Court Opinion

ID: 9567965
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:59:20.801945+00
Date Added: 2024-06-11T10:24:05.774572
License: Public Domain

OPALA, Justice,
concurring.
¶ 1 Although I accede to the court’s pronouncement, I write separately to explain my unqualified concurrence in that part of today’s opinion which allows the insurer to recover not only the amount of the fraudulent loss paid but also the expenses of the insurer’s fraud-targeted investigation.
¶ 2 A tort can arise in the course of one’s contract performance.1 The party harmed by a tortious act or omission of another, which occurs in the latter’s contract performance, may choose between a claim ex delic-to or one ex contractu.2
¶ 3 The plaintiff-insurer had a contract claim against the insured based on fraudulent breach. See the provisions of 15 O.S. 1991 § 58.3 Mrs. McCant’s [insured’s] proof of loss fits squarely into the cited statute’s definition of contract-related fraud: she “suggested]” untrue facts, made “positive assertion[s]” of unwarranted information and “suppressed]” that which was true.4 The plaintiff-insurer also had a tort claim because the insured’s conduct in breaching the contract constitutes a common-law delict of deceit. Insurer’s choice of tort as the gravamen of its action is hence legally supportable.
¶ 4 The plaintiffs preference for tort over contract has no effect on the quantum of insurer’s monetary recovery for investigation expenses. The very same damages are the insurer’s due in this case whether its claim be deemed actionable in contract or in tort. The measure of insurer’s contract-based damages is governed by Hadley v. Baxen-dale.5 Hadley, the seminal English case *303which is the law in Oklahoma, holds that the non-breaching party may receive, in addition to any other damages that were within the contemplation of the parties at the time of the contract’s making, only the value of the contract lost as a result of the breach.6 The Restatement (Second) of Contracts expresses the same measure in § 351.7
¶ 5 More encompassing than ' contract damages, tort reparations include compensation for all proximately caused harm, whether foreseeable or not.8 The wrongdoer is liable ex delicto for the whole loss occasioned by the offending act or omission9 and must place the harmed party in the same position as that which it occupied before the tort occurred.10
¶ 6 Measured by these standards, the investigation expenses in this case are recoverable under both theories. When purchasing the policy the insured should have foreseen that a thorough investigation would follow the insurer’s receipt of a proof of loss that bore the earmarks of fraud. Hadley, the Restatement (Second) and Oklahoma jurisprudence all lend support to the insurer’s ex contractu recovery of investigation costs. If, on the other hand, tort standards were to be applied, the insurer cannot be made whole sans recovery of the same costs. But for the insured’s fraudulent demand, the insurance company would not have been required to expend $31,499.4911 to determine that its payment of indemnity was rested on the insured’s deceit. In order to restore the insurer to its pre-harm position, that much and no less is the insurer’s due under the tort theory.
¶ 7 The insurer’s remedy was neither confined in this case to contract law nor to ex contractu recovery of the fraudulent loss paid. There was no error in the insurer’s choice of tort as the gravamen of its claim. Extant jurisprudence firmly supports the insurer’s ex delicto recovery of expenses incident to uncovering the insured’s fraud.

. Keel v. Titan Const. Corp., 1981 OK 148, 639 P.2d 1228, 1232.

. Great Plains Federal Sav. and Loan Ass’n v. Dabney, 1993 OK 4, 846 P.2d 1088, 1093-94 n. 3 (Opala, J., concurring); Panama Processes, S.A. v. Cities Serv. Co., 1990 OK 66, 796 P.2d 276, 289; Hall Jones Oil Corporation v. Claro, 459 P.2d 858, 861 (Okl.1969); Morriss v. Barton, 200 Okl. 4, 190 P.2d 451, 457 (1948); Oklahoma Nat. Gas Co. v. Pack, 186 Okl. 330, 97 P.2d 768, 770 (1939) (quoting 1 R.C.L. 321); Owens v. State, 133 Okl. 183, 271 P. 938, 942 (1928); Chicago, R.I. &P. Ry. Co. v. Harrington, 44 Okl. 41, 143 P. 325, 327 (1914); Hobbs v. Smith, 28 Okl. 556, 115 P. 345, 350 (1911).

. The terms of 15 O.S.1991 § 58 are:
Actual fraud, within the meaning of this chapter [contract], consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:
1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true.
2. The positive assertion in a manner not warranted by the information of the person making it, of that which is not true, though he believe it to be true.
3. The suppression of that which is true, by one having knowledge or belief of the fact.
4. A promise made without any intention of performing it; or,
5. Any other act fitted to deceive.

. See id.

. Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854); see Florafax Intern., Inc. v. GTE Mkt. Resources, Inc., 1997 OK 7, 933 P.2d 282, 292.

. William v. Roth, Tort Liability for Bad Faith in Montana: The End of the Story, 57 Mont.L.Rev. 567, 568-6 (1996). Hadley demonstrates a lais-sez-faire industrialist influence by allowing "efficient breach” — a special exception to tortious damages. Id. (citing Richard Danzig, Hadley v. Baxendale: A Study in the Industrialization of the Law, 4 J. Legal Stud. 249, 259-60, 264-65 (1975).)

. Restatement (Second) Of Contracts § 351 states in pertinent part:
(1) Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made.
(2) Loss may be foreseeable as a probable result of a breach because it follows from the breach
(a) in the ordinary course of events, or
(b) as a result of special circumstances, beyond the ordinary course of events, that the party in breach had reason to know.

. The terms of 23 O.S.1991 § 61 provide:
"For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this chapter, is the amount which will compensate for all detriment proximately caused thereby, whether it could have been anticipated or not.” [Emphasis supplied]

. The provisions of 76 O.S.1991 § 2 are:
“One who willfully deceives another, with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers." [Emphasis supplied]
Denco Bus Lines, Inc. v. Hargis, Okl., 204 Okla. 339, 229 P.2d 560, 562 (1951).

. LeFlore v. Reflections of Tulsa, Inc., 1985 OK 72, 708 P.2d 1068, 1076; Restatement (Second) Of Torts § 549.

. The plaintiff paid the insured’s mortgage holder $41,722.64 under the loss payable clause of the policy and incurred $31,499.49 in investigation costs.