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Goodwin v. Old Republic Ins. Co.3/17/1992
AFFIRMED.
The opinion of the court was delivered by: KAUGER, Justice.
Workers' compensation insurance falls within 36 O.S. 1981 _ 707's definition of casualty insurance which provides that casualty insurance includes workers' compensation and employers' liability insurance. Workers' compensation insurers are not exempted from provisions of the Oklahoma Insurance Code (Insurance Code), 36 O.S.Supp. 1983 _ 101 et seq. The Unfair Claims Settlement Practices Act (Claims Practices Act), 36 O.S.Supp. 1985 _ 1220 provides in _ 1222 that no property or casualty insurer shall engage in unfair claim settlement practices, and it defines an unfair claim settlement practice as:
". . . Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims submitted in which liability has become reasonably clear. . . ."
Section 1227 of the Claims Practices Act provides that its provisions:
". . . shall apply specifically to all claims arising under insurance policies providing liability coverage."
By definition intentional, wilful acts are not within the purview of the Workers' Compensation Act. Title 85 O.S.Supp. 1988 _ 3 (7) defines the injuries covered as accidental injuries arising out of and in the course of employment. Neither _ 12 nor _ 3(7) precludes an intentional tort claim. Goodwin is not attempting to recover for his physical impairment; he is not seeking to recover from his employer; but rather, he seeks compensation for injuries because of the insurer's alleged intentional failure to pay his compensation award in a timely manner. Section 12 provides an exclusive remedy for one type of claim - work-related injuries i.e., the liability of the employer. A bad faith claim is separate and apart from the work relationship, and it arises against an insurer only after there has been an award against the employer.
Workers' compensation insurance is purchased by the employer for the benefit of its employees. Failure of a carrier to pay promptly a claim impacts on the employer-employee relationship. The employer purchases workers' compensation insurance to provide care for its employees. Employers as well as employees rely upon the workers' compensation system for protection for on-the-job injuries. The employer, the injured employee and other employees in the workplace expect payment in the event of a job -related injury. Otherwise, morale in the workplace suffers, which impacts productivity. The employee, who by a statute is made a third-party beneficiary to the workers' compensation insurance, is in the same class as an insured and may expect prompt payment of his/her claim unless the insurer in good faith asserts a basis for contesting it. Failure to pay promptly may result in the workers' compensation insurer's liability for more than the statutorily set recoveries. Again, we quote from Christian:
"Th(e) statutory duty imposed upon insurance companies to pay claims immediately, recognizes that a substantial part of the right purchased by an insured is the right to receive the policy benefits promptly. Unwarranted delay precipitates the precise economic hardship the insured sought to avoid by purchase of the policy.
(Threatened and actual bad faith refusals to make payments by an insurance carrier) constitutes a tortious interference with a protected property interest of its insured for which damages may be recovered to compensate for all detriment proximately resulting therefrom, including economic loss as well as emotional distress resulting from the conduct or from the economic losses caused by the conduct, and, in a proper case
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