Title: BARNES v. OKLAHOMA FARM BUREAU MUTUAL INS. CO.
Citation: 11 P.3d 162, 2000 OK 55, 71OBJ3219
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: July 18, 2000

BARNES v. OKLAHOMA FARM BUREAU MUTUAL INS. CO. Annotate this Case BARNES v. OKLAHOMA FARM BUREAU MUTUAL INS. CO. 2000 OK 55 11 P.3d 162 71 OBJ 3219 Case Number: 89745 Decided: 07/18/2000 Modified: 01/16/2001 Mandate Issued: 10/25/2000 As Corrected: January 16, 2001 (72 OBJ 353) Supreme Court of Oklahoma JULIE BARNES, Plaintiff/Appellee, and MICHAEL BARNES, by and through his mother and next friend, JULIE BARNES, Plaintiff, v. OKLAHOMA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant/Appellant. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY, STATE OF OKLAHOMA HONORABLE BRYAN DIXON, TRIAL JUDGE ¶0 Insured sued insurer for underinsured (UIM) motorist benefits and breach of the implied duty of good faith and fair dealing. She was awarded the $15,000 UIM policy limits by summary judgment; a jury verdict awarded her $10,000 actual and $1.5 million punitive damages on her tort theory of liability; and the trial judge awarded her $300,000 in attorney fees. In this appeal insurer asserts errors relating to the tort theory of liability and attorney fee award. The Court of Civil Appeals affirmed in all respects. We affirm the judgment entered on the jury verdict, but reverse the attorney fee award and remand that matter to the trial court for further proceedings. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; TRIAL COURT JUDGMENT ON JURY VERDICT AFFIRMED; TRIAL COURT JUDGMENT ON ATTORNEY FEES REVERSED AND REMANDED TO TRIAL COURT FOR FURTHER PROCEEDINGS. James A, Scimeca of Miller, Dollarhide, Dawson & Shaw and Joe E. White, Jr. of the White Law Firm, Oklahoma City, Oklahoma for Appellee. Robert B. Mills, Stefan K. Doughty and Margaret K. Myers of Mills & Associates, P. C., Oklahoma City, Oklahoma for Appellant. LAVENDER, J. ¶1 Appellee, Julie Barnes (Barnes or insured) sued appellant, Oklahoma Farm Bureau Mutual Insurance Company (insurer) in contract to recover underinsured motorist (UIM) benefits and in tort for breach of the implied duty to act in good faith and to deal fairly with her as its insured. The trial judge granted partial summary judgment to Barnes for the $15,000 UIM policy limits and that, by its actions, insurer had waived any claim to subrogation from the tortfeasor. A jury additionally awarded her $10,000 actual and $1.5 million punitive damages on the tort theory of liability, and the trial judge granted her $300,000 in attorney fees. In a prior appeal, the Court of Civil Appeals (COCA) affirmed the partial summary judgment. Barnes v. Oklahoma Farm Bureau Mut. Ins. Co. (Barnes I), 1993 OK CIV APP 168, 869 P.2d 852 .1 In this appeal insurer asserts errors relating to the tort theory of liability and the attorney fee award. The COCA affirmed in all respects. We previously granted certiorari review. ¶2 We hold: 1) the jury was presented sufficient evidence to find insurer breached the implied duty of good faith and fair dealing; 2) the trial judge did not err by submitting the issue of punitive damages to the jury or in lifting the statutory cap on such damages; 3) the punitive damage award is not excessive; and 4) adherence to the American Rule regarding the recovery of attorney fees requires reversal of the trial judge's attorney fee award and remand of that issue to the trial court for further consideration. Accordingly, we affirm the judgment based on the jury verdict, but reverse the attorney fee award and remand that matter back to the trial court for further proceedings. PART I. STANDARD OF REVIEW ON APPEAL. ¶3 The review standard regarding legal actions tried to a jury is: In an action at law, a jury verdict is conclusive as to all disputed facts and all conflicting statements, and where there is any competent evidence reasonably tending to support the verdict of the jury, [an appellate court] will not disturb the jury's verdict or the trial court's judgment based thereon. Where such competent evidence exists, and no prejudicial errors are shown in the trial court's instructions to the jury or rulings on legal questions presented during trial, the verdict will not be disturbed on appeal. In an appeal from a case tried and decided by a jury an appellate court's duty is not to weigh the evidence and determine which side produced evidence of greater weight, i.e. it is not an appellate court's function to decide where the preponderance of the evidence lies - that job in our system of justice has been reposed in the jury. In a jury-tried case, it is the jury that acts as the exclusive arbiter of the credibility of the witnesses. Finally, the sufficiency of the evidence to sustain a judgment in an action of legal cognizance is determined by an appellate court in light of the evidence tending to support it, together with every reasonable inference deducible therefrom, rejecting all evidence adduced by the adverse party which conflicts with it. (citations omitted)2 Florafax Intern., Inc. v. GTE Market Resources, Inc. ¶4 Unlike the review standard as to factual questions, issues of law are reviewed de novo and an appellate court has plenary, independent and non-deferential authority to reexamine a trial court's legal rulings. State ex. rel. Jones v. Baggett, PART II. FACTUAL AND PROCEDURAL BACKGROUND. ¶5 Barnes was injured in a head-on collision with another motorist in January 1991 [Barnes I, ¶6 By the end of August 1991 Barnes had incurred about $15,000 in medical bills. She also had lost wages over $10,000. A claim was made to recover UIM benefits from insurer and State Farm. In August she also sued Donaldson in tort and the two UIM insurers to recover under both policies. Believing its handling of her claim over the next several months was unreasonable, Barnes supplemented her petition to sue insurer for breach of the implied duty of good faith and fair dealing in March 1992. ¶7 In mid-1992 the trial judge granted partial summary judgment to Barnes for the $15,000 UIM policy limit and ruled insurer, by its actions, had waived its subrogation rights under 36 O. S. 1991, § 3636(E). However, she did not receive the $15,000 nor was she finally able to accept a $10,000 liability limit settlement offer from Donaldson and his liability carrier until Barnes I became final in 1994, i.e. until all avenues of appellate review concerning the partial summary judgment were exhausted by insurer. Barnes I was decided in October 1993 and certiorari review denied by this Court in February 1994. ¶8 That part of the suit for breach of the implied duty of good faith and fair dealing had been stayed pending resolution of the appeal in Barnes I. 869 P.2d at 853. After Barnes I, the case returned to the trial court and the tort theory of liability was tried to a jury in 1997. A main defense of insurer was: its handling of the UIM claim was reasonably based on its counsel's advice concerning the proper interpretation of § 3636(E) and, thus, its behavior in seeking a judicial forum to resolve what it supposedly considered a legitimate dispute as to the meaning of § 3636(E) could not be found tortious. Before jury submission, the trial judge lifted the cap on punitive damages, permissively allowing the jury to award punitive damages in an amount exceeding that awarded for actual damages. He also ruled the issue of whether Barnes was entitled to attorney fees, and the amount thereof, was subject to his post-verdict consideration and was not an issue for jury resolution and ascertainment as an item of damage recoverable as part of her tort theory of liability, as argued by insurer. PART IIA. INSURER'S TREATMENT OF BARNES' UIM CLAIM. ¶9 Initially, Barnes' husband apparently attempted to deal with any insurance claim. Within weeks of the accident, however, she retained counsel to represent her. An adjustor with insurer understood by the end of February 1991 the matter might turn into an UIM claim and in August 1991, he concluded Donaldson's liability seemed clear, i.e. his negligence caused the accident. As set out in Barnes I [869 P.2d at 853], the collision occurred while Donaldson was driving left of the center-line. Further, though insurer itself failed to evaluate her claim to determine the complete extent of her injuries or damages and it never placed a total monetary value on the claim, insurer's counsel either conceded to Barnes' counsel, or agreed with him there was no serious question, her damages were, at least, $50,000 (i.e. at least the amount of all available insurance coverage) prior to the time Barnes supplemented her petition to sue for bad faith. ¶10 Instead of evaluating her claim to determine the complete extent of her injuries or damages or placing some reasonable value on the claim, insurer essentially took the following stance concerning Barnes' claim. In November 1991 insurer's counsel informed it Donaldson's liability carrier would offer Barnes his liability limits of $10,000 to settle the case on his behalf. Also, although in November insurer did inform Barnes' counsel it would tender the $15,000 UIM limit to Barnes, no check for $15,000 was actually issued until February 1992 and the check was never sent to Barnes or her attorney, but was retained by insurer's counsel. At least in part, the reason(s) the check was never actually sent to Barnes was because of the parties' "dispute" regarding who would be entitled to Donaldson's liability coverage if Barnes accepted the check and because, prior to the check's issuance, Barnes had given notice to insurer under § 3636(E) of a tentative settlement with Donaldson for his $10,000 liability limits. The "dispute" arose over insurer's contention, based on its counsel's advice, that once it paid $15,000 to Barnes, it, rather than her would be entitled to Donaldson's $10,000 in liability coverage via a right of subrogation. ¶11 Though multiple specific shortcomings were presented to support Barnes' position that insurer breached its duty of good faith and fair dealing (e.g. failure to properly investigate the UIM claim, failure to make swift/prompt payment and failure to pay undisputed amounts), a central focus of her claim was insurer's response to the § 3636(E) notice of a tentative settlement with Donaldson for his liability policy limits sent to both UIM insurers in December 1991. Subsection 3636(E)(2) requires that, within sixty (60) days of the notice's receipt a UIM carrier must either substitute its own payment for the tentative settlement amount - i.e. it must pay its insured the amount of the tentative settlement - or, be deemed to have waived any subrogation rights against the tortfeasor for any amount paid under the UIM coverage. Of course, if the UIM carrier substitutes, the insured would not finally accept the tentative settlement because the UIM carrier would have substituted its payment for that offered by the tortfeasor and his liability carrier. Further, upon proper substitution, in addition to protecting its subrogation rights for any benefits paid under the UIM coverage, § 3636(E)(2) expressly provides that the UIM carrier is also entitled to any ultimate recovery (by settlement or judgment) from the tortfeasor, to the extent of the payment made in substitution of the tentative settlement. ¶12 Again, based on its counsel's advice, instead of making a true substitution for the tentative settlement as intended by § 3636(E)(2), insurer did actually send to Barnes' counsel a draft for $10,000, but maintained said check was both a part of the $15,000 UIM coverage and a proper substitution for the tentative liability limits settlement, which it would be entitled to recover back from any of Donaldson's assets, including his liability policy. It further insisted it now owed her only $5,000 under the UIM coverage. The $10,000 draft was accompanied by a receipt and partial release Barnes was supposed to execute before negotiating the draft. This document released insurer from $10,000 of its UIM obligation and, in effect, prohibited her from settling with Donaldson. In other words, insurer clung to the position that once it paid Barnes either $15,000 or $10,000, it, rather than her, would reap the benefit of or have a rightful claim of entitlement to the $10,000 liability coverage and, in effect, its ultimate or actual UIM responsibility to her was only $5,000. ¶13 Barnes, with her counsel's advice, refused to execute the receipt and partial release given that her signature on it would basically acknowledge agreement with insurer's position. The $10,000 draft was also returned and her counsel demanded insurer pay the $15,000 in UIM coverage to her, and either substitute its own $10,000 payment for the tentative liability limits settlement with Donaldson or waive its subrogation rights - the latter which would have allowed Barnes to finally accept the $10,000 tentative settlement with Donaldson and his liability carrier. ¶14 Insurer would not waive its subrogation rights or alter its position that the $10,000 was both a proper substitution under § 3636(E) and a part of the $15,000 in UIM benefits it owed to Barnes, which $10,000 it, rather than her would be entitled to recover back from Donaldson's $10,000 in liability coverage. It also never actually tendered to Barnes the additional $5,000 in UIM benefits. In effect, insurer's stance prevented settlement with Donaldson for his liability limits - in fact, the evidence was unquestionably sufficient to show insurer's express purpose was to block Barnes' attempt to settle with Donaldson for his liability limits because insurer claimed entitlement to the liability coverage once it paid either $10,000 or $15,000 to her. Insurer's stance also prevented any final resolution of the UIM claim and required the "dispute" between it and Barnes to be litigated. ¶15 Insurer insisted on litigating its purported "dispute" with Barnes even though the evidence was plainly sufficient to show any reasonable evaluation of her claim would have been, at least, $50,000 - i.e. the combined limits of Donaldson's liability policy and the two UIM policies, and that insurer and/or its counsel either knew this or would have known it had a reasonable evaluation been made of her claim. Further, insurer's claim of entitlement to Donaldson's liability coverage was taken even though it knew Barnes' special damages alone equaled or exceeded $25,000 (i.e. Donaldson's liability limit plus insurer's UIM limit) and insurer did not claim entitlement to any credit or reduction as to its UIM liability by virtue of the coverage provided by the other UIM insurer, State Farm. ¶16 The response of State Farm - the other UIM carrier - to the § 3636(E) notice was unlike insurer's response. Having evaluated her claim to be, at least, $50,000, State Farm merely paid its UIM limit of $25,000, without claiming entitlement to recover part of the payment back from Donaldson's $10,000 in liability coverage. Further, concluding Donaldson had no assets other than the liability policy, State Farm decided not to substitute its own $10,000 payment for the tentative settlement - instead waiving any subrogation rights as to its $25,000 UIM payment to Barnes. ¶17 As explained in more detail in PART III, infra, the advice insurer received from its counsel as to how to handle Barnes' UIM claim was patently unreasonable; it was contrary to the dictates of § 3636; it conflicted with then existing jurisprudential authority; and directly conflicted with an express provision of the insurance policy insurer issued to Barnes and her husband. Further, evidence was submitted sufficient to support a finding no attorneys that represented insurer in UM/UIM matters other than the counsel that represented it in the Barnes' case gave the same advice to it concerning the "interpretation" of § 3636 it adopted in the Barnes' case and, in fact, all other lawyers representing insurer in UM/UIM matters disagreed with the "interpretation" so adopted. The evidence was also sufficient to show any reasonable insurer would have understood that underinsurance under Oklahoma law provides coverage to an insured when the tortfeasor's liability coverage is insufficient to compensate the insured for injuries suffered and that Barnes was entitled to both the $15,000 in UIM coverage and the $10,000 from Donaldson's liability coverage [or its substituted equivalent from insurer under § 3636(E)]. ¶18 The evidence also warranted findings insurer was merely using a baseless argument concerning "interpretation" of § 3636(E) in an attempt to gain a tactical advantage in settlement negotiations with Barnes concerning her UIM claim and that one or more officials with insurer understood it was not making a true substitution under § 3636(E), but attempting to argue it could retain its subrogation rights anyway. The evidence also sufficiently showed that no reasonable insurer could have understood the $10,000 draft sent to Barnes could be considered both a true substitution under § 3636(E) for the tentative settlement and a part of the UIM coverage it owed to Barnes; but that any reasonable insurer would have understood the advice of its counsel was nothing other than a feigned/artificial attempt to reduce or take a credit against its UIM limit of liability based upon the liability coverage of the tortfeasor, Donaldson. ¶19 With Barnes the attempt to gain a tactical advantage in settlement negotiations was ultimately unsuccessful; although, as previously noted, she did not actually receive the $15,000 in UIM benefits nor was she allowed to finally settle with Donaldson for his $10,000 in liability coverage until 1994, i.e. until insurer had exhausted all avenues of appeal concerning Barnes I. However, evidence was submitted sufficient to show that insurer's treatment of Barnes was not an isolated incident, but that insurer, by and through its counsel, had used the same or similar unreasonable tactic with other UIM insureds repeatedly, i.e. relying on an unfounded claim to the tortfeasor's liability coverage in an attempt to settle disputes with its UIM insureds for less than they were rightfully owed under their UIM coverage. PART III. THE ADVICE INSURER RECEIVED FROM ITS COUNSEL WAS UNTENABLE AND THE JURY WAS ENTITLED TO FIND INSURER DID NOT HAVE A REASONABLE/GOOD FAITH BELIEF IN THAT ADVICE. ¶20 As already stated, a main defense of insurer was: it allegedly reasonably relied on its counsel's advice concerning the proper interpretation of § 3636(E) and, thus, its behavior in seeking a judicial forum to resolve, what it supposedly considered, a legitimate dispute could not be considered bad faith. The legitimate dispute defense is grounded in the following passage from Christian v. American Home Assur. Co., 1977 OK 141, 577 P.2d 899 , 904-905:8 We do not hold that an insurer who resists and litigates a claim made by its insured does so at its peril that if it loses the suit or suffers a judgment against it for a larger amount than it had offered in payment, it will be held to have breached its duty to act fairly and in good faith and thus be liable in tort. We recognize that there can be disagreements between insurer and insured on a variety of matters such as insurable interest, extent of coverage, cause of loss, amount of loss, or breach of policy conditions. Resort to a judicial forum is not per se bad faith or unfair dealing on the part of the insurer regardless of the outcome of the suit. Rather, tort liability may be imposed only where there is a clear showing that the insurer unreasonably, and in bad faith, withholds payment of the claim of its insured. Insurer claims a reasonable basis for its actions and, under Oklahoma law, bad faith cannot exist if an insurer's conduct was reasonable under the circumstances. See Manis v. Hartford Fire Ins. Co., ¶21 Although we agree a decision to withhold or delay payment, if based on a legitimate dispute or reasonable justification (legal or factual) cannot form the basis of bad faith tort liability - and in such a situation an insurer does not act at its peril in seeking judicial resolution of the dispute - the corollary of this recognition is that, a claim must be promptly paid unless the insurer has a reasonable belief the claim is either legally or factually insufficient. Buzzard, supra, ¶22 Title 36 O. S. 1991, § 3636 mandates uninsured motorist coverage be offered in every insurance policy insuring a vehicle unless waived by the insured. Buzzard, supra, For the purposes of this coverage the term "uninsured motor vehicle" shall also include 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. ¶23 Eighteen (18) months before Barnes' accident this Court expressed the meaning of § 3636(C) in the following language: "[a]n insured must be allowed to look to [her UIM] insurer when the liability limits of the negligent motorist prevent the insured from recovering fully [for] the injuries suffered." State Farm Auto. Ins. Co. v. Greer, ¶24 A review of § 3636(E) also reveals the patent unreasonableness of counsel's advice. That provision - in plain, explicit and unambiguous language - forecloses an UIM insurer from doing what insurer attempted to do to Barnes. It provides: E. In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer. Provided, however, with respect to payments made by reason of the coverage described in subsection C of this section, the insurer making such payment shall not be entitled to any right of recovery against such tort-feasor in excess of the proceeds recovered from the assets of the insolvent insurer of said tort-feasor. Provided further, that any payment made by the insured tort-feasor shall not reduce or be a credit against the total liability limits as provided in the insured's own uninsured motorist coverage. Provided further, that if a tentative agreement to settle for liability limits has been reached with an insured tort-feasor, written notice shall be given by certified mail to the uninsured motorist coverage insurer by its insured. Such written notice shall include: 1. Written documentation of pecuniary losses incurred, including copies of all medical bills; and 2. Written authorization or a court order to obtain reports from all employers and medical providers. Within sixty (60) days of receipt of this written notice, the uninsured motorist coverage insurer may substitute its payment to the insured for the tentative settlement amount. The uninsured motorist coverage insurer shall then be entitled to the insured's right of recovery to the extent of such payment and any settlement under the uninsured motorist coverage. If the uninsured motorist coverage insurer fails to pay the insured the amount of the tentative tort settlement within sixty (60) days, the uninsured motorist coverage insurer has no right to the proceeds of any settlement or judgment, as provided herein, for any amount paid under the uninsured motorist coverage. (emphasis added) Although never really set forth in any of its briefs in this appeal, in essence, insurer argued below that because the first sentence of § 3636(E) provides that: "[i]n the event of payment to any person [of UIM] coverage . . . [an] insurer making such payment shall . . . be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made []", there was a reasonable argument that upon its payment of either $15,000 or $10,000 to Barnes, it was entitled to or had some rightful claim to Donaldson's $10,000 liability limits. This argument is manifestly untenable. ¶25 The goal of statutory interpretation is to discern legislative intent. Neer v. Oklahoma Tax Com'n, ¶26 To understand § 3636(E) one cannot merely take out of context one sentence or part of a sentence, but the provision must be read in its entirety, including the other portions of § 3636(E) we have highlighted. When one does this it is unmistakable the highlighted portion of the first sentence of § 3636(E) cannot provide a basis, in this case, for insurer's claim to Donaldson's liability coverage. ¶27 Firstly, we note that Barnes could not merely accept the settlement offer made by Donaldson and his liability carrier for his $10,000 liability limits and give a general release therefor, because if she had she would have run the risk of forfeiting her own UIM coverage with insurer. This is so because this Court ruled in Porter v. MFA Mut. Ins. Co., ¶28 To protect its subrogation right(s) once notified of a tentative liability limits settlement, a UIM carrier must "substitute its payment to the insured for the tentative settlement amount" and "then [it will] be entitled to the insured's right of recovery to the extent of such payment and any settlement under the [UIM] coverage." § 3636(E)(2)(emphasis added). If no substitution is made the UIM "insurer has no right to the proceeds of any settlement or judgment, as provided herein, for any amount paid under the [UIM] coverage." § 3636(E)(2). ¶29 It is unmistakable from reading § 3636(E)(2) that a substituted payment for the tentative settlement being offered by Donaldson could not conceivably also be considered as a payment under the UIM coverage, the position taken by insurer. It is also unmistakable that a substitution for a tentative liability limits settlement offer, in order to protect the UIM carrier's subrogation rights, does not relieve the UIM carrier of its responsibility to pay to its insured the full amount of underinsurance coverage when a reasonable evaluation of the insured's injuries/damages equal or exceed the limits of both the tortfeasor's liability coverage and the UIM coverage. As the COCA correctly noted in Barnes I, "[a]lthough [insurer's] 'exposure' in this case is $25,000 if it had properly substituted Donaldson's [tentative] settlement, insurer would have been subrogated to Barnes' right to $10,000 and would only pay out the amount that it had contracted with Barnes to provide[,]" i.e. $15,000 - the latter amount also subject to potential recoupment by the UIM insurer from any available assets of the tortfeasor. ¶30 Not only was counsel's "interpretation" at odds with the unambiguous language of § 3636(E)(2), it was contrary to the proviso immediately preceding the substitution provisions of § 3636(E): "that any payment made by the insured tort-feasor shall not reduce or be a credit against the total liability limits as provided in the insured's own [UIM] coverage[]" and a provision of the policy it issued to Barnes stating: "[a]ny payment made by or on behalf of [an underinsured motorist] shall not reduce or be a credit against our [UIM] limit of liability." (emphasis added). ¶31 In a tort case against an insurer for breach of the implied duty of good faith and fair dealing (i.e. for bad faith) it is the unreasonableness of the insurer's actions that is the essence of the tort. Conti v. Republic Underwriters Ins. Co., [I]t is simply not enough for the carrier to say it relied on advice of counsel, however unfounded, and then expect that valid claims for coverage can be denied with impunity pursuant to such advice. The advice of counsel is but one factor to be considered in deciding whether the carrier's reason for denying a claim was arguably reasonable. We believe that where, through verbal sleight of hand, the advising attorney concocts an imagined loophole in a policy whose plain language extends coverage, such advice is heeded at the carrier's risk. Szumigala v. Nationwide Mutual Ins. Co. ¶32 The ultimate question is whether sufficient evidence was presented to show insurer's purported reliance on its attorney's advice was unreasonable. We think so. The evidence warranted findings counsel's advice was wholly unfounded; it was contrary to the unmistakable meaning of the relevant provision(s) of § 3636; it was at odds with existing case law recognizing the legislative intent behind underinsurance coverage; it was inconsistent with a provision of the insurance policy issued to Barnes; and was nothing other than verbal sleight of hand. Sufficient evidence was presented to show insurer could not have had a good faith/reasonable belief that its counsel's advice was reasonable or provided a legitimate basis for its treatment of Barnes' UIM claim. Instead, the jury was entitled to conclude insurer was unreasonably attempting to reduce or take a credit against its own UIM responsibility for the amount Donaldson was offering to pay to Barnes, while at the same time arguing it could protect its subrogation rights against him without compliance with the unambiguous relevant terms of § 3636(E). ¶33 In effect, insurer never really offered to pay Barnes any more than $5,000 in UIM coverage. As stated in Barnes I [869 P.2d at 855]: The tendered $10,000.00 was not a "substitution" of Donaldson's insurer's settlement [offer] but a tender of only a portion of the [UIM] benefits which Barnes was due. Under [insurer's] rationale, [it] would tender $15,000.00 to Barnes and [] would receive Donaldson's $10,000.00 in liability benefits, making [its] net payment [only] $5,000.00. Or [insurer] could tender $10,000.00 to Barnes in "substitution" of Donaldson's $10,000.00 settlement [offer], and [it] would have full subrogation against Donaldson for $10,000.00. Under this last scenario, [insurer] would tender only $5,000.00 which would be its UIM limit after the $10,000.00 "substitution". In either case, all [insurer] really offered Barnes was $5,000.00 of her contracted coverage, $15,000.00. Insurer's actions forced Barnes into approximately two years of unnecessary litigation concerning her UIM claim, even though any reasonable evaluation of her injuries/damages would have shown her entitlement to the full amount of UIM coverage from insurer and the $10,000 from Donaldson's liability limits settlement offer [or its equivalent from insurer under § 3636(E)] . The bottom line here is: the jury had before it sufficient evidence to find insurer's treatment of Barnes' UIM claim was patently unreasonable; at a minimum, insurer acted in reckless disregard of its duty of good faith and fair dealing toward her; and its actions were taken in a bad faith attempt to delay or withhold the rightful insurance benefits to which she was entitled. PART IV. WE CAN FIND NO ERROR IN THE TRIAL JUDGE'S DECISIONS TO SUBMIT THE ISSUE OF PUNITIVE DAMAGES TO THE JURY OR TO LIFT THE CAP ON SUCH DAMAGES. ¶34 This Court has recognized the availability of punitive damages in a bad faith case is not automatic, but is governed by the standard applicable in other tort cases. Buzzard, supra, A. In any action for the breach of an obligation not arising from contract, where the defendant has been guilty of conduct evincing a wanton or reckless disregard for the rights of another, oppression, fraud or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example, and by way of punishing the defendant, in an amount not exceeding the amount of actual damages awarded. Provided, however, if at the conclusion of the evidence and prior to the submission of the case to the jury, the court shall find, on the record and out of the presence of the jury, that there is clear and convincing evidence that the defendant is guilty of conduct evincing a wanton or reckless disregard for the rights of another, oppression, fraud or malice, actual or presumed, then the jury may give damages for the sake of example, and by way of punishing the defendant, and the percentage limitation on such damages set forth in this section shall not apply. B. The provisions of this section shall be strictly construed. Section 9 provides two levels for an award of punitive damages. Sides v. John Cordes, Inc., ¶35 Insurer challenges both the trial judge's decision to submit the punitive damage issue to the jury at all and to allow the jury to award such damages in an uncapped amount based on his determination there was clear and convincing evidence of, at least, one of the enumerated factors specified in § 9. We have already set out much of the evidence supporting the trial court's determination to submit the issue of punitive damages to the jury in PART II, supra. In PART III, supra, we have explained why the advice insurer was receiving from its counsel was utterly untenable and could not have been reasonably relied on by insurer. No purpose would be served by repeating these matters here. ¶36 It is quite clear from our recitation and analysis above, the trial judge had before him evidence that warranted findings insurer had no actual defense to Barnes' UIM claim; its assertion of a rightful claim to Donaldson's liability coverage was not based on any reasonable or legitimate ground, but was merely a feigned or contrived attempt to gain some advantage in regard to settling Barnes' UIM claim; and insurer's unreasonable treatment of Barnes was not an isolated incident, but the same or similar tactic was used by insurer repeatedly with other insureds. Our review of the record convinces us there was clear and convincing evidence supporting a determination, at a minimum, insurer acted in reckless disregard for the rights of Barnes and a finding of a complete indifference to its duty to treat her UIM claim fairly. PART V. THE PUNITIVE DAMAGE AWARD IS NOT EXCESSIVE. ¶37 Insurer also challenges on appeal the purported excessiveness of the $1.5 million punitive damage award assessed by the jury. The COCA did not reach the issue on the ostensible bases insurer failed to raise the issue below and it was, therefore, not preserved for appellate review. In effect, the COCA determined insurer failed to preserve the excessiveness issue for appellate review because insurer could have, and should have, raised the excessiveness issue by virtue of a motion for new trial under 12 O. S. 1991, § 651(Fourth)(excessive damages appearing to have been given under the influence of passion or prejudice) or by virtue of a motion for remittitur. ¶38 Title 12 O. S. 1991, § 991(a) provides in pertinent part that "[t]he right of a party to perfect an appeal from a judgment, order or decree of the trial court to the Supreme Court shall not be conditioned upon his having filed in the trial court a motion for new trial . . ." Before passage of § 991(a) in 1968 [1968 Okla. Sess. Law, Ch. 395, § 1], in order for a party to preserve for appellate review an issue relating to a judgment or final order, the party was required to file a motion for new trial in the trial court. See Stokes v. State, ¶39 Here, insurer's excessiveness issue essentially challenges the sufficiency of the evidence to support a $1.5 million punitive damage verdict and, in our view, such challenge was preserved because insurer at all appropriate times challenged the propriety of submitting, for the jury's consideration, the issue of punitive damages. Insurer demurred to Barnes' evidence on the issue of punitive damages at the close of her case in chief and the trial judge overruled the demurrer. Insurer also asked for a directed verdict and objected to lifting the cap on punitive damages at the close of all the evidence. The trial judge denied the directed verdict quest and, as discussed in PART IV in the text, the trial judge lifted the cap on punitive damages. Finally, insurer objected to submitting the issue of punitive damages to the jury by virtue of its objection to Trial Court Jury Instruction No. 18, the punitive damage instruction, which permissively allowed the jury to award punitive damages in an amount exceeding actual damages. ¶40 Even though we determine the issue was properly preserved and is subject to appellate review, in our opinion, no valid reason has been put forward by insurer to reverse or modify downward the amount of punitive damages awarded by the jury. Punitive damages are allowed for the benefit of society as punishment. Chandler v. Denton, ¶41 As to the amount of punitive damages - if any was allowed by the jury - Instruction No. 18 guided the jury's discretion by setting out the factors specified in Oklahoma Uniform Jury Instructions (OUJI), Civil, Instruction No. 5.5. The factors were: the harm caused or likely to be caused by insurer's conduct; the degree of wrongfulness of the conduct; how long the conduct lasted and whether it was likely to continue; whether insurer engaged in other similar conduct and, if so, how often; insurer's awareness of its conduct and its consequences, and whether it attempted to conceal the conduct; whether insurer benefitted from the conduct and, if so, whether the benefit should be taken away; the need to discourage others from similar conduct; and the financial resources of insurer. Insurer does not challenge on appeal the substantive correctness of Instruction No. 18 in regard to such factors. Nor, in our view, has insurer shown that the jury was motivated in its assessment of the proper amount of punitive damages by passion, prejudice or improper sympathy. ¶42 As we have already detailed in previous parts of this opinion, insurer's handling of Barnes' UIM claim was patently unreasonable and the jury was entitled to find insurer had absolutely no valid defense to her claim. It was proper for the jury to conclude insurer's handling of her claim was wholly reckless and exhibited a complete indifference to its duty to treat the UIM claim fairly. The evidence sufficiently showed any reasonable insurer would have understood that Barnes was entitled to both the $15,000 in UIM coverage and the $10,000 from Donaldson's liability coverage [or its substituted equivalent from insurer under § 3636(E)]. Yet, insurer unreasonably deprived Barnes of these benefits for an extended period of time and it forced her to litigate her entitlement to the full $25,000 based on an untenable argument insurer had some valid claim to Donaldson's liability coverage. ¶43 The jury was also entitled to find insurer was merely using a purported "interpretation" of § 3636(E) as a ploy to gain a tactical advantage in settlement negotiations with Barnes concerning her UIM claim and that one or more officials with insurer understood it was not making a true substitution under § 3636(E). The evidence also supported a finding any reasonable insurer would have understood the advice of its counsel was nothing other than a feigned/artificial attempt to reduce or take a credit against its UIM limit of liability based upon the liability coverage of the tortfeasor, Donaldson. The jury was also entitled to find that insurer's treatment of Barnes was not an isolated incident, but that insurer, by and through its counsel, had used the same or similar unreasonable tactic with other UIM insureds repeatedly, i.e. relying on an unfounded claim to the tortfeasor's liability coverage in an attempt to settle disputes with its UIM insureds for less than they were rightfully owed under their UIM coverage. There was also evidence presented concerning the financial wealth/resources of insurer. ¶44 In light of the evidence presented in this record, we simply cannot say a $1.5 million punitive damage award is somehow grossly excessive or the result of passion, prejudice or improper sympathy. To rule otherwise would merely be an improper replacement of our verdict for that given by the jury, something we are not willing or warranted in doing. Accordingly, we uphold the punitive damage award and determine insurer's claim of excessiveness is without merit. PART VI. ADHERENCE TO THE AMERICAN RULE REGARDING THE RECOVERY OF ATTORNEY FEES REQUIRES REVERSAL OF THE TRIAL JUDGE'S ATTORNEY FEE AWARD AND REMAND OF THAT ISSUE TO THE TRIAL COURT FOR FURTHER CONSIDERATION. ¶45 As set out in PART II, supra, the trial judge ruled the issue of whether Barnes was entitled to attorney fees, and the amount thereof, was subject to his post-verdict consideration and was not an issue for jury resolution and ascertainment as an item of damage recoverable as part of her tort theory of liability. After the jury trial was concluded Barnes moved for the recovery of attorney fees and the trial judge, after considering the parties' legal arguments and holding an evidentiary hearing, determined she was entitled to attorney fees in the amount of $300,000. Relying on Brashier v. Farmers Ins. Co., Inc. ¶46 In Oklahoma, the right of a litigant to recover attorney fees is governed by the American Rule. TRW/Reda Pump v. Brewington, ¶47 Brashier, like the present case, involved a suit by an insured against his UM carrier for breach of the implied duty of good faith and fair dealing. 925 P.2d at 23. One of the issues in Brashier was whether, as victor against his UM carrier for bad faith refusal to pay an insurance loss, the insured was entitled to recover a counsel fee. Id. at 22. This Court held even though a statute [36 O. S. 1991, § 3629(B)] expressly disallows recovery of counsel fees by the prevailing party in an action to enforce UM coverage, such disallowance did not foreclose an insured from the recovery of counsel fees as an element of the insured's damage recovery for insurer's bad faith refusal to pay the claim. 925 P.2d at 23-25, 27. Section 3629(B) allows for the recovery of attorney fees in insurance-related litigation in the following language: B. It shall be the duty of the insurer, receiving a proof of loss, to submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt of that proof of loss. Upon a judgment rendered to either party, costs and attorney fees shall be allowable to the prevailing party. For purposes of this section, the prevailing party is the insurer in those cases where judgment does not exceed written offer of settlement. In all other judgments the insured shall be the prevailing party. If the insured is the prevailing party, the court in rendering judgment shall add interest on the verdict at the rate of fifteen percent (15%) per year from the date the loss was payable pursuant to the provisions of the contract to the date of the verdict. This provision shall not apply to uninsured motorist coverage. (emphasis added) As can be readily seen by the bolded language, § 3629(B) excludes uninsured motorist litigation from its ambit. ¶48 Notwithstanding the exclusion, Brashier relied on Christian, supra to hold that attorney fees were a part of the common law damages an insured was entitled to recover when such fees were incurred or caused by the insurer's bad faith withholding of the policy benefits. See Brashier, 925 P.2d at 24. Brashier misinterpreted and misapplied Christian. In Christian the insured was a participant in a group disability policy. 577 P.2d at 900. He sustained an injury leaving him permanently and totally disabled. Id. He made claim under the disability policy with the insurer, but the insurer refused to pay him any benefits under the policy. Id. Insured sued the insurer in contract to recover the maximum amount of benefits due under the policy in the District Court of Garvin County. Id. Although insurer refused to pay the disability claim and fully litigated the contract action, it became apparent during trial that insurer did not have, and had never had, a defense to its insured's claim. Id. The insured won a judgment for the maximum policy benefits, plus interest. Id. The insured then sued insurer in the District Court of Oklahoma County seeking to impose liability on insurer for its bad faith refusal to pay his valid disability claim. Id. Part of the damages he sought in the Oklahoma County case were the attorney fees he expended in prosecuting the Garvin County action. Id. In other words, the attorney fees purportedly caused by the insurer's bad faith refusal to pay his disability claim. ¶49 Although in Christian the attorney fees expended in prosecuting the Garvin County action were sought by the insured as part of the damages purportedly caused by the insurer's bad faith refusal to pay his disability claim, this Court did not approve their recovery as an element of damage caused by the refusal to pay the disability claim. What Christian held was that the attorney fees the insured expended in prosecuting the Garvin County action were potentially recoverable from the insurance company - as a recognized equitable exception to the American Rule - if the trial court in the second action brought on a tort theory of recovery found the insurance company had engaged in litigation misconduct in the Garvin County action. Christian, supra, ¶50 Christian cited to City National Bank & Trust Co. v. Owens, ¶51 To the extent Brashier held attorney fees were recoverable by a UM/UIM insured against his/her insurance company as an element of the insured's damage recovery for a bad faith refusal to pay a claim, it is quite plain that Brashier misinterpreted Christian and went beyond the explicit holding of the Christian court. Brashier so held without mentioning or discussing the firm establishment of the American Rule in Oklahoma. If we were to follow Brashier here we would be led to the conclusion that, as a common law element of the damages caused by the tort, the determination of the recoverable fees must be made by the trier of fact, i.e. by the jury, unless the parties stipulate otherwise. Such is the case because 12 O. S. 1991, § 556 provides: Issues of law must be tried by the court, unless referred. Issues of fact arising in actions for the recovery of money, or of specific real or personal property, shall be tried by a jury, unless a jury trial is waived, or a reference be ordered, as hereinafter provided. (emphasis added) Obviously, the instant matter was a law action for the recovery of money. However, we cannot continue to follow Brashier because, as we have explained above, Brashier failed to follow the holding of Christian as to the potentiality for the recovery of attorney fees - i.e. an inherent equitable exception to the American Rule for bad faith, vexatious, wanton or oppressive litigation misconduct. Further, Brashier mistakenly interpreted the import of Christian to allow the recovery of attorney fees as part of the common law damages an insured was entitled to recover on the basis such fees were incurred or caused by the insurer's bad faith withholding of the policy benefits. Instead, we decide that Brashier should be and is overruled to the extent it improperly deviated from the American Rule. ¶52 Although there are situations where a plaintiff may be able to recover attorney fees as part of his/her damages in either a contract or tort claim, neither the situation existent in Brashier nor the instant matter is one of them. The easiest understood example of when attorney fees are recoverable as damages is where an attorney sues his client to recover a reasonable attorney fee for services rendered when the client refuses to pay. See Wolfe v. Campbell, ¶53 Yet another example is where the wrongful acts of the defendant have involved the plaintiff in litigation with others, or have placed him in such relation with others as to make it necessary for him to incur attorney fees to protect his interests, attorney fees being recoverable in such cases as one of the elements of damages flowing from the original wrongful act of the defendant. Griffin v. Bredouw, ¶54 The situation in Brashier - as the situation in the present Barnes' matter - is unlike that dealt with by this Court in Wolfe, Timmons and Griffin. Obviously, Wolfe is distinguishable. Neither Brashier nor the instant matter involve a suit by an attorney to recover fees from a client for services rendered. Timmons is inapplicable because there a contractual duty existed to provide a defense to suits brought against the insured for the insured's liability to third parties, which was wrongfully withheld by the insurance company - i.e. the insurance company had a contractual duty to provide its insured with legal counsel when the insured was sued by his passengers. In Brashier and in the present case we are not dealing with the wrongful or tortious withholding of legal counsel in violation of contractual duty, but with the wrongful withholding of the monetary policy benefits. Finally, Griffin is distinguishable because neither in Brashier nor Barnes is there any claim that the conduct of the insurer involved the insured in litigation with others, or placed either in such relation with others as to make it necessary to incur attorney fees to protect their interests. ¶55 In our view, to continue along the path seemingly charted by Brashier would be to undermine the firm establishment of the American Rule in Oklahoma without a solid rationale or stable foundation. It would also improperly expand those damages historically recognized as recoverable in both contract and tort cases. In short, we can no longer sanction the teaching of Brashier and remain true to the American Rule principle that attorney fees, with certain limited exceptions, are not recoverable in the absence of contractual provision or specific statutory authority allowing their recovery. If attorney fees are to be recoverable in UM/UIM litigation brought by an insured against his/her insurer, like that brought here by Barnes, in our view, it is the Legislature that must authorize such a course, as it has done for other types of insurer/insured litigation in § 3629(B). ¶56 In that we have decided to no longer follow Brashier because it represents an incorrect exposition of Oklahoma law as to the recovery of attorney fees in this type of case and Brashier does support insurer's claim that error occurred by virtue of the trial judge deciding the attorney fee question, rather than submitting the issue to the jury as a recoverable item of damage under insured's claim for bad faith, we must reverse the attorney fee award of the trial judge. However, because Barnes did not have the benefit of our ruling in this case when fashioning her attorney fee quest in the trial court, we remand to the trial court to give her an opportunity to apply for fees under a recognized exception to the American Rule. As both Christian and Owens recognized, one such exception is, where an opponent engages in bad faith, wanton or oppressive litigation misconduct, a trial court, in the exercise of its inherent equitable power, may award attorney fees. Whether Barnes can prove herself entitled to such fees under the Owens exception will be a question for the trial court upon proper presentation of pleadings and proof. See Christian, supra, 577 P.2d at 906. PART VII. CONCLUSION. ¶57 In summary, the jury was presented sufficient evidence to find insurer breached the implied duty of good faith and fair dealing. Further, the trial judge did not err by submitting the issue of punitive damages to the jury or in lifting the statutory cap on such damages. Insurer's appellate assertion the punitive damage award is excessive was preserved for appellate review; however, insurer has failed to show the punitive damage award of the jury is excessive. Finally, the award of attorney fees to Barnes must be reversed and remanded to the trial court to afford Barnes the opportunity to apply for fees under a recognized exception to the American Rule. ¶58 Accordingly, the Court of Civil Appeals' Opinion is VACATED; the trial court judgment on jury verdict is AFFIRMED; and the trial court judgment on attorney fees is REVERSED and REMANDED to the trial court for further proceedings. ¶59 SUMMERS, C.J., HODGES, LAVENDER, KAUGER, WATT, BOUDREAU and WINCHESTER, JJ., concur. ¶60 OPALA, J., dissents. ¶61 HARGRAVE, V.C.J., disqualified. FOOT