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Sue Chimento sued, alleging defamation, negligence, intentional interference with business relations, false representation, constructive fraud and conspiracy against Gallagher Benefit Services, Inc., and Scott McCoy, based on allegations they made to the Tulsa Police Department, the Tulsa County District Attorney’s Office, and Oklahoma Insurance Department that she had embezzled money during their employment. The trial court granted partial summary judgment to the defendants, finding that their statements to the police and the district attorney were subject to an absolute privilege and that their statements to the Oklahoma Insurance Department were covered by a qualified privilege under 36 OS § 363.
IN Sue Chimento v. Gallagher Benefit Services, Inc., and Scott McCoy, individuallyNos. 120089, 120101, 2023 OK 22, Oklahoma Supreme Court (March 21, 2023) resolved the dispute.
BACKGROUND
Petitioner, Sue Chimento was to pay individual premiums on behalf of client Native American Tribes employees from the tribal account. Considering how the checking account was used, it was typical for the checking account to have a balance of zero.
In March 2017, Midfirst Bank discovered that the checking account was overdrawn. Shortly after the management’s Mr. McCoy questioned Chimento as to why the account was overdrawn, Chimento terminated his employment with AJG. McCoy then filed a report with the Tulsa Police Department (“TPD”) alleging that Chimento embezzled approximately fifty-one thousand dollars ($51,000.00).
Shortly thereafter, the Tulsa County District Attorney filed a criminal information charging Chimento with one count of embezzlement. The district attorney later dismissed the charges against Chimento for insufficient evidence.
IMMUNITY DEFENSE
The defendants argued that any of their statements to the TPD, the District Attorney’s Office, and the OID were subject to an absolute privilege, and therefore the claims must fail to the extent any of Chimento’s claims were based on those statements. The trial court granted summary judgment to AJG/GBS on all of Chimento’s remaining claims. The trial court found that the defendants’ statements to the TPD and to the District Attorney’s Office were subject to an absolute privilege under 12 OS § 1443.1 and their statements to the OID were subject to a qualified privilege under 36 OS § 363.
DISCUSSION
The Supreme Court concluded that the defendant’s statements to law enforcement were entitled to a qualified privilege.
The Supreme Court previously applied an absolute privilege to communications made under various proceedings and finds that statements made to law enforcement enjoy a qualified—and not absolute—privilege. Thus, any statements made by defendant to TPD and the District Attorney’s Office are only qualified privileged.
Defendant’s statements to the Oklahoma Insurance Department are entitled to a qualified privilege.
The immunity provisions in §363 expressly apply to reports made when an insurer provides information, either verbally or in writing, for the investigation or prosecution of suspected insurance fraud. The terms of the statute, insofar as immunity applies, are clear and unambiguous. If any insurer provided information for an investigation or prosecution, as they did in this case, they are protected from civil action for libel, slander or other relevant tort or criminal action.
The Supreme Court concluded that the clear and unequivocal intent of Section 363 is to provide qualified immunity from civil action for individuals who provide information to OID regarding fraudulent insurance activity.
As noted in OID’s notice of hearing to Chimento, its investigation was prompted by and relied upon the investigation by the Tulsa Police Department of allegations made by defendants against Chimento. The allegations in the notice of hearing relate exclusively to Chimento’s employment of the Defendants.
Therefore, defendant’s statements to TPD and the District Attorney’s Office are entitled to a qualified privilege. Likewise, defendant’s statements to the Oklahoma Insurance Department are entitled to a qualified privilege under 36 OSSupp.2012 § 363.
State law requires insurers to report to the Oklahoma Department of Insurance (OID) suspected insurance fraud, and by law an insurer is granted immunity from certain lawsuits such as those brought by the plaintiff if the action is based on the report to OID. The report to the police, if made in good faith, usually confers absolute immunity but Oklahoma no makes the immunity qualified. Whether qualified or absolute, immunity protected the defendants.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and zalma@zalma.com
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