Summers v. Zurich American Insurance Company

    In Summers v. Zurich American Insurance Company, the Supreme Court of Oklahoma addressed the parameters of Sizemore‘s requirement of certification before a claimant may proceed in District Court for a Bad Faith claim. While Sizemore related to Defendant’s failure to pay a Workers’ Compensation award for monetary benefits, Summers involved the failure to provide non-monetary benefits ordered by the Workers’ Compensation Court for medical treatment. Summers clarified that Sizemore‘s holding extended the duty of good faith to all benefits, not just monetary.

Summers noted that the purpose of the certification requirement is to not only provide an incentive for prompt payment of Workers’ Compensation awards, but also Rule 58 certification provides the insurer the opportunity to show good cause as to why the award of benefits remains unfulfilled. When the insurer fails to show good cause after failure to provide the court-ordered benefits, “a reasonable inference arises that the reason for the failure to obey the award involves a refusal to comply, not mere negligence.” Thus, this inference should give rise to a jury instruction on a rebuttable presumption as well as lay the foundation for a punitive damage instruction.

The Court in Summers held that the Sizemore certification requirement was met. The Court explained Sizemore stating that a claimant need not “seek enforcement of a certified order” in order to bring an action for Bad Faith. Rather, the Court held that the order need only be “certified for enforcement” before a bad faith action could be maintained. In Summers, the Workers’ Compensation Court Orders evidenced that the Insurer had repeatedly failed to comply with prior Final Orders of the Workers’ Compensation Court directing Insurer to provide Claimant with medical care. Notably, the language in Summers appears to provide a District Court remedy regardless of whether the prior unsatisfied order was for specific medical treatment or reasonable and necessary medical treatment.

For monetary awards, there is essentially an election of remedies. Once the order is certified, a claimant may seek enforcement in District Court or bring an action for Bad Faith. On non-monetary awards, even though Rule 58 and Section 42(A) apply only to orders that can be reduced to a sum certain, the Court held that a claimant must utilize a similar method so as to give the insurer the same 10 day period to show good cause why the order for medical treatment should not be certified as “not provided.” This holding is consistent with the Court’s recognition that a non-monetary order could never be enforced under Section 42(A).

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