The Oklahoma Legislature has created an incentive for insurance companies to investigate insured claims in a timely manner and resolve those claims. This incentive comes in the form of a statute, 1 which explicitly gives an insured the right to recover the costs and fees paid to his or her lawyers when the insured prevails at a trial (or, in other words, when the jury agrees that the insurance company should have paid a claim). The money for these fees and costs is paid by the insurance company. This is huge for policyholders, as legal fees and litigation costs can reach thousands of dollars – sometimes hundreds of thousands.
In a recent federal case, Hamilton v. Northfield Insurance Company the insurer came dangerously close to restricting that policyholder's right in a court decision. 2
Facts in the trial were summarized by Steven A. Meyerowitz, Esq., Head of FC&S Legal : 3, 4
Billy Hamilton filed a claim with Northfield Insurance Company in December 2015 regarding the leaking roof of a commercial building he owned. Northfield denied Hamilton's claim in February 2016 and again in April 2016. Hamilton sued Northfield in November 2016.
In June 2017, Mr. Hamilton's attorney sent Northfield's attorneys an email with a revised draft of the review. In that statement, Hamilton's attorney asked Northfields lawyers to send him & # 39; & # 39; a serious settlement offer & # 39; & # 39; the following week and noted that he had & # 39; & # 39; almost $ 12,000 in hard costs invested in this case so far & # 39; & # 39; and conveyed that information & # 39; & # 39; because the number affects how much of a settlement Hamilton would get. & # 39;
The Northfield adviser replied that the insurance company was & # 39; willing to offer $ 45,000 to resolve this case & # 39; and observed that they & # 39; believe [d] this [wa] said fair offer because it [wa] is more than three times the actual damages in this case. & # 39;
Northfield's advisers also stated: & # 39; Based on your legal costs, you will be able to reimburse these costs along with certain fees and should reimburse Mr. Hamilton for all his repair costs. & # 39;
Mr. Hamilton rejected Northfield's settlement offer, and the case went to trial, resulting in a $ 10,652 verdict, the maximum amount of damages the judge instructed the jury to award.
Mr. Hamilton then filed applications for attorney's fees and statutory interest under 36 Okla Stat. § 3629 (B).
Northfield replied that Hamilton was not the ruling party under the Charter given that he had recovered less than the settlement offer. The district court agreed with Northfield and rejected Hamilton's argument for adding attorney's fees to the verdict when he ruled the ruling party.
Mr. Hamilton appealed to the tenth circle.
The intimidation arose when only the tenth district confirmed the decision of the trial court that Hamilton was not the ruling party entitled to legal fees and costs under §3629. 5 It was at this point in the proceedings that Drew Houghton of the Merlin Law Group and other lawyers in the Oklahoma Association of Justice ("OAJ") acknowledged that the decision of the Tenth Circuit would harm not only Mr. Hamilton who was directly involved in the lawsuit but also many other policyholders in Oklahoma who are wrongly denied coverage by their insurance company each year. Because of this, Drew and other OAJ colleagues, Simone Fulmer, Rex Travis and Timothy Hummel, made the simple decision to jump into the fray and go "all in" to get the team right. Although they were not Hamilton's lawyers, they decided to join the proceedings on behalf of the OAJ as Amicus Curiae 6 (Latin for "friend of the court"). Following a petition for a banc rehearsal and submission of Amicus Curiae cards in support of Hamilton, the Tenth Circuit submitted its opinion and certified two issues to Oklahoma's Supreme Court. 7 The certified questions were:
1. When determining who is the ruling party under Okla Stat. mes. 36, §3629 (B), should a court consider settlement offers from the insurer outside the sixty (formerly ninety-) day window to make such offers under the statute?
2. In determining who is the ruling party under Okla Stat. mes. 36, §3629 (B), shall a court add court costs and attorney's fees that have arisen up to the offer of settlement for comparison with a settlement offer that considered costs and fees?
Significantly, the Supreme Court of Oklahoma answered "No" to the first question, with Hamilton and OAJ in each question. 8 In the amicus curiae summary, Drew and OAJ argued that when reading the charter as a whole and considering the overall context in which it exists, it is clear that "written offer of conciliation" refers to an insurance company's written offer to fulfill their insurance obligations to their insured, not an offer to settle a "dispute or lawsuit" with their insured, which the court originally found. In addition, by reaching its original conclusion to deny Hamilton as the ruling party in this case, the federal court was in favor of establishing a benchmark that is inconsistent with the long-standing case law in Oklahoma. "Should this court allow insurers to cover the sixty-day claim in full, offer payment at a later date and then use the premature payment to deny attorney fees to the policyholder, the purpose of a charter intended to ensure prompt payment of claims would be nullified," Oklahoma Supreme said. Court Chief Justice Noma D. Gurich. While fast wage laws vary from state to state, they are crucial to policyholders' right to regain insurance benefits after incorrect rejection or late payment of an insurance claim. The policyholders' right to legal fees and costs after the insurance company's failure to pay a claim on time and discourages them from acting in bad faith. Oklahoma is one of many states that protect policyholders with these types of charters.
After receiving the published decision of the Supreme Court of Oklahoma 9 answering the certified questions of the Tenth Circuit confirming the right of Oklahoma policyholders to legal fees and costs resulting from wrongly denied claims, the Tenth Circuit issued its final and judgment, worded as follows:
In the light of the decision of the Supreme Court of Oklahoma, Hamilton is the "ruling party" within the meaning of § 3629. Hamilton is thus entitled to reasonable attorneys' fees and statutory interest at an annual interest rate of fifteen percent . § 3629. 10
I now have the extremely exciting opportunity to work with Drew in the Merlin Law Group's office in Oklahoma City and fight for the rights of Oklahoma's insured. As the newest lawyer in the Oklahoma City office, I'm happy to move from medical malpractice to fighting for the rights of policyholders whose insurance companies incorrectly deny their claims and prevent their homes and businesses from being repaired after catastrophic weather events. Drew's willingness to jump into a fight that was not his client's is just one example of Merlin Law Group's perseverance and it shows how hard our company will work to help policyholders, even when it's not ours.
1 36 OS § 3629 (B)
2 Hamilton v. Northfield Ins. Co. No. 16-519, 2017 WL 6337468 (ED Okla. 28 August, 2017).
3 Steven A. Meyerowitz, Oklahoma Supreme Court Asked to Decide When Insured is "Prevailing Party" in Suit Against Insurer Insurance Coverage Law Center, January 28, 2020. (subscription required).
4 It is also important to note that in court proceedings, the judge granted summary Judgment for Northfield on Hamilton's alleged infidelity that only allows breach of contract to go to trial.
5 Hamilton v. Northfield Ins. Co. 910 F. 3d 1320 (10 Cir. 2018) (interrogation granted, judgment set aside by Hamilton v. Northfield Ins. Co. 761 Fed. Appx. 794 (10 Cir. Jan 18, 2019).
6 A copy of the amicus brief can be provided upon request, please email: firstname.lastname@example.org
7 Hamilton v. Northfield Ins. Co. 761 Fed App. the insurer before disputes and thus before such charges have arisen, the court found that it is inappropriate to stack attorney's fees on top of the calculation of "prevailing party".
9 Hamilton v. Northfield Ins. Co. –P.3d– , 2020 OK 28 (Okla. 5 May 2020).
10 Hamilton v. Northfield Ins. Co. 817 Fed. Appx. 573 (10 round 8 June 2020).