Oklahoma Judge Says Insurer May Have Acted in Bad Faith

Posted April 8, 2016

Recently, a federal judge in Oklahoma found sufficient evidence to support the contention that Hartford Life Insurance Company did not appropriately and thoroughly investigate a claim for benefits and so may have acted in bad faith.

Anita Houchin v. Hartford Life Insurance

The claimant, Anita Houchin, was the beneficiary of a $75,000 life insurance policy provided by the Hartford Life Insurance Company. When Houchin attempted to obtain the benefits upon the death of the policyholder, she was denied.

As a result of the denial, Houchin filed suit against Hartford Life in an Oklahoma County District Court, arguing that the insurer breached the implied covenant of good faith and fair dealing. Houchin further accused Hartford Life of false representation and deceit.

The insurer subsequently removed the action to the U.S. District Court for the Western District of Oklahoma, where a judge agreed to bifurcate the suit into two phases, one concerning liability and potential compensatory damages, and the other, punitive damages, if appropriate. Hartford Life then filed a motion for summary judgment, which the judge partially granted.

In his holding, the judge stated that summary judgment for Hartford Life was appropriate as it pertained to the fraud claim because there was insufficient evidence to support the allegation of fraud. However, the judge denied the motion for summary judgment in regards to Houchin’s claims of bad faith, as there was evidence that Hartford Life did not undertake an investigation and did not have a reasonable basis to deny Houchin’s claim. Furthermore, the judge also stated that, based on the evidence, the insurer’s conduct may also warrant an award of punitive damages.

Punitive Damages

According to Oklahoma law, insurers can only be subject to punitive damages for a breach of their duty to deal fairly and in good faith with policyholders if clear and convincing evidence exists that the breach was either reckless or intentionally malicious. The judge stated that Houchin’s claim that Hartford Life disregarded her right to fair treatment, reasonable investigation, and timely payment fell within these parameters.

An insurer’s bad faith practices can wreak havoc on a policyholder’s finances, health, and personal life, so if you or a loved one were unfairly denied coverage, it is vital to obtain the advice of an experienced bad faith insurance attorney who can help ensure that your interests are protected. Please contact a member of our legal team at the Bennett Law Firm at 405-272-0303 to schedule a free consultation.