Court Opinion

ID: 9785383
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:37:52.843253+00
Date Added: 2024-06-11T07:36:21.530294
License: Public Domain

OPALA, V.C.J.,
concurring.
4 1 The court announces today-in answer to a question posed by a federal court-that Oklahoma does not recognize a bad-faith tort remedy for post-award harm inflicted by a *1086workers' compensation carrier. While I concur in the court's pronouncement, I write separately to explain the analytical framework for joining today's opinion.
THE ANATOMY OF LITIGATION
2 In 1999 the plaintiff filed four workers' compensation claims against Terra Telecom 1 alleging separate accidental on-the-job injuries. In December of that year the Workers' Compensation Court found that the plaintiff had sustained an accidental on-the-job injury.2 The essence of the plaintiff's federal-court claim is that the defendant failed to satisfy its statutorily imposed compensation obligation 3 after the Workers' Compensation Court had determined the amount of the award. More specifically, the plaintiff avers that the defendant (1) unreasonably delayed its authorization of necessary medical expenses and (2) failed to remit court-ordered travel expenses in a timely fashion.
II
THE SO-CALLED BAD-FAITH DELICT FOR BAD-FAITH REFUSAL TO SETTLE A COVERED CLAIM IS A NONGLOBAL STATUS-BASED TORT4
3 The so-called bad-faith tort is extremely narrow. Insurers who bear an obligation of good faith and fair dealing stand exposed to bad-faith tort liability only when they refused in bad faith to settle with an insured a policy-covered loss and the indemnitee suffered resulting harm.5
III
ALLOWING PLAINTIFFS TO SUE WORKERS' COMPENSATION CARRIERS IN TORT FOR POST-AWARD ACTS OF BAD FAITH WOULD DISRUPT THE DELICATE BALANCE OF CREATED EMPLOYER AND EMPLOYEE INTERESTS NOW EMBODIED IN THE TERMS OF O.S. 2001 §§ 11, 12 and 122.
1 4 The provisions of 85 O.S.2001 §§ 11, 12 and 122 were the product of a tradeoff between workers' and employers' interests: workers obtained the benefit of employer's fault-free Hability for on-the-job-injuries, and employers received protection from being answerable in tort.6 Employers' insurers, *1087who have undertaken to stand as their compensation indemnitors,7 share the totality of immunity the employers gained in this quid pro8
T5 The very reason an employer's and an insurer's status-based and contract-based immunity from tort liability are coterminous stems, in part, from the equity's principle of subrogation. Insurers, who are bound by an agreement that calls for the indemnification of the insured,9 agree to stand in the insured's shoes and assume the sum total of the latter's compensation responsibility.10 To hold that a workers' compensation insurer's immunity from tort liability is not coterminous with that of an insured employer's own immunity would indeed abrogate the latter's protection by removing the bargain's very pedestal and toppling the essence of the tradeoff.11
IV
AN EMPLOYER IS IMMUNE FROM TORT LIABILITY FOR DELAYED OR UNFULFILLED PERFORMANCE OF STATUTORILY IMPOSED (OR IMPOSABLE) COMPENSATION-RELATED DUTIES BECAUSE THEY ARISE OUT OF THE LEGAL OBLIGATION FOR WHICH THE TERMS OF 85 0.s.2001 §§ 11, 12 and 122 CONFER IMMUNITY FOR ALL LIABILITY DEHORS THE COMPENSATION LAW
T6 Liability for post-award deficiency in performance or for one's nonperformance falls within the penumbra of immunity that employers received in a tradeoff for accepting fault-free liability to claimants covered by the Workers' Compensation Act.12 As a result of the tradeoff, the obligations that the workers' compensation regime imposes on employers are absolutely inseparable from the immunity that compensation law confers. That immunity is co-extensive with liability for mis- mal- or nonperformance of statutorily prescribed obligations.
17 An employer's duty to satisfy-by required performance-an award for an accidental on-the-job injury arises out of the bundle of multiple obligations imposed by the workers' compensation law.13 The Workers'
*1088Compensation Court's determination of the obligation's quantum does not create a new duty that may stand independently of that which the provisions of §§ 11, 12 and 122 impose at the moment an on-the-job injury is sustained. Since the legal duty to fulfill statutory obligations remains exactly the same before and after a compensation award is imposed, the very same immunities protect the employer before as those which do so after adjudication stands effected. The employer (and its insurer) stands immune from tort liability for pre- as well as for post-award imposed (or imposable) compensation-law obligations. To hold otherwise would greatly undermine the guid pro quo upon which workers' compensation rests and would erode, if not indeed destroy, the value of the hard-won immunity.14
y
ALLOWING TORT LIABILITY FOR AN INSURER'S MAL- MIS- OR NONPERFORMANCE OF WORKERS COMPENSATION DUTIES WOULD CREATE A NEW REMEDY FOR A DELICT THAT LIES WELL UNDER THE EXCLUSIVITY STATUTES UMBRELLA OF IMMUNITY15
T8 The tort of bad faith for mis- mal- or nonperformance of an obligation imposed (or imposable) by workers' compensation law is barred by the exelusivity-conferred immunity.16 In its impact on the employer, "exclusivity" confers immunity from employee-sustained accidental on-the-job harm sought to be pressed by a claim dehors the Workers' Compensation Act. Exelusivity means that the common-law remedies cannot be used *1089either to strengthen or weaken, expand or abridge the sole statutory remedy available for vindication of on-the-job injury claims covered by the Act. An action in tort for an employer's mal- mis- or nonperformance of obligations imposed (or imposable) by the Act-whether based in negligence or on a tort wilful in character-lies well within the umbrella of immunity conferred by the exelu-sivity doctrine.
T9 Attempting to superimpose bad-faith tort liability for malperformed or unfulfilled statutory compensation duties would dilute, if not indeed destroy, the regime of remedies that compensation law has fashioned to protect employer immunities. Because due satisfaction of an award for an accidental on-the-job injury is in itself an obligation immunized by compensation law, the only remedies available for delayed or unperformed satisfaction are those which are enacted by the provisions of 85 0.8.2001 §§ 42 and 48.17
VI
EMPLOYER'S IMMUNITY FROM LIABILITY DOES NOT EXTEND TO INTENTIONAL TORTS INFLICTED ON THE JOB
T10 An employer's immunity from tort liability does not extend to intentional (as distinguished from accidental) on-the-job torts.18 As the plain language of 85 0.8.2001 § 11 makes clear, all accidental on-the-job injuries must be channeled through the Workers' Compensation Court,19 but claims for intentional on-the-job delicts may be vindicated outside of the workers' compensation regime.20 A non-accidental injury, if intentionally inflicted by the employer upon an employee at work or otherwise in the course of employment, is not remediable by the Workers' Compensation Act and hence is subject to vindication in common-law tort.
{11 Though the delict of bad faith is an intentional common-law tort,21 its nature is *1090irrelevant in this case because it occurred neither at work nor in the course of employment. Rather, the injury sought to be remedied is connected solely with the alleged tortfeasor's compensation liability. Since the plaintiff's claim for malperformed or unperformed obligations stands inextricably linked to employer's liability for claimant's on-the-job injury, the terms of 85 0.8. 2001 §§ 11, 12 and 122 bar a tort or any other claim dehors the workers' compensation regime of remedies.
VII
SUMMARY
1 12 Oklahoma does not recognize a global bad-faith tort for every breach of good faith and fair dealing which stands imposed by contract or law. The so-called bad-faith tort action is confined to tortfeasor-insurers and inures solely to insured persons (and a policy's third-party beneficiaries). It lies only for bad-faith refusal to settle a covered claim.22 In contrast, the duty to satisfy an award is an obligation imposed by workers' compensation law-a public-law responsibility. By the Workers' Compensation Act's provisions employers received immunity from tort liability for all legal accountability arising out of compensation law's obligations; this is part and parcel of the workers' compensation early tradeoff. An employer's (and therefore its insurer's) immunity from tort liability must hence be measured as fully co-extensive with the compensation law's statutorily imposed (or imposable) obligations.
BOUDREAU, J., concurring:
T1 I write separately to explain my vote today in light of my dissenting vote in Kuykendall v. Gulfstream Aerospace Technologies, 2002 OK 96, 66 P.3d 374. Kuykendall addressed whether Oklahoma recognizes the tort of bad faith for post-award conduct against a self-insured employer. We answered no. I dissented. In the instant case, we address whether to extend Kuykendall to employers' workers' compensation insurance carriers. Since Kuykendall, I have reconsidered and have come to the conclusion that Kuykendall is correct and that we should extend it to cover not only self-insured employers but also employers' workers' compensation carriers.
T2 The Oklahoma Legislature designed our workers' compensation system as a fast, efficient way to compensate employees for accidental on the job injuries. The workers' compensation system is a comprehensive statutory scheme to fix compensation for, and provide medical care to, covered employees. Caffey v. Soloray, 2002 OK 82, 57 P.3d 870, 874. It is a guid pro quo between the employer/carrier and the employee. The employee gives up the right to sue in tort, gaining a certain remedy irrespective of fault. Id. In exchange, the employer avoids the high cost of litigation and possible excessive judgments. Upton v. State ex. rel. Dept. of Corrections, 2000 OK 46, 9 P.3d 84, 87.
1 3 To implement this bargain, the Legislature established the workers' compensation system as the exclusive remedy for employees who suffer accidental on the job injuries. Under the exclusive remedy doctrine, compensation benefits replace employers/carriers' tort liability for work-related accidental injuries.
T4 In the past few years, this court has addressed the emerging attempt to penetrate the exclusive remedy doctrine with bad faith tort claims. In Anderson v. USF & G, 1997 OK 124, 948 P.2d 1216, we held that Oklahoma does not recognize the tort of bad faith against a carrier for pre-award conduct. In Kuykendall, we held that Oklahoma does not recognize the tort of bad faith against a self-insured employer for post-award conduct *1091(delay or termination of payments or treatment). Today we face the same issue but against a carrier, not of a self-insured employer.
5 We resolve that issue today consistent with Kuykendall We hold that once an employee's original accidental injury is determined to be within the scope of the Oklahoma Workers' Compensation Act, disputes that flow from the award of compensation for that injury likewise fall within the scope of the Act. This principle was clearly contemplated by the Legislature when it enacted the penalty provision for failure to timely pay awarded benefits, 85 0.8.2001 § 42 (18% interest).1
I 6 While the Legislature has provided this remedy for post-award delay or termination of payments or treatment by an employer, it is worth noting that the remedy is far from perfect. Because a claimant seeking to enforce a workers' compensation award under § 42 will probably need to engage the services of an attorney, it seems reasonable to me to add an attorney fee provision to § 42. While it is not and has never been the purpose of workers' compensation acts to make a covered employee whole,2 allowing 18% interest without an attorney fee provision leaves the remedy ineffective for many claimants. However, such changes are solely within the realm of the Legislature, not the courts.

. AIU insures Terra Telecom, and AIG serves as AIU's third-party administrator.

. Two conditions must be met for an employee to recover workers' compensation for an accidental injury. The injury must be sustained in the course of and arise out of the employment. See Kuykendall v. Gulfstream Aerospace Technologies, 2002 OK 96 ¶ 6, 66 P.3d 374, 376.
Of the four compensation claims the plaintiff filed, one has been dismissed, two are pending, and the fourth prompted the question to be answered here.

. The provisions of 85 O.S.2001 §§ 11, 12, and 122 require that employers compensate employees for accidental on-the-job injuries.

. The so-called bad-faith tort does not avail to persons outside the insurer/insured relationship. See Rodgers v. Tecumseh Bank, 1988 OK 36 ¶ 16-18, 756 P.2d 1223, 1226-27.

. See Christian v. American Home Assur. Co., 1977 OK 141 ¶ 24, 577 P.2d 899, 904.
The tort of bad faith arises only when the plaintiff and his insurer are in privity of contract and the latter has breached the implied-inlaw promise of good faith and fair dealing. See Id. Though the plaintiff in this case is not stricto sensu in contractual privity with the defendant, he occupies vis-a-vis his employer's workers' compensation carrier the status of a third-party beneficiary. By Oklahoma's statutory law he is accorded the benefit of contractual privity. See Id. It is clear that if the plaintiff's claim were actionable dehors the workers' compensation law, he would have standing to sue. See Id.; see 85 O.S.2001 § 65.3; see State Ins. Fund v. Brooks, 1988 OK 50 ¶ 6, note 9, 755 P.2d 653, 657.

. The provisions of 85 O.S.2001 §§ 11, 12 and 122 are patterned after an act passed in England at the turn of the 20th century. The act's text was similar, if not identical to, a law enacted in Prussia during the 1880's, the last decade of Otto von Bismarck's chancellory. See Arthur Larsen, Larsen's Workers' Compensation Law § 80.05[3], (Matthew Bender, 2003). Bismarck recognized a need to provide financial protection for workers who during the period of Prussia's industrialization left their farms to settle in cities and work in factories with a high incidence of injury. He realized that tort claims could expose fledgling industries to virtually limitless and potentially destructive liability. The original workers' compensation legislation reflected a desire to provide *1087expedient compensation for workers whose dependence on hourly wages meant that they did not have time to litigate claims. The provisions of the act also relieved workers of the difficult burden of proving that their injury was the result of the employer's fault. Moreover, the act trimmed the overbroad sweep of employer's fault-free accountability by conferring upon them general immunity from ex delicto liability. See Id. at SC-2.

. See 85 0.$.2001 § 61.

. See U.S. Fidelity & Guaranty Co. v. Theus, 1972 OK 9 ¶ 12, 493 P.2d 433, 435; see, e.g., Fehring v. State Ins. Fund, Okla.2001 ¶ 28, 19 P.3d 276, 285; Brooks, 1988 OK at ¶ 9, 755 at 658,.

. See Id.

. See Id.

. Exposing workers' compensation carriers to delictual liability for bad faith would force insurers to hire lawyers to defend against a new class of litigation. Carriers would also have to assume the risk of losing cases and satisfying potentially large verdicts. This uncontemplated liability would be passed on to employers in the form of increased insurance premiums. The added costs to employers would in turn disrupt the equilibrium of costs and benefits that the Workers Compensation Act promised to maintain.

. Twenty-four states have statutes clearly identi- . fying workers' compensation carriers as sharing the entirety of their insured employer's immunity. See Larsen supra note 6, at § 114.02, (Matthew Bender, 2003). These statutes explicitly bar employees from bringing bad-faith tort claims against insurers. See Id. Of the remaining twenty-six states, no clear majority holds that an insurer's immunity extends to bad-faith failure to compensate an insured's loss. See Id. Oklahoma's jurisprudence teaches that workers' compensation carriers share the same immunity as their insured employers. See U.S. Fidelity, 1972 OK at ¶ 12, 493 at 435.

. See 85 O.S.2001 § 11.

. See supra note 6.

. This immunity does not apply to uninsured employers who have failed to secure a permit as self-insurers. See 85 0.$8.2001 § 12; Pryse Monument Co. v. District Court of Kay County, 1979 OK 71 ¶ 2, 595 P.2d 435, 436; see, eg., Ice v. Gardner, 1938 OK 502 ¶ 2, 83 P.2d 378, 382; Eagle Creek Oil Co. v. Gregston, 1924 OK. 539 ¶ 2, 226 P. 339, 340. Where an uninsured employer did not obtain a self-risk employment permit, an accidentally injured employee could either sue in. tort or pursue a workers' compensation remedy; these two vindication methods are separate and mutually exclusive. See Pryse, 1979 OK at ¶ 2, 595 at 437.

. A majority of states hold that the immunity from ex delicto liability employers received in the quid pro quo extends to bad-faith actions arising out of statutorily imposed obligations to compensate. See supra note 12. While reaching the same results, courts have developed similar yet distinct jurisprudential rationales. At least thirteen states and the District of Columbia bar bad-faith tort claims against employers and workers' compensation carriers for mis- mal- or nonperformance of statutorily imposed (or imposable) obligations on the grounds that compensation law provides the sole remedy for claims arising out of accidental on-the-job injuries. See, eg., Atkinson v. Gates, McDonald & Co., 838 F.2d 808, (C.A.5 Miss., 1988); Bradford v. Noble Drilling Co., 503 F.Supp. 624, (E.D.La., 1980); Connolly v. Maryland Casualty Co., 849 F.2d 525, (C.A.11 Fla., 1988); Hall v. C & P Tel. Co., 809 F.2d 924, (D.C.Cir.1987); Brown v. Transportation Ins. Co., 448 So.2d 348, (Ala., 1984); Low-man v. Piedmont Exec. Shirt Mfg. Co., 547 So.2d 90, (Ala., 1989); Stafford v. Westchester Fire Ins. Co., 526 P.2d 37, (Alaska, 1974); Cooper v. Argonaut Ins. Cos., 556 P.2d 525, (Alaska, 1976); Ricard v. Pacific Idemnity Co., 132 Cal.App.3d 886, 183 Cal.Rptr. 502, (1st Dist., 1982); Garrett v. Washington Air Compressor Co., 466 A.2d 462, (Dist.Col. App., 1983); Valladares v. Avis Rent-A-Car Systems, Inc., 449 So.2d 902, (Fla.App.D3., 1984); Hymel v. Cigna Property & Casualty Cos., 563 So.2d 488, (La.App., 1990); Broaddus v. Ferndale Fastener Div., 84 Mich.App. 593, 269 N.W.2d 689, (1978); State ex rel. American Motorists Ins. Co. v. Ryan, 755 S.W.2d 399, (Mo. App., 1988); Hayes v. Aetna Fire Underwriters, 187 Mont. 148, 609 P.2d 257, (1980); Escobedo v. American Employers Ins. Co., 547 F.2d 544, (C.A.10 N.M.1977)(applying New Mexico law); Penn v. Standard Acci. Ins. Co., 4 A.D.2d 796, 164 N.Y.S.2d 618, (3d Dept., 1957); Kuney v. PMA Ins. Co., 525 Pa. 171, 578 A.2d 1285, (Pa, 1990); Fry v. Atlantic States Ins. Co., 700 A.2d 974 (Pa.Super.Ct., 1997); Whitten v. American Mut. Liability Ins. Co., 594 F.2d 860, (DC SC, 1977)(applying South Carolina law); William v. Newport News, 240 Va. 425, 397 S.E.2d 813, (1990); see also supra note 12 (discussing the penumbra of employer immunity as it extends to insurers). Other states emphasize judicial deference to legislative intent. These courts hold that legislatures manifested their intent by crafting remedies for late payments. See also supra note 12.; see 8 A.L.R.4th 902 § 5[al]. As this concurrence indicates, I find the former rationale-that based on the outer reach of immunity-much more persuasive.

. The provisions of 85 0.S.2001 § 42 state that late payments "shall bear an interest of 18% per year." The statute also enables judges in the Workers' Compensation Court to suspend or revoke the license of a carrier who fails to comply with an award for compensation.

. See Pursell v. Pizza Inn Inc., 1990 OK CIV APP 4 ¶ 3, 786 P.2d 716, 717; Roberts v. Barclay, 1962 OK 38 ¶ 4, 369 P.2d 808, 809.
Any job poses risks of certain types of foreseeable injury. These injuries and the risks that stem from them are considered to be employment-related; they are contemplated by the employer and the employee and are reflected in the wage paid to the latter as well as the amount of the former's workers' compensation insurance premiums. Regardless of fault, the provisions of 85 O.S. §§ 11, 12 and 122 regard these injuries as accidental and covered by compensation law. Because the workers' compensation quid pro quo eliminated fault findings for on-the-job injuries, the fact that the harm was the product of an employer's reckless indifference is irrelevant as long as the resulting harm was from an employment-related risk. Harrington v. Certified Systems Inc., 2000 Okla.Civ.App. Div. 4 ¶ 34, 45 P.3d 430, 436.
In order to give rise to a tort claim that is dehors compensation law, an intentional on-the-job tort must be the product of the employer's knowing and wilful intent to cause injury. Id. at 132-34, 435-36. The injury must also be one that is not within the normal employee/employer relationship, and not a risk directly related to the employee's service. Id. at 134, at 436. In other words, intentional on-the-job torts are those which are not employment-related. Sexual harassment, intentional infliction of emotional distress, and assault and battery, for example, are types of injury that would not occur at the workplace without the willful, deliberate, affirmative delict of an employer whose behavior created personal-rather than employment-related risks. Cf Id. at 1 28-33, at 436.

. The relevant portion of the statute states: ''Every employer subject to the provisions of the Workers Compensation Act shall pay, or provide as required by the Workers' Compensation Act ... for the disability of death of his employee arising out of and in the course of his employment ..." 85 0.$.2001 § 11. If the cause of action were to arise out of an intentional on-the-job tort, the employee would be able to litigate the claim outside of the workers' compensation system. See Id.

. See supra note 18.

. See Manis v. Hartford Fire Ins. Co., 1984 OK 25 ¶ 6, 681 P.2d 760, 761; McCorkle v. Great Atlantic Ins. Co., 1981 OK 128 ¶ 9, 637 P.2d 583, 585; see, eg., Christian, 1977 OK at ¶ 24, 577 at 904.
Compensation law imposes duties that the provisions of 85 0.S.2001 §§ 11, 12 and 122 incorporate into the normal employee/employer relationship. Hence, a breach of those statutory obligations does not occur outside of the scope of the employer/employee relationship and hence fails to satisfy an essential element of intentional torts. See supra note 3; supra note 18.
Moreover, in order to have an actionable intentional tort that lies outside of the compensation law, the employee must demonstrate an act or *1090omission unrelated to the performance of a statutorily imposed obligation. The so-called bad-faith tort is a product of the duty of good faith and fair dealing implied in law in all contracts between insurers and their insured (or third-party beneficiaries deemed in privity). See supra note 5. Since the workers' compensation carrier indemnifies the employer, duty of good faith and fair dealing is part and parcel of the latter's duty to compensate. This obligation has been immunized by workers' compensation law. In short, claims of bad faith arising out of imposed (or imposable) compensation-law duties are not actionable outside of the Workers' Compensation Act.

. See Rodgers, 1988 OK at 1116-18, 756 at 1226-27.

. It is virtually impossible to delineate specific trends in how other states have dealt with the issue we address today, because the states have taken such varied positions. However, several states have held that where their workers' compensation act provides penalties for intentional delay in payment of compensation awarded, such statutory penalties preclude the employee's use of common law remedies. See, eg., Hormann v. New Hampshire Ins. Co., 236 Kan. 190, 689 P.2d 837 (1984).

. See Intentional Harassment by Delay or Termination of Payment or Treatment, 6 Larson's § 104.053] at 104-34:
A majority of courts have taken the view that [the presence of a statutory penalty for the very conduct on which the tort suit is based] evidences a legislative intent that the remedy for delay in payments, even vexatious delay, shall remain with in the [workers compensation] sysiem in the form of some kind of penalty. Several courts, however, have rejected this reasoning, without very convincing rationales. A federal district court, for example, in Carpentino v. Transport Ins. Co., 609 F.Supp. 556 (D.Conn.1985), argued that penalties might not fully compensate the plaintiff. Since when, we may ask, has it been necessary for compensation acts to compensate claimants fully? Other courts have correctly pointed out that, although the penalties may in some instances be inadequate, this does not, within the overall nature of the compensation concept, make them invalid. At most, it may be cause to apply to the legislature for a more suitable penalty level.
(emphasis added).