Court Opinion

ID: 163554
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:56:14+00
Date Added: 2024-06-11T09:42:14.146989
License: Public Domain

F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                    UNITED STATES COURT OF APPEALS
                                                                         JUN 11 2003
                           FOR THE TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

    CHARLES RAYMOND
    SOUTHERLAND,

               Plaintiff-Appellant
               Cross-Appellee,                     Nos. 02-7081, 02-7085
                                                     02-7093, 02-7098
    v.                                            (D.C. No. 99-CV-421-S)
                                                        (E.D. Okla.)
    GRANITE STATE INSURANCE
    COMPANY, a Pennsylvania
    Corporation; AIG CLAIM SERVICES
    INC., a Delaware Corporation; f/k/a,
    American International Adjustment
    Company Inc., NEW HAMPSHIRE
    INSURANCE COMPANY; NEW
    HAMPSHIRE INSURANCE GROUP
    HOLDING CORP; AMERICAN
    INTERNATIONAL GROUP,

               Defendants-Appellees
               Cross-Appellants.

                           ORDER AND JUDGMENT           *

Before BRISCOE , PORFILIO , and ANDERSON , Circuit Judges.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). These cases are

therefore ordered submitted without oral argument.

      The parties appeal several decisions the district court made in this diversity

action governed by Oklahoma law. This action stems from work-related injuries

Charles Southerland suffered in 1984, while he was working for Greenleaf

Nursery. The Nursery’s workers’ compensation insurer, Granite State Insurance

Company, through its claims adjuster, AIG Services, Inc. (collectively,

defendants), paid Southerland disability benefits, as well as all related medical

expenses, for over fifteen years. Although Southerland had never filed a workers’

compensation claim with the Oklahoma Workers’ Compensation Court,

defendants, during this fifteen-year period, mistakenly indicated in their files that

the court had adjudicated Southerland’s disability claim. When, in 1999,

defendants realized there had never been a court-ordered compensation award,

they stopped paying those benefits. Southerland then filed a claim for

compensation with the Workers’ Compensation Court and eventually reached a

court-approved settlement of his disability claim with defendants.

                                          -2-
      These appeals stem from Southerland’s Oklahoma tort claims, challenging

defendants’ decision to stop paying him disability payments in 1999, after

discovering there was no court-ordered compensation award, despite having made

those payments for fifteen years without any court order. Southerland alleged that

defendants, in stopping these payments, acted in bad faith and intentionally

inflicted emotional distress. We affirm the district court’s decision granting

defendants summary judgment on both these tort claims, as well as the district

court’s decision dismissing Southerland’s amended complaint asserting these same

claims against several additional defendants. In doing so, we review the district

court’s summary judgment decision     de novo . See Patton v. Denver Post Corp.     ,

326 F.3d 1148, 1151 (10th Cir. 2003). Defendants will be entitled to summary

judgment only if “there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c).

      At the time defendants stopped paying Southerland disability benefits, the

Oklahoma Workers’ Compensation Court had not yet entered any award. Although

the Oklahoma Supreme Court has “explicitly rejected the viability of a bad faith

claim against a workers compensation insurer for [such]    pre-award conduct,”

Fehring v. State Insurance Fund   , 19 P.3d 276, 284 n. 21 (Okla. 2001) (emphasis

added), the district court held that defendants, in this case, should be equitably

estopped from asserting that Southerland’s bad-faith claim was barred by the lack

                                           -3-
of a court-ordered compensation award, because defendants had already paid those

benefits for fifteen years without any court order. In appeal Nos. 02-7085 and

02-7098, defendants challenge the district court’s applying equitable estoppel

under these circumstances. Southerland counters that this court, in a prior appeal,

conclusively held that equitable estoppel does apply in this situation. We need not

address these arguments, however, because even if defendants are equitably

estopped from asserting that the lack of a court-ordered award precludes

Southerland’s bad-faith claim, the district court still appropriately awarded

defendants summary judgment on the merits of that claim. Southerland appeals

that summary-judgment determination in both appeal Nos. 02-7081 and 02-7093.

      The Oklahoma Supreme “Court has not unequivocally sanctioned the

viability of a tort suit against a workers’ compensation insurer for . . . bad faith

post-award conduct.”   Id. at 284 (addressing bad-faith claim for failing to pay

award in timely manner);   see also Kuykendall v. Gulfstream Aerospace Techs.      , 66

P.3d 374, 376-77 (Okla. 2002) (“No Oklahoma case holds that a workers’

compensation insurer has a duty of good faith in paying a workers’ compensation

award, the violation of which is a tort.”). However, for purposes of this appeal

only, we assume that Oklahoma courts would recognize such a bad-faith claim.

      If the Oklahoma Supreme Court were to recognize such a claim,

Southerland, to recover, would have to establish that defendants “engaged in

                                          -4-
intentional, wilful, and malicious conduct.”         Fehring , 19 P.3d at 284.   1

Southerland, however, failed to assert any evidence indicating defendants had

acted intentionally, maliciously, and wilfully in stopping the disability payments.

Rather, uncontroverted evidence indicates that defendants terminated

Southerland’s benefits because Oklahoma law did not require them to make those

payments without a court order. We, therefore, affirm the district court’s decision

granting defendants summary judgment on the bad-faith claim.

       The district court also granted defendants summary judgment on

Southerland’s tort claim alleging they had intentionally caused Southerland

emotional distress. Under Oklahoma law, this “tort requires evidence of extreme

and outrageous conduct coupled with severe emotional distress.”             Computer

Publ’ns, Inc. v. Welton , 49 P.3d 732, 735 (Okla. 2002). Further, defendants must

have intentionally or recklessly undertaken such extreme and outrageous conduct.

See id. Southerland, however, failed to present evidence indicating defendants

1
       Southerland argues that, in this case, he need not establish that defendants
acted intentionally, wilfully, and maliciously because, unlike in      Fehring, here
there has been no court-ordered compensation award. We need not address this
argument, however, because Southerland never raised it in the district court.        See,
e.g., Quigley v. Rosenthal , 327 F.3d 1044, 1069 (10th Cir. 2003). In any event,
the Oklahoma Supreme Court has indicated that if it did recognize a bad-faith
claim against a workers’ compensation insurer, it would do so only where the
insurer’s conduct was intentional and wilful because only such conduct would
justify permitting a common-law claim in the context of workers’ compensation,
which is otherwise exclusively governed by Oklahoma’s statutory scheme.           See
Fehring , 19 P.3d at 284-85.

                                               -5-
intentionally or recklessly acted in an extreme and outrageous manner. We,

therefore, affirm the district court’s decision granting defendants summary

judgment on this claim as well.

       In light of those conclusions, we need not address defendants’ arguments

challenging several district court discovery orders related to their defenses to these

two tort claims.      See also Cross-Appellants’ Opening Br. (Nos. 02-7085, 02-7098)

at 35, 63 (stating defendants appealed discovery orders        if this court reversed

district court’s decision granting them summary judgment).

       Finally, the district court had granted Southerland leave to amend his

complaint to add as defendants the New Hampshire Insurance Company, New

Hampshire Insurance Group Holding Corporation, and American International

Group, Inc. (collectively, additional defendants). Southerland asserted the same

tort claims against these additional defendants. After granting the original

defendants summary judgment, however, the district court dismissed Southerland’s

claims against these additional defendants.         Southerland challenges that decision in

appeal No. 02-7093. The district court, however, did not err in dismissing those

claims. In light of that determination, we also need not address these additional

defendants’ cross-appeal, No. 02-7098, challenging the district court’s decision

permitting Southerland to amend his complaint to add these additional defendants

in the first place.    See also id.

                                              -6-
The judgment of the district court is AFFIRMED.

                                          Entered for the Court

                                          Mary Beck Briscoe
                                          Circuit Judge

                                -7-