Court Opinion

ID: 9558793
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:16:47.368158+00
Date Added: 2024-06-11T09:09:35.704658
License: Public Domain

BRIGHTMIRE, Chief Judge,
concurring in part and dissenting in part.
I agree that the summary judgment should be vacated but I dissent from the majority, which goes further and excises various theories of recovery from the plaintiff’s lawsuit.
I
Here an action was brought by a customer against his bank, a loan officer, and an insurance company, seeking the recovery of damages on the basis of three theories: negligence, fraud, and bad faith breach of an agreement to secure consumer credit disability insurance requested by the customer.
The trial court granted a summary judgment to the defendants because the customer’s debt to the bank had been discharged in bankruptcy.
More specifically the material facts are that on October 24, 1985, the plaintiff, Norman J. Coble, borrowed $15,141.16 from the defendant, First State Bank of Tahle-quah, in order to purchase a 1986 Ford truck. The amount financed was to include $921.97 in credit disability insurance premiums. The policy was purchased by Coble on the suggestion of a bank employee, Linda Woodward. After the loan documents were signed, the defendant, Melinda Bowers, a loan officer for the bank, was advised by the defendant, First Life Assurance Company, that First Life would not write a credit disability policy without a credit life policy. Based merely on an assumption that Coble would not wish to purchase both credit life and credit disability insurance, Bowers directed First Life to only issue a credit life policy and to refund to the bank the difference in premiums. The amount refunded was then applied to reduce the loan balance.
On November 30, 1985, First Life issued an endorsement to the policy reflecting a change in premiums from $921.97 to $681.43. Bowers claims she mailed a copy of this endorsement to Coble shortly after December 10, 1985.
Then in June of 1986, Coble sustained a disabling injury while doing construction work with his brother. On September 22, 1986, Coble made a written claim for benefits under the credit disability policy. The claim was denied on September 30,1986, on *74the basis that his policy was for credit life and did not include credit disability. On October 7, 1986, Bowers wrote Coble a letter explaining what had happened with respect to his application for disability insurance. On October 21, 1986, First Life also wrote Coble a letter explaining the reasons for the denial of his claim.
On October 30, 1986, Coble filed this action in the District Court of Cherokee County. On August 12, 1987, Coble filed a bankruptcy petition in the United States Bankruptcy Court for the Northern District of Oklahoma. The bankruptcy court determined that Coble was entitled to an exemption up to $50,000 for any damage award for emotional distress. Any awards for breach of contract or punitive damages were deemed by the bankruptcy court to be non-exempt property of the estate over which the trustee could exercise control. Coble was granted a discharge of the indebtedness owed to the bank, and the bank released its security interest in the truck.
Each of the parties filed a motion for summary judgment in the trial court. They were heard July 29, 1988. Coble's motion was denied, but the motion of each defendant was granted. Coble appeals.
II
In my opinion the order granting summary judgment to each of the defendants should be vacated in it entirety, and Coble should be given the opportunity to present his case to a jury on all three theories of recovery, i.e., negligence, fraud, and bad faith. The record discloses material issues of fact pertaining to all three theories. C.I.T. Corp. v. Shogren, 176 Okl. 388, 55 P.2d 956 (1936); Whitney v. Miller, 158 Okl. 294, 13 P.2d 110 (1932).
Aside from the foregoing case law, it should also be borne in mind that under the simplified pleading code, the pleader need only show that he is entitled to relief in order to give his adversary notice of what his claim is and the grounds upon which it rests. As noted in the Committee Comment to 12 O.S.Supp.1990 § 2008, “[this section] acknowledges that modern devices such as discovery, pretrial conferences, and summary judgments are more effective methods of performing the functions of-disclosing the factual and legal issues in dispute, pretrial planning, and disposing of frivolous or unfounded claims and defenses which historically were performed by the pleadings.”
An examination of the record indicates that the parties knew that Coble was, at least in part, alleging acts of negligence. Coble makes mention of his cause of action for negligence in the response to the defendants’ motions for summary judgment. Likewise, First Life and the bank directly address the issue of negligence in their trial court arguments to the effect that there can be no award of damages for emotional distress or punitive damages for the negligent acts of their agents.
Bowers was acting as a dual agent for both the bank and First Life in dealing with Coble. An agent has the duty to act in good faith and use reasonable care, skill and diligence in the procurement of insurance, DeWees v. Cedarbaum, 381 P.2d 830 (Okl.1963), and an agent is liable to the insured if, by the agent's fault, insurance is not procured as promised and the insured suffers a loss. Jefferson v. Alaska 100 Insurance Inc., 717 P.2d 360 (Alaska 1986). Once a lender agrees to procure a policy of insurance for the borrower and accepts money for that purpose the lender becomes liable for the failure to perform its basic obligation to purchase the policy as agreed. Mid-America Corp. v. Roach, 412 P.2d 188 (Okl.1966). See also Beam v. Green, 208 Okl. 10, 252 P.2d 444 (1953). In short, the bank had a duty to deal in good faith with Coble. Djowharzadeh v. City Nat’l Bank & Trust Co., 646 P.2d 616 (Okl.App.1982).
It cannot be said that Coble- is without any physical injuries which would preclude his recovery for emotional distress. Coble stated in his deposition that as the result of the anxiety caused by this incident, he has experienced “headaches and stuff.” Upon proper proof, a plaintiff may recover for mental anguish where it is caused by physical suffering and may also recover for mental anguish which inflicts physical suffering. Ellington v. Coca Cola Bottling *75Co., 717 P.2d 109 (Okl.1986). While the general rule is that recovery may not be had for mental anxiety which is not connected with some physical suffering or injury to the person enduring the mental anguish, the supreme court had recognized that mental suffering occasioned by simple hunger pangs and the deprivation of a place to sleep may constitute an actionable injury. Thompson v. Minnis, 201 Okl. 154, 202 P.2d 981 (1949). This court should be hesitant to find as a matter of law that headaches are not sufficient to constitute a physical injury.
With respect to the bad faith claim, the record is clear that there are facts which tend to prove that the bank was acting as an agent for First Life in its dealings with Coble. Coble applied for the disability insurance at the suggestion and assistance of a bank employee, Linda Woodward. Later communications with First Life about Co-ble’s policy were made through another bank employee, Melinda Bowers. Bowers took it upon herself to make decisions affecting Coble’s coverage in cooperation with First Life. Bowers directly received correspondence from First Life concerning Coble’s policy, a copy of which she claims to have forwarded to Coble. There is enough evidence to support a finding of agency between the bank employees and the insurance company. Existence of the relationship is a disputed issue of fact to be resolved by a jury, not by summary judgment. If an agency relationship is established, it follows that a material issue will arise as to whether the agent breached a duty to deal fairly and in good faith with Coble on behalf of First Life. Timmons v. Royal Globe Ins. Co., 653 P.2d 907 (Okl.1982).
Ill
A review of the record in the light most favorable to Coble, indicates that there are facts tending to prove that he did not get the benefit of his bargain. At the inception of the loan, he sought to protect himself in the event a disability prevented him from paying off his loan. When an unfortunate injury occurred, Coble discovered not only did he not have the coverage which he thought he had purchased, but that he had been paying for coverage he did not authorize. The endorsement alleged to have been mailed to Coble is vague and cannot be construed as properly advising him of the changes made in his coverage. The endorsement does not mention disability coverage and does not apprise Coble of the actions taken by Bowers. Not until Coble’s claim was filed and denied did the bank or First Life advise Coble of the changes made in his coverage. It cannot be said as a matter of law that Coble is precluded from founding his claim on the theories of fraud, negligence, and bad faith breach of duty against all the defendants. Title 14A O.S.1981 § 4-105, imposes upon a creditor certain enumerated duties to promptly supply information to a borrower with respect to this type of insurance.1 Whether there was a breach of a duty owed to Coble, and if so, whether the breach was the result of negligence, fraud or bad faith are questions .of fact to be decided by a trial on the merits.
It is my opinion that the summary judgments should be vacated and the cause remanded for trial on all three theories of recovery and other incidental factual issues. The fact that Coble has been granted a discharge in bankruptcy, although it affects the limits of recovery that Coble may ultimately realize, does not deprive him of standing to assert his claim for emotional distress.

. Title 14A O.S.1981 § 4-105 dictates that:
"If a creditor agrees with a debtor to provide insurance
(1) the insurance shall be evidenced by an individual policy or certificate of insurance delivered to the debtor, or sent to him at his address as stated by him, within thirty (30) days after the term of the insurance commences under the agreement between the creditor and debtor; or
(2) the creditor shall promptly notify the debtor of any failure or delay in providing the insurance.”