Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFirst Come, First Served: Subrogating Multiple Claims in Excess of Policy LimitsFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerKeep Right Traffic LawsLaws Regarding Using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationNo Pay, No Play LawsOwner Liability For Stolen VehiclesPayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Governmental Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-Op Waiver of Subrogation LawsDamage to Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ Compensation Subrogation Waiver EndorsementsWorkers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Percentage of Value: 60%
Cost to repair damage to vehicle exceeds 60% of fair market value. 47 Okla. Stat. Ann. § 1111(C)(1).
Automobile: Pro-Rata. Okla. Admin. Code § 365:15-3-8 provides: “Including deductible in subrogation demands. Insurers shall, upon claimant’s request, include first-party claimant’s deductible, if any, in subrogation demands. Subrogation recoveries shall be shared on proportionate basis with the first-party claimant, unless the deductible amount has been otherwise recovered. No deduction for expenses can be made from deductible recovery unless outside attorney is retained to collect such recovery. The deduction may then be for only pro-rata share of allocated loss adjustment expense.”
Deductible must be included in any collision subrogation demand upon claimant’s request.
Diminution of Value
First Party: Oklahoma has held that “unless the collision resulted in a total loss of the automobile plaintiff’s measure of recovery was the difference between the fair market value of his automobile in the condition in which it was immediately prior to the collision, and its value thereafter. If the collision resulted in a total loss of the auto his measure of recovery was the fair market value thereof in the condition in which it was immediately before the collision.” Phoenix Ins. Co., Hartford, Conn. v. Diffie, 270 P.2d 634 (Okla. 1954).
Third Party: Oklahoma statute provides, “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.” Okla. Stat. Ann. tit. 23, § 61. In cases where it is shown that repairs failed to bring damaged item of personal property up to the condition it was in prior to the damage, the cost of repairs made plus post-repair diminution in value of the property will ordinarily be the proper measure of damages. Brennen v. Aston, 84 P.3d 99 (Okla. 2003).
First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits
Oklahoma is a first come, first serve, state. Where automobile liability coverage is insufficient to satisfy all judgments rendered against the insured, if a judgment creditor, last in point of time in entry of judgment against insured first obtains judgment against the insurer, he may collect such judgment without regard to rights of common creditors who have not instituted suits against the insurer. Burchfield v. Bevans, 242 F.2d 239 (10th Cir. 1957).
Funeral Procession Traffic Laws
Oklahoma has very little law governing the operation of funeral processions. Section 11-315 provides that no driver of a motor vehicle can drive between the vehicles comprising a funeral or other authorized procession while the vehicles are in motion and when such vehicles are conspicuously designated. This provision does not apply at intersections where traffic is controlled by traffic control signals or police officers. Okla. Stat. Ann. Tit. 47, § 11-315.
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Contributory negligence of driver is not imputed to owner in owner’s action against third-party tortfeasor, unless there is a joint enterprise or joint venture. Reeves v. Harmon, 475 P.2d 400 (Okla. 1970).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
No Family Purpose Doctrine. Traber v. House, 240 P. 729 (Okla. 1925).
Sponsor Liability for Minor’s Driving: Okla. Stat. Ann. Tit. 47, § 6-107: Any negligence by a minor while driving a motor vehicle will be imputed to the parent/adult who signed their drivers’ license application.
Keep Right Traffic Laws
Statute: 47 Okla. Stat. Ann. § 11-301(a), (b) and 47 Okla. Stat. Ann. § 11-309.
Summary: Drivers must drive in the right lane, except when passing another vehicle; when an obstruction exists in the right lane; upon a roadway with three marked traffic lanes; upon a roadway restricted to one-way traffic; or upon a roadway having four or more lanes for moving traffic and providing for two-way movement of traffic. Slower traffic must keep right.
On a roadway with four or more lanes, vehicle shall not be driven in the left lane except when overtaking and passing another vehicle; provided, however, this paragraph shall not prohibit driving in the left lane when traffic conditions, flow or road configuration, such as the potential of merging traffic, require the use of the left lane to maintain safe traffic conditions. Vehicle may not be driven in the left lane, except when overtaking and passing another vehicle, other than in situations where traffic conditions or road configurations require the use of the left-hand lane in order to maintain safe traffic conditions.
Flow of Traffic: Vehicles proceeding slower than the speed limit must drive in the right. Except when overtaking and passing on the right is permitted, the operator of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal.
Laws Regarding Using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: No driver may operate a motor vehicle on any street or highway while using a hand-held electronic communication device to compose, read, or send text messages. Exceptions apply if there is an emergency situation and the driver is contacting emergency services or law enforcement. 47 Okla. Stat. Ann. § 11-901(d).
Drivers with a learner permit or Class “D” license may not use a cell phone while driving in any capacity. 47 Okla. Stat. Ann. § 6-105.
Other Prohibitions: Earphones and headphones may not be used when operating a motorized powered vehicle. Exceptions are limited to devices that minimize injurious sound. Oklahoma City, Okla. Code of Ordinances §. 32-579.
No applicable state-wide laws.
Comments: Any local laws regarding cell phone use are preempted by state law. 47 Okla. Stat. Ann. § 15-102.1.
Loss Of Use
Loss of Use: Yes. Damages for loss of use are allowed (1) during a time period reasonably required for replacement and repair, including a reasonable time to determine if the vehicle is repairable, and (2) in a reasonable amount equal to that which was actually expended. DTS Tank Serv., Inc. v. Vanderveen, 683 P.2d 1345 (Okla. 1984); Chambers v. Cunningham, 5 P.2d 378 (Okla. 1931). Loss of use damages are equal to the rental or useable value of the vehicle during the time the owner is without the vehicle. Brennen v. Aston, 84 P.3d 99 (Okla. 2003). A person whose vehicle is totaled can receive compensation for loss of use from the time the vehicle is destroyed until the time it is replaced. DTS Tank Serv., Inc. v. Vanderveen, supra.
Lost Profits: Yes. Loss profits can be recovered if you can show by a preponderance of the evidence that such damages were suffered. Boatsman v. Southwestern Bell Yellow Pages, Inc., 30 P.3d 1174 (Okla. 2001). Uncertainty as to the amount of profit loss does not prevent the recovery of lost profits. Ferrell Const. Co. v. Russell Creek Coal Co., 645 P.2d 1005 (Okla. 1982).
Comments: For loss of use during the time an owner seeks a replacement vehicle, owner must show that he could not have rented a similar vehicle while the replacement vehicle is being delivered. DTS Tank Serv., Inc. v. Vanderveen, supra.
Med Pay/PIP Subrogation
Med Pay: Subrogation clause in policy violates common-law rule on non-assignability of cause of action in tort, and is void as between insurer and tortfeasor. Okla. Stat. Ann. Tit. 36, § 6092. Exception exists for benefits paid to anyone other than named insured or insured’s family members (“relative”).
PIP: Coverage not applicable.
Made Whole: Can be overridden by policy terms. Williams & Miller Gin Co. v. Baker Cotton Oil Co., 235 P.2d 185 (Okla. 1925).
Statute of Limitations: The two (2) year personal injury statute of limitations runs from the date of the insured’s accident. Okla. Stat. Ann. Tit. 12 § 95 (2001).
No Pay, No Play Laws
Rule: In December 2014, Oklahoma’s “No Pay, No Play” statute was found unconstitutional by the Supreme Court of Oklahoma as violating Oklahoma’s state constitution. The statute stated that uninsured drivers injured in accidents could not recover non-economic damages from insured tortfeasors unless they could show the tortfeasor was under the influence and convicted of that offense at the time of the accident.
Authority: In Montgomery v. Potter, 341 P.3d 660, 2014 OK 118, the Supreme Court of Oklahoma ruled Oklahoma statute 47 O.S. § 7-116 violated the Oklahoma State Constitution because the statute targeted a specific group people, uninsured motorists, and prevented them from recovering certain non-economic damages without considering who was at fault. The Court reasoned that the statute holds uninsured drivers to a different and stricter standard than other plaintiffs injured in automobile negligence cases by creating an impermissible special class and restricting damages in civil negligence actions.
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: 47 Okla. Stat. Ann. § 11-1101.
Common Law Rule: A vehicle owner will not be liable for the negligent operation of his vehicle by a thief, unless a special set of circumstances exists that creates a special duty to prevent the acts of a third person. Joyce v. M&M Gas Co., 672 P.2d 1172 (Okla. 1983); Merchants Delivery Service, Inc. v. Joe Esco Tire Co., 533 P.2d 601 (Okla. 1975); Felty v. City of Lawton, 578 P.2d 757 (Okla. 1977).
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: If the policy provides for the settlement of first-party auto total loss, insurer may (1) offer a replacement of like kind and quality including all applicable taxes, license fees, or other fees, or (2) offer a cash settlement based on the ACV of a comparable vehicle including all applicable taxes, license fees, or other fees. Okla. Stat. Ann. tit. 36, § 1250.8.
Third-Party Claims: No applicable statute, case law, or regulation governing recovery of sales tax.
Pedestrian and Crosswalk Laws
47 Okla. Stat. Ann. § 11-502: When traffic signal is not in place, vehicles must yield to pedestrian in crosswalk on vehicle’s half of road or close to it. Pedestrians must not step off curb and into path of vehicle when vehicle does not have time to stop.
47 Okla. Stat. Ann. § 11-503: Pedestrians must yield to vehicles when crossing outside crosswalk. Pedestrians must use crosswalk at intersections with traffic control devices.
Summary: Even where vehicle has right-of-way, driver still must exercise ordinary care to avoid striking a pedestrian. Roberts v. Cain, 365 P.2d 1014 (Okla. 1961).
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers not regulated.
Recovery From Third-Party: Rental car company can likely recover loss of use damages but may have to show that it didn’t have replacement vehicle. Owner of specially-equipped commercial truck can recover damages for loss of use, but in order to do so was required to show that he could not have rented a similar truck while the replacement truck was being delivered and to show that the 79–day waiting period for delivery of the replacement truck was reasonable. If a plaintiff could have rented a substitute vehicle, the rental cost is the measure of his damage even though no other vehicle was rented. Ordinarily the measure of damages for loss of use of a business vehicle is not the profits which the owner would have earned from its use during the time he was deprived of it; it is the cost of renting a similar vehicle during a reasonable period for repairs. To recover lost profits plaintiff must show (1) that he made a reasonable effort to obtain a substitute vehicle for the time required to repair or replace the damaged one, and (2) that he was unable to obtain one in the area reasonably related to his business. In the absence of such a showing, he may not recover lost profits. DTS Tank Service, Inc. v. Vanderveen, 683 P.2d 1345 (Okla. 1984).
Rental Car Company’s Liability Insurance Primary or Excess
Summary: A car rental company which purchases liability coverage is not liable for the renter’s negligence. Okla. Stat. tit. 47 § 8-101. If the car rental company is self-insured, however, it is jointly and severally liable with the renter for damage to third parties. Okla. Stat. tit. 47 § 8-101. When a vehicle is loaned by a dealer, the customer’s policy is primary. 47 Okla. Stat. § 580.2. The vehicle owner may enter into a rental/lease agreement by which the renter assumes responsibility for loss for any liability.
Sudden Medical Emergencies While Driving
Unavoidable Accident Defense. When the operator of a motor vehicle, who, while driving, becomes suddenly stricken by a fainting spell or loses consciousness from an unforeseen cause, and is unable to control the vehicle, is not chargeable with negligence or gross negligence. Bowers v. Wimberly, 933 P.2d 312 (Okla. 1997).
Sudden unconsciousness was foreseeable when defendant had two prior fainting incidents. Parker v. Washington, 421 P.2d 861 (Okla. 1966).
Suspension of Drivers’ Licenses
Administrative Suspension: Any person who is convicted of driving without proof of financial responsibility will have their license suspended until they provide proof of security to the Department of Public Safety. 47 Okla. Stat. Ann. § 7-605. Suspension stays in effect until the fine is paid and proof of financial responsibility is shown. 47 Okla. Stat. Ann. § 6-212.
Judgment: Upon receipt of unsatisfied judgment, the Department will immediately suspend the driver’s license of the judgment debtor. 47 Okla. Stat. Ann. § 7-310. Suspension will last until the judgment is stayed or satisfied, and until the judgment debtor provides proof of financial responsibility. 47 Okla. Stat. Ann. § 7-314.
Contact Information: State of Oklahoma, Department of Public Safety, Driver Compliance Division, P.O. Box 11415, Oklahoma City, OK 73136-0415, (405) 425-2098, https://www.ok.gov/dps/.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: 15 Okla. Stat. Ann. §§ 952 to 956.
Summary: All non-OEM parts must have the logo or name of the manufacturer on the part and should be left visible if possible. Insurers cannot specify to a repair shop that they must use non-OEM parts and the repair shop may not use non-OEM parts until written notice is given to the insured. Any written estimate must clearly identify any non-OEM parts used and include a disclosure that informs the insured that the part’s manufacturer warrants the non-OEM parts, not the auto manufacturer.
Federal , State, and Local Governmental Entities
Municipal/County/Local Governmental Immunity and Tort Liability
Oklahoma Governmental Tort Claims Act: 51 Okla. Stat. § 151 – 200 (1978). 51 Okla. Stat. § 152.1(A) political subdivisions are immune whether performing governmental or proprietary function. 51 Okla. Stat. § 152.1(B) waives immunity as provided in the Act. Same statutory provisions apply to political subdivisions as to state.
Notice Deadlines: Notice of claim within one year after loss. 51 Okla. Stat. § 156(B). Notice filed CMRRR with Risk Management Administrator of the Office of Public Affairs. 51 Okla. Stat. § 156(C). Suit may be filed once claim denied (deemed denied if not approved within 90 days). Plaintiff has 180 days after 90-day period to file. 51 Okla. Stat. § 157.
Claims/Actions Allowed: State employee acting in scope of employment is liable for loss unless falls under exceptions (General Waiver of Immunity). 51 Okla. Stat. § 152.1(A). Liable for operation of motor vehicles. However, liability limited to amount of liability insurance purchased. 51 Okla. Stat. §§ 157.1-158.2.
Comments/Exceptions: Thirty-seven (37) exceptions where State not liable for torts of State employees acting in scope of employment: (1) legislative functions; (2) discretionary acts such as policy decisions (limited). “Planning-operational” approach to understanding the scope of this exception to liability; (3) natural snow or ice conditions; (4) absence, condition, location or malfunction of traffic sign unless not corrected within reasonable time after notice; (5) subrogation claim; and (6) any loss to person covered by workers’ compensation. See 51 Okla. Stat. § 155 for more exceptions.
Damage Caps: Property Claims: $25,000. Other Losses: $175,000 per person. ($200,000 for medical negligence). $1 million per occurrence. 51 Okla. Stat. § 154(A). No punitive damages. Several liability only. 51 Okla. Stat. § 154. If insurance, policy terms govern rights and obligations of State. 51 Okla. Stat. § 158. No subrogation claims allowed against political subdivision. 51 Okla. Stat. § 155(28).
State Sovereign Immunity And Tort Liability
Tort Claims Act: Oklahoma Governmental Tort Claims Act. 51 Okla. Stat. § 151 – 200 (1978).
51 Okla. Stat. § 152.1(A) adopts sovereign immunity.
51 Okla. Stat. § 152.1(B) waives immunity as provided in the Act.
Notice Deadlines: Notice of claim within one year after loss. 51 Okla. Stat. § 156(B). Notice filed CMRRR with Risk Management Administrator of the Office of Public Affairs. 51 Okla. Stat. § 156(C). Suit may be filed once claim denied (deemed denied if not approved within 90 days). Plaintiff has 180 days after 90 day period to file. 51 Okla. Stat. § 157.
Claims/Actions Allowed: State employee acting in scope of employment is liable for loss unless falls under exceptions (General Waiver of Immunity). 51 Okla. Stat. § 152.1(A). No subrogation claims allowed against State. 51 Okla. Stat. § 155(28). Liable for operation of motor vehicles. However, liability limited to amount of liability insurance purchased. 51 Okla. Stat. §§ 157.1-158.2.
Comments/Exceptions: Thirty-seven exceptions where State not liable for torts of State employees acting in scope of employment:
(1) legislative functions;
(2) discretionary acts such as policy decisions (limited). “Planning-operational” approach to understanding the scope of this exception to liability;
(3) natural snow or ice conditions;
(4) absence, condition, location or malfunction of traffic sign unless not corrected within reasonable time after notice;
(5) subrogation claim; and
(6) any loss to person covered by workers’ compensation.
See 51 Okla. Stat. § 155 or more exceptions.
Damage Caps: Property Claims: $25,000. Other losses: $175,000 per person. ($200,000 for medical negligence). $1 million per occurrence. 51 Okla. Stat. § 154(A). No punitive damages. Several liability only. 51 Okla. Stat. § 154. If policy of insurance covers State, terms and limits of policy govern rights and obligations of State. 51 Okla. Stat. § 158.
General Tort Laws/Statutes
Not applicable to requirement that entities purchase project-specific insurance policy.
Modified Joint and Several Liability. Several Liability – each tortfeasor is liable only for the amount of damages allocated to that individual. 23 Okla. Stat. Ann. § 15.
Contribution allowed in underlying or separate action where tortfeasor pays more than his share of common liability. Liability insurer specifically subrogated to rights of contribution tortfeasor. Contribution plaintiff only entitled to contribution if liability of contribution defendant was extinguished by a reasonable settlement. 12 Okla. Stat. § 832; Barringer v. Baptist Healthcare, 22 P.3d 695 (Okla. 2001). Two (2) year statute of limitations after final judgment or settlement. Fruehauf Trailer Co. v. Gilmore, 167 F.2d 324 (10th Cir. 1948).
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault. Plaintiff cannot recover if it is 51% or more at fault. If plaintiff is 10% at fault, plaintiff gets 90% recovery. Okla. Stat. Ann. Tit. 23 § 13.
Dog Bite Laws
Dog owner will be held responsible for all damages, absent trespass or provocation. Okla. Stat. Ann. § 4-42.1.
Economic Loss Doctrine
Majority Rule. Oklahoma recognizes the ELD, which provides that a product liability claim is not available for injury but only to the product itself resulting in purely economic loss. Waggoner v. Town and Country Mobile Homes, Inc., 808 P.2d 649 (Okla. 1990). The Oklahoma Supreme Court has amended the ELD in two important ways. The ELD does not apply in any case where the plaintiff is alleging a personal injury from using an allegedly defective and unreasonably dangerous product. Dutsch v. Sea Ray Boats, Inc., 845 P.2d 187, 193-94 (Okla. 1992) (plaintiff could collect damages for personal injury and damage to the product in a products liability action without bringing a separate breach of warranty claim to recover damages for economic loss). The ELD does not preclude recovery for damage to a defective product in cases where the plaintiff was personally injured or suffered damage to “other property”. United Golf, L.L.C. v. Westlake Chemical Corp., 2006 WL 2807342 (N.D. Okla. 2006). Oklahoma has gone about as far as any state in destroying tort remedies for defective products and relying on warranty remedies. The illogical holding in United Golf closes the door opened by Dutsch, holding that “consequential damages” to be governed by the ELD include:
(a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and (b) injury to person or property proximately resulting from any breach of warranty. Okla. Stat. tit. 12A, § 2-715.
The Oklahoma Supreme Court has focused on the foreseeability of damages to determine if the alleged harm qualifies as consequential damages under the U.C.C. United Golf, supra.
Willful Misconduct. Limited to criminal or delinquent acts of child. Westlake Presbyterian Church v. Cornforth, 940 P.2d 1208 (Okla. 1996); Also applies to non-custodial parent. In re J.L.M., 109 P.3d 336 (Okla. 2005). Okla. Stat. Ann. Tit., 23 § 10.
Minor’s Driving. Any negligence by a minor while driving a motor vehicle will be imputed to the parent/adult who signed their drivers’ license application. Okla. Stat. Ann. Tit. 47 § 6-107.
The limit of liability is $2,500.00. Child must be under 18-years-old.
Tort of Spoliation: In Patel v. OMH Medical Center, Inc., 987 P.2d 1185 (Okla. 1999), the Oklahoma Supreme Court stated “[n]either spoliation of evidence nor prima facie tort (for acts constituting spoliation of evidence) has ever been recognized by this court as actionable.” When there is destruction or spoliation of evidence, the Oklahoma Supreme Court has said “it is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other to have contradicted.” Harrill v. Penn, 273 P. 235 (Okla. 1927). Oklahoma’s spoliation doctrine only applies when the evidence is in the custody of one of the parties and it can be shown that a person has attempted to destroy, suppress, alter, or fabricate the evidence. Id.
Adverse Inference: “Spoliation occurs when evidence relevant to prospective civil litigation is destroyed, adversely affecting the ability of a litigant to prove his or her claim.” Patel v. OMH Medical Center, Inc., 987 P.2d at 1202. If applicable, destruction of evidence without a satisfactory explanation gives rise to an inference unfavorable to the spoliator. Manpower, Inc. v. Brawdy, 62 P.3d 391, 392 (Okla. Ct. App. 2002). Spoliation of evidence without a satisfactory explanation gives rise to an inference unfavorable to the spoliator. See Manpower, Inc. v. Brawdy, 62 P.3d 391, 392 (Okla. App. 2002). A party asserting spoliation must establish negligent or willful destruction of evidence which impairs the party’s ability to prove or defend a claim. Barnett v. Simmons, 197 P.3d 12, 25 (Okla. 2008).
Statute of Limitations
Personal Property2 YearsOkla. Stat. Ann. Tit. 12, § 95
Personal Injury/Death2 YearsOkla. Stat. Ann. Tit. 12, § 95
Breach of Contract/Written5 YearsOkla. Stat. Ann. Tit. 12, § 95(A)(1)
Breach of Contract/Oral3 YearsOkla. Stat. Ann. Tit. 12, § 95(A)(2)
Breach of Contract/Sale of Goods5 YearsOkla. Stat. Ann. Tit. 12A, § 2-725
Staute of Repose/ProductsN/AN/A
Statute of Repose/Real Property10 YearsOkla. Stat. Ann. Tit. 12, § 109*
Breach of Warranty5 YearsOkla. Stat. Ann. Tit. 12A, § 2-725
Workers’ Comp Third Party Case2 Years85 Okla. Stat. Ann. § 348 and 85 Okla. Stat. Ann. § 43
Strict Product Liability2 YearsOkla. Stat. Ann. Tit. 12, § 95
Statute of Limitations Exceptions
*10 Years from substantial completion of improvement to real property. Okla. Stat. Ann. Tit. 12 § 109.
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 2 Years. Okla. Stat. Ann. Tit. 12, § 95.
Subrogation of Medical and Disability Benefits are allowed. Am. Med. Sec. v. Josephson, 2000 OK CIV APP 127, ¶ 7, 15 P.3d 976, 978.
Made Whole Doctrine applies, but it can be overcome by clear policy language. Reeds v. Walker, 2006 OK 43, 157 P.3d 100; Equity Fire & Cas. Co. v. Youngblood, 1996 OK 123, 927 P.2d 572. Common Fund Doctrine applies. Okla. Tax Comm’n v. Ricks, 885 P.2d 1336 (Okla. 1994).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: Okla. Stat. Tit. 12 § 2702
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: No.
Failure To Disclose A Basis For Bad Faith: Insurer has duty to accept a reasonable settlement offer within policy limits, especially when there is a chance of an excess verdict. Badillo v. Mid Century Ins. Co., 121 P.3d 1080 (Okla. 2005).
Comments: All insurance limits are discoverable during litigation, but there is no pre-suit requirement to disclose limits. Okla. Stat. tit. 12, § 3226(B)(1).
One-Party Consent: Pursuant to the Security of Communications Act, it is not unlawful for an individual who is a party to or has consent from a party of an in-person or electronic communication to record and or disclose the content of said communication unless the person is doing so for the purpose of committing a tortious or criminal act. Okla. Stat. Ann. tit. 13, § 176.4; Okla. Stat. Ann. tit. 13, § 176.2.
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 2 years for personal injury and wrongful death. Okla. Stat. Ann. Tit. 12 § 95(3). Discovery Rule applies. Statute of Repose is 10 years. Okla. Stat. Ann. Tit. 12 § 109.
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Modified Comparative. Okla. Stat. Ann. Tit. 23 § 13.
Non-Economic Caps/Limits On Actual Damages: Yes (With Exceptions).
Punitive Y/N and Limits: Yes (Limits).
Heeding Presumption?: Yes. Cunningham v. Charles Pfizer & Co., 532 P.2d 1377, 1382 (Okla. 1974).
Innocent Seller Statute: Yes.
Joint and Several Liability: Several Only. 23 Okla. Stat. Ann. § 15.
Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Government Contractor Defense; Presumption; Alcohol/Drugs; Sophisticated User.
Restatement 2nd or 3rd?: Both.
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Condominium/Co-Op Waiver of Subrogation Laws
No waiver of subrogation required. 60 Okla. Stat. Ann. § 526.
Damage to Property Without Market Value
Service Value: “… by the negligence of another is entitled to … be restored to the same position it was in prior to the accident, and is not restricted to recovery of the depreciated value of the pole, nor to depreciated value of pole plus amount of expenses incurred, depreciated to the same extent as the depreciated value of the pole.” Polk v. Oklahoma Gas & Elec. Co., 410 P.2d 547 (Okla. 1966).
Intrinsic Value: “The measure of damages in an action for injury to used articles of personal property having no fixed market value is the value of the goods to the owner; not any fanciful value…” Oklahoma Transp. Co. v. Seminole Lodge No. 430, I.O.O.F.I, 217 P.2d 164 (Okla. 1950).
Sentimental Value: “The measure of damages in an action for injury to used articles of personal property having no fixed market value is the value of the goods to the owner; not any fanciful value…” Oklahoma Transp. Co. v. Seminole Lodge No. 430, I.O.O.F.I, 217 P.2d 164 (Okla. 1950).
General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims
Payment And Depreciation Of GCOP/Sales Tax: Probably Three-Trade Rule. In one case, the plaintiff argued that once a determination is made that three trades are necessary for the repair of the property, it is presumed that a general contractor is necessary to coordinate, supervise, and oversee the repair. Burgess v. Farmers Ins. Co., Inc., 151 P.3d 92 (Okla. 2006). One trial court has held that the three-trade rule is an accepted industry standard. Cormier v. State Farm Gen. Ins. Co., Case No. CJ-2002-930 (Comanche County, Okla.). In Redcorn v. State Farm Fire & Cas. Co., 55 P.3d 1017 (Okla. 2002), the Supreme Court said that, in determining ACV, using the replacement costs less depreciation method, labor costs could be depreciated. The Supreme Court held that because a roof was a “single product consisting of both materials and labor,” depreciation of the whole product, including labor, was appropriate when determining ACV.
The fire insurer is not entitled, as subrogee, to bring an action against the tenant to recover for amounts paid to the landlord for fire damage to rental premises caused by the tenant’s negligence in absence of express agreement between the landlord and tenant to the contrary. Landlord and tenant are co-insureds under the fire policy. Sutton v. Jondahl, 532 P.2d 478 (Okla. App. 1975) (known as the “Sutton Rule”).
An insurer may not subrogate against their insured or a co-insured on the policy. Travelers Ins. Companies v. Dickey, 799 P.2d 625 (Okla. 1990). The agreement between the property owner and subcontractor determines whether a subcontractor is a co-insured on the policy. Id. In Dickey, a building that Dickey was replacing the roof on suffered extensive damage after Dickey negligently failed to waterproof the roof. Travelers Insurance Company (“Travelers”) paid the building owner for the water damage and then sought to subrogate against Dickey for the damage. Dickey attempted to block the subrogation claim on the basis that he was a co-insured under the owner’s policy and that the owner had previously agreed to not hold Dickey liable for damages. The court ruled that subrogation could proceed on the basis that Dickey was not co-insured under the owner’s policy because Dickey was not expressly named, there was no reference in the agreement to it applying to anyone else besides the owner, and the agreement expressly required Dickey to hold his own liability insurance. The court also found that the previous agreement to not hold Dickey liable also did not apply because that agreement also required that Dickey hold liability insurance, and limited the owner’s requirement to only holding insurance for damage to the roof itself. Because the damage that occurred was to the interior of the building, the agreement to not hold Dickey liable did not hold because it only applied to damage to the roof, not for damage to the interior, that damage was supposed to be covered by Dickey’s general liability insurance.
Oklahoma statute specifically allows a court to award a “victim” restitution paid by a convicted criminal defendant. Okla. Stat. tit. 22 § 991f. Although no Oklahoma case law or statute directly addresses an insurer’s right to restitution amounts, a “victim” under the restitution statute is defined as “any person, partnership, corporation or legal entity that suffers an economic loss as a direct result of the criminal act of another person.” Okla. Stat. tit. 22 § 991(f)(2).
Made Whole Doctrine
Oklahoma first considered application of the Made Whole Doctrine in 1996 and with regard to an ERISA Plan. Equity Fire & Cas. Co. v. Youngblood, 927 P.2d 572 (Okla. 1996). Where the ERISA Plan’s subrogation or reimbursement terms neither expressly set a priority for repayment of benefits, nor otherwise give the right to subrogation or reimbursement before any funds are paid to the beneficiary, the Made Whole Doctrine will apply. Id; Reeds v. Walker, 2006 WL 1686739 (Okla. 2006).
In 2000, an Oklahoma Court of Appeals applied the Made Whole Doctrine for the first time to a non-ERISA Plan. American Medical Sec. v. Josephson, 15 P.3d 976 (Okla. Civ. App. 2000). It declared that the reimbursement and subrogation provisions of a group health Plan were unenforceable unless the Plan beneficiary was fully compensated by the tortfeasor. Id. The court did give some wiggle room, however, and implied that if there was a “priority-of-payment provision,” the result might be different. Id.
The Made Whole Doctrine in Oklahoma has been described as prohibiting an insurer from recouping anything by way of subrogation or reimbursement until the insured has been made entirely whole for recovery of all compensatory damages to which he is entitled. Sunbeam-Oster Co., Inc. Group Ben. Plan v. Whitehurst, 102 F.3d 1368 (5th Cir. 1996). When there is a settlement, evidence must be proffered by the insurer as to the elements of damages recovered in and represented by the settlement funds. Where the record before the trial court contains no such evidence, it is not possible to determine whether or not the Plan beneficiary has been made whole. Josephson, supra.
Unlike the case in Georgia (Thompson v. Fed. Express Corp., 809 F. Supp. 950 (M.D. Ga. 1993), simply because a Plan beneficiary settles and executes a release in Oklahoma, doesn’t mean that he has been “fully compensated” or “made whole” as a matter of law. Id. A settlement in Oklahoma does not necessarily represent an injured party’s actual or total compensatory damages. Price v. Southwestern Bell Tel. Co., 812 P.2d 1355 (Okla. 1991). There is still ample authority in Oklahoma to the effect that the Made Whole Doctrine may be overridden by specific contract terms in a policy or Plan. Williams & Miller Gin Co. v. Baker Cotton Oil Co., 235 P. 185, 187 (Okla. 1925); Reeds v. Walker, 2006 WL 1686739 (Okla. 2006); Fields v. Farmers Ins. Co., 18 F.3d 831 (10th Cir. 1994) (applying Oklahoma law). The Oklahoma Supreme Court indicated in Reeds that the following Plan reimbursement language was not sufficient to overcome the Made Whole Doctrine:
When We pay benefits under the Plan and it is determined that a third party is liable for the same expenses, We have the right to subrogate from the monies payable from the third party equal to the amount We have paid for such benefits. You must reimburse Us from any monies recovered form (sic) a third party as a result of a judgment against or settlement with or otherwise paid by the third party. You must take action against the third party, furnish all the information and provide assistance to Us regarding the action taken, and execute and deliver all documents and information necessary for Us to enforce Our rights of subrogation.
The Court in Reeds set a new priority-of-payments standard. An insurance contract stands subject to the make-whole rule unless it contains an unequivocal, express statement that the insured does not have to be made whole before the insurer is entitled to recoup its payments. Reeds, supra.
Addressing the enforceability of subrogation provisions in an ERISA claim context, the Oklahoma Supreme Court held if the plan doesn’t specifically provide that the insurer is entitled to priority of payment, doesn’t expressly give its managers the right to resolve ambiguities, and the facts do not clearly show the beneficiary’s settlement included reimbursement for medical expenses, the plan won’t be allowed to recover unless the insured is made whole. Equity Fire and Cas. Co. v. Youngblood, 927 P.2d 572 (Okla. 1996); American Med. Sec. v. Josephson, 15 P.3d 976 (Okla. Civ. App. 2000) (holding that, in the absence of a priority-of-payment provision, subrogation clause is unenforceable unless insured has been fully compensated).
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: Common law CSR. Receipt of collateral source benefits by plaintiff does not lessen the damages recoverable from tortfeasor and no evidence of collateral sources allowed. Denco Bus Lines v. Hargis, 229 P.2d 560 (Okla. 1951).
Recovery Of Medical Expenses Rule:
Private Insurance: Tortfeasor may not benefit from medical expense payments made by a policy held and paid for by plaintiff. Weatherly v. Flournoy, 929 P.2d 296 (Okla. App. 1996). Very little case law on issue, but courts consistently allow plaintiffs to recover the amount billed. Auto Med Pay carrier not required to pay amounts medical expenses written down for insured’s health insurer. Woodrich v. Farmers Insurance Co., Inc., 405 F.Supp.2d 1276 (N.D. Okla. 2004) (applying Oklahoma law).
Medicare/Medicaid: Oklahoma hasn’t decided whether CSR permits plaintiff to recover medical expenses written off by Medicare or Medicaid. A reasonable interpretation of the CSR would be not to allow plaintiffs to recover Medicaid write-offs, because plaintiffs do not pay for it like they do Medicare. Simpson v. Saks Fifth Ave., Inc., 2008 WL 3388739 (N.D. Okla. 2008).
Workers’ Compensation: No evidence of compensation benefits allowed in determining plaintiff’s damages. Employer is not given a credit for expenses paid by other types of insurance procured by claimant. 85 Okla. Stat. § 45(A); Blythe v. Univ. of Okla., 82 P.3d 1021 (Okla. 2003).
Governmental Immunity: Government entities exempt from liability if injuries covered by workers’ compensation. 51 O.S. § 155(14); Gladstone v. Bartlesville Independent School Dist. No. 30, 66 P.3d 442 (Okla. 2003).
Medical Malpractice: Allows evidence of medical expense collateral source payments in medical malpractice actions. Exception for payments subject to subrogation by the plaintiff’s insurer. 63 Okla. Stat. § 1-1708.1B(B).
Employee Leasing Laws
Neither the Oklahoma Workers’ Compensation Act nor case law directly addresses the Exclusive Remedy Rule in connection with employee leasing situations. The Oklahoma Court of Appeals, however, has held that a worker assigned by a temporary agency to a client company is considered a loan servant, and that both employers are responsible for the provision of workers’ compensation, and therefore cannot be sued in a third-party action. Zant v. People Electric Co-op., 900 P.2d 1008 (Okla. App. 1995).
Hospital Lien Laws
Statute: 42 Okla. Stat. §§ 43, 44. Liens.
(1) File written notice containing statement of amount claimed, name and address of patient, date of accident, name and location of hospital, and name of tortfeasor, in office of the county clerk of the county in which the hospital is located.
(2) Hospital must send notice of this lien, by certified or registered mail, to the patient and any attorney. § 44.
Comments: Hospital has lien on any third-party recovery for reasonable and necessary charges up to date of payment. Lien subject to attorneys’ fee lien. Doesn’t apply if workers’ compensation applies. Lien also applies to medical diagnostic imaging facilities. § 43. Lien can be enforced by civil action in district court of county where lien was filed if brought within one year after hospital becomes aware of final judgment or settlement. § 44. Physician has identical lien and procedure. § 46.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP.
Statutory Employer Law: Whereas most states refer to non-employers who become liable for workers’ compensation benefits as “statutory employers,” Oklahoma refers to them as “general employers” or “intermediate employers.” Liability for workers’ compensation benefits owed by an “immediate employer” may fall onto either a “general employer” or an “intermediate employer” under certain conditions.
Comments: A “principal employer” is secondarily liable for a subcontractor’s employee’s injury if the immediate employer has failed to provide comp coverage and the principal employer has failed to exercise “good faith” to determine the existence of coverage under a valid insurance policy. 85 O.S. §11(B)(2). The work of the subcontractor must be necessary and integral to the work of the principal employer. The “good faith” requirement of §11(B)(2) is satisfied when the “principal employer” obtains a certificate of insurance showing the period of the subcontractor’s work. “Good faith” requires a continuing obligation to obtain a current certificate on the expiration date of the coverage. The principal employer is entitled to rely on the certificate of coverage and is not secondarily liable. Myers v. Wescon Constr. Inc., 59 P.3d 1277 (Okla. App. 2002).
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? Undecided.
Statute/Case Law: None.
Rule Summary: There is no authority or precedent regarding the attempted recovery of damages for increased workers’ compensation insurance premiums by an employer from a third-party tortfeasor.
Which Workers’ Compensation “Benefits” Can Be Subrogated?
Section 348 describes a workers’ compensation carrier’s subrogation lien as follows: … the compensation provided or estimated by the Workers’ Compensation Code for such case. Okla. Stat. Ann. Tit. 85, § 348(A).
On July 29, 2022, the Oklahoma Court of Appeals decided the case of Jones v. Cabler and Hobby Lobby. Jones v. Cabler and Hobby Lobby, Case No. 119,459 (Okla. App. July 29, 2022). In Jones, the employee argued that the carrier was not entitled to be reimbursed for “nurse case manager” costs it had paid, because they were not a “benefit paid” to the employee and therefore not subject to subrogation. The employee’s argument was that 85A O.S. §113 indicates that case management costs are to be “borne by the employer or insurance carrier.” The court dismissed that argument by indicating that medical expenses and indemnity benefits were also “borne” by the carrier—until such time as there was a third-party recovery and the carrier was reimbursed. Although nurse case management fees are “initially” borne by the carrier, the statute does not say that the carrier is not entitled to reimbursement under Section 43. The employee also argued that such nurse case management fees were not “compensation” as defined in 85A O.S. §2(10). That section defines “compensation as “the money allowance payable to the employee or to his or her dependents and includes the medical services and supplies provided for in Section 50 of this title and funeral expenses.” Section 50 in turn provides:
…the employer shall promptly provide an injured employee with medical, surgical, hospital, optoetric, podiatric, chiropractice and nursing services, reasonably necessary in connection with the injury received by the employee.
The Court of Appeals disagreed and held that they had no evidence before them as to what services a medical case manager performed. The employee admitted that “a medical case manager facilitates communication between medical service providers and the adjuster” and “is chosen by the claims handler to make his job easier.” The court noted that 85A O.S. §2(4) defines a case manager as:
- “Case manager” means a person who is a registered nurse with a current, active unencumbered license from the Oklahoma Board of Nursing, or possesses one or more of the following certifications which indicate the individual has a minimum number of years of case management experience, has passed a national competency test and regularly obtains continuing education hours to maintain certification:
a. Certified Disability Management Specialist (CDMS),
b. Certified Case Manager (CCM),
c. Certified Rehabilitation Registered Nurse (CRRN),
d. Case Manager–Certified (CMC),
e. Certified Occupational Health Nurse (COHN), or
f. Certified Occupational Health Nurse Specialist (COHN-S)
Because this definition requires very specific and strictly medical qualifications and implies that a medical case manager has a medical role in managing an injured employee’s treatment (rather than simply performing administrative functions to assist a claims manager, the court held it was reimbursable to the workers’ compensation carrier.
As of 2012, Oklahoma requires compliance with ODG Guidelines. See the state of Kentucky and the Preamble above for an argument that the subrogated carrier can recover the “case manager’s” fee for development of a “treatment plan,” utilizing the ODG guidelines.
Workers’ Compensation Subrogation Waiver Endorsements
Subrogation Statute: 85 O.S. § 348104 (Accident Prior to 2/1/14) and 85 O.S. § 43 (Accident After 2/1/14).
Waiver Allowed? Nothing in the Oklahoma Workers’ Compensation Act or applicable case law prohibits the use or efficacy of a waiver of subrogation.
Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: Oklahoma provides for a statutory right of reimbursement (Section 348(A)) that permits the carrier to seek and obligates the claimant to pay reimbursement for w/c benefits previously paid from the third-party recovery. Frank’s Tong Serv. v. Lara, 2013 WL 7809847 (Okla. App. 2013).
Other Applicable Law: None.
ACCIDENT PRIOR TO FEBRUARY 1, 2014
Statute of Limitations: 2 Years. 85 Okla. Stat. Ann. § 348.
Can Carrier Sue Third Party Directly: Yes.
Right tot Intervene: Yes.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: Yes.
Recovery Allocation/Equitable Limitations: (1) Fees – costs off top; (2) If recovery is “compromise settlement” approval of court is needed. Balance apportioned as parties may agree. If no agreement, the court can equitably apportioned; and (3) If recovery is not “compromise settlement, Prettyman formula allowed.
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: No.
Future Credit: Only if the recovery is more than the lien.
Auto No-Fault: No.
ACCIDENT AFTER FEBRUARY 1, 2014
Statute of Limitations: 2 Years. 85 Okla. Stat. Ann. § 43.
Can Carrier Sue Third Party Directly: Yes.
Intervene: Must intervene.
Recovery from UM/UIM Benefits: Yes.
Subrogation Against Medical Malpractice: Yes?
Subrogation Against Legal Malpractice: Yes?
Recovery Allocation/Equitable Limitations: (1) Fees – costs off top; (2) Carrier receives 2/3 of net recovery or its entire lien, whichever is less; and (3) Balance to plaintiff.
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: No.
Future Credit: No, must recover future payments in third-party recovery.
Auto No-Fault: No.
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute is silent on “aliens” and does not mention “illegal” or “legal” status. But, the statute is broad with the phrase “any person in service to an employer.”
Case Law: Lang v. Landeros, 918 P.2d 404 (Okla. Civ. App. 2004).
Comments/Explanation/Other: Lang held that there is no wording or exception in the Workers’ Compensation Act that precludes compensation for an illegal alien.