $45,000 offer, with thirty days to accept or face a lawsuit. The brochure contained various medical documents regarding Bridg es' medical history and condition. Farmers claims that the medical records and other documents contained in the brochure demonstrated that “Bridge s' alleged injuries were highly suspect, her lost wages claim was inflated, and her$45,000 settlement demand was significantly excessive.” Appellee Br. at 3. Specifically, Farmers points out that Bridges claim ed fifty percent of $2,115.50 in medical bills for treatment of an epig astric problem, though she had a long history of stomach problems, including ulcer s beginning at age seventeen. Farmers references documents showing that a biopsy taken after the date of the accident revealed that Bridges suffered from a bact erial infection related to her stomach problems, and that she was treated with an antibiotic. Farmers points to Bridges' history of back problems as suggesting that Bridges' claim for medical expenses arising from treatment of her back injury was questionable. Additionally, Farmers refers to documents in the se ttlement brochure which suggest that Bridges was in fact working during the period she claimed she was unable to work.-6-

On December 23, 1991, Bridges sued Farmers. After the case was removed to federal court, the district court granted Farmer s’ motion for summary judgment. The court acknowledged there were factual disputes (1) as to whether a UM claim was made in the springtime or not until the October12 settlement brochure; and (2) as to the amount of Bridges' damages as set forth in the settlement brochure. It held, however, that these factual disputes did n ot preclude summary judgment because Farmers reasonably withheld payment of UM b enefits based upon these legitimate disputes. The Appellant presents two issues on appeal: “1. Wh ether the Trial Court erred in finding the existence of a legitimate disp ute over the amount of Plaintiff’s claim under the circumstances. 2. Whet her the Trial Court erred in finding there was a ‘legitimate litigable dispute’ as to when an underinsured motorist claim was presented.” Appellant Br. at 1.

II. LEGAL STANDARDS AND APPLICATION This court reviews the district court’s grant of su mmary judgment de novo

. See Regional Bank of Colorado v. St. Paul Fire & Ma rine Ins. Co. , 35 F.3d 494, 496 (10th Cir. 1994). Summary judgment is appropri ate only where the pleadings, admissions, and affidavits show there is no genuine issue as to any material fact and the moving party is entitled to j udgment as a matter of law. See Fed. R. Civ. P. 56(c); Regional Bank of Colorado , 35 F.3d at 496. When applying-7-

the summary judgment standard, the court is to "exa mine the factual record and reasonable inferences therefrom in the light most f avorable to the party opposing summary judgment." Applied Genetics Int’l Inc. v. First Affiliated Sec ., Inc. , 912 F.2d 1238, 1241 (10th Cir. 1990). The insurer bears an implied duty to deal fairly an d to act in good faith toward the insured. See Oulds v. Principal Mut. Life Ins. Co. , 6 F.3d 1431, 1436 (10th Cir. 1993); Christian v. American Home Assurance Co. , 577 P.2d 899, 904 (Okla. 1978). The insurer does not commit bad fait h, however, merely by refusing to pay or by litigating a claim, as long a s there is a legitimate dispute as to coverage or as to the amount of the claim, and a s long as the insurer's position is reasonable. See Oulds , 6 F.3d at 1436; see also Thompson v. Shelter Mut. Ins. , 875 F.2d 1460, 1462 (10th Cir. 1989). “Until the f acts, when construed most favorably against the insurer, have established what might reasonably be perceived as tortious conduct on the part of the in surer, the legal gate to submission of the issue to the jury remains closed. ” Oulds , 6 F.3d at 1437. As to Bridges’ first issue, the trial court did noterr in finding the existence of a legitimate dispute over the amount of Bridges’ claim under the circumstances. Bridges’ settlement brochure raisednumerous questions which created a legitimate dispute as to the amount of Br idges’ claim. These include questions directed to the origins of Bridges’ stoma ch and back problems, as well-8-

as to the length of time Bridges was actually unabl e to work. No inference of bad faith arises from such legitimate questions and dis putes. Oulds , 6 F.3d at 1442. As to Bridges’ second issue, there is a dispute whe ther Bridges made a UM claim to Farmers before the October settlement broc hure, either in April or June. That dispute, however, is not one of material fact. Assuming that such a UM claim was made in April or June, the facts reveal n othing in Farmers’ response to such alleged claim from which a reasonable inferenc e of bad faith could be drawn. Instead, the facts, as construed in Bridges ’ favor, reveal a dialogue between the insurer and the insured regarding the p ossibility of UM payments, a request by the insurer that the insured inform it o f the claim amount, and the eventual presentment of such amount by Bridges in the October settlement brochure. Bridges’ suggests this court infer that Farmers was motivated to delay, awaiting a settlement with the tortfeasor’s carrier . This suggestion, however, is not a substitute for evidence that Farmers failed t o timely and appropriately respond to the actual statements, inquiries, and su bmissions from Bridges’ attorney. Accordingly, this court AFFIRMS the summary judgment. ENTERED FOR THE COURT,
Michael R. Murphy Circuit Judge