Opinion ID: 1444079
Heading Depth: 1
Heading Rank: 2

Heading: is one who issues a public liability policy under the oklahoma competitive bidding act estopped under oklahoma law from denying coverage as specified under the standard specifications for highway construction?

Text: ¶ 13 To discuss this certified question we must point out that although Aetna is precluded from denying coverage to Carpenter, the basis of this decision is not estoppel, but rather the Competitive Bidding Act and the Standards Governing Highway Construction. Estoppel is a legal concept which bars a party from alleging or denying certain rights which might otherwise have existed because of the party's voluntary conduct. Apex Siding & Roofing Co. v. First Federal Sav. & Loan Ass'n, 1956 OK 195, 301 P.2d 352 (Okla.1956). Estoppel requires good faith reliance upon a representation or position by the party asserting estoppel. First State Bank v. Diamond Plastics, 1995 OK 21, 891 P.2d 1262, 1272 (Okla.1995). While estoppel may be applicable in the present situation we cannot make that determination, because there are insufficient facts before us to show that Carpenter relied on conduct or statements made by Aetna. See United Pacific Insurance Co. v. Meyer, 305 F.2d 107 (9th Cir.1962) (court held that because Idaho required liability insurance to cover both contractors and subcontractors and because insurer issued certificate stating that contractor had insurance, insurer was estopped from denying coverage to subcontractor). ¶ 14 However, our Oklahoma statutes mandate that before highway construction may begin, public liability insurance covering the contractor and all other parties who will perform construction work must be obtained and a certificate showing compliance with this requirement must be given to the awarding public agency. 61 O.S.1991 §§ 103 and 113. The DOT's regulations, as found in the Standards for Highway Construction, Section 107.13, require insurance for the contractor and all persons who will be assigned work under the construction contract: The Contractor shall carry insurance of the following kinds and amounts on all Department Contracts: 2. Insurance for Subcontractor's and Contractor's Protective Public Liability and property Damage Liability Insurance. In the event that any of the work to be performed by the Contractor on the project is sublet or assigned, or is otherwise to be performed by any one other than the Contractor's own employees, then the insurance specified above shall extend to cover such work. This insurance requirement cannot be waived; it is mandatory. Carpet City, 536 P.2d at 338 (Okla.1975). ¶ 15 In the facts presented by the Federal District Court Aetna admitted that it contracted with Shears to provide the public liability insurance required by state law. Aetna's agent issued a certificate of insurance stating that public liability insurance was being provided as required by the Department of Transportation and the State of Oklahoma.  ¶ 16 While the facts presented to this Court by the Federal District Court are not conclusive as to whether the elements of estoppel are met, we observe that as a matter of Oklahoma law Aetna is precluded from denying liability coverage to any subcontractor who performed work on the state highway contract awarded to Shear. The Competitive Bidding Act was enacted to protect the taxpaying public and must be construed so as to protect the public interest. Rollings Construction, 745 P.2d at 1178 (Okla.1987). The only way to protect the public interest is to enforce the mandatory provisions of Section 113 and Department of Transportation Regulations, specifically Section 107.13. Insurers are not permitted to write and enforce insurance contracts which contravene state law. See Young v. Mid-Continent Cas. Co., 1987 OK 88, 743 P.2d 1084 (Okla.1987) (insurance contract which excluded coverage for members of household under twenty-five years old was not enforceable because it violated the legislative intent of statutorily-required liability insurance); Nation v. State Farm Insurance Co., 1994 OK 54, 880 P.2d 877 (Okla.1994) (household exclusion in insurance contract was invalid as it violated the legislative mandate for compulsory liability insurance). Aetna's denial of coverage to Carpenter is in direct contravention of the Competitive Bidding Act and the Standards of Highway Construction.