WORKERS COMPENSATION BAD FAITH LITIGATION IN THE WAKE OF SUMMERS v. ZURICH AMERICAN

WORKERS COMPENSATION WORKERS COMPENSATION BAD FAITH LITIGATION BAD FAITH LITIGATION

IN THE WAKE OF IN THE WAKE OF SUMMERS v. ZURICH AMERICANSUMMERS v. ZURICH AMERICAN

Presented By: Bryan N.B. KingBrooks A. RichardsonFellers, Snider, Blankenship, Bailey & Tippens100 N. Broadway, Suite 1700Oklahoma City, Oklahoma 73102(405) 232-0621

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OverviewOverview

I.I. Discussion of the Discussion of the SummersSummers opinion opinion and and background.background.

II. II. “Functional Equivalent” of “Functional Equivalent” of Certification?Certification?

III. III. Bad Faith Claims Based on Provision Bad Faith Claims Based on Provision To To Provide Non-Monetary Benefits?Provide Non-Monetary Benefits?

IV.IV. “Reasonable Inference” Arising “Reasonable Inference” Arising from from Certification Order?Certification Order?

V.V. Other Issues: Post-FilingOther Issues: Post-Filing

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SECTION I:SECTION I:

A DISCUSSION OFA DISCUSSION OFSummers v. Zurich AmericanSummers v. Zurich American

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Summers v. Zurich AmericanSummers v. Zurich AmericanBackgroundBackground

Nancy Summers sustained a work-Nancy Summers sustained a work-related injury on March 31, 2004.related injury on March 31, 2004.

Workers Compensation Claim made for Workers Compensation Claim made for medical and wage benefits.medical and wage benefits.

Between May 6, 2005 and October 16, Between May 6, 2005 and October 16, 2007, WCC entered several orders 2007, WCC entered several orders relating to: (1) payment of wage relating to: (1) payment of wage benefits; (2) payment of travel and benefits; (2) payment of travel and meal expenses; and (3) provision of meal expenses; and (3) provision of medical treatment.medical treatment.

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Summers v. Zurich AmericanSummers v. Zurich AmericanNon-Monetary Benefit OrdersNon-Monetary Benefit Orders

5/6/055/6/05

That the respondent is directed to provide That the respondent is directed to provide the claimant with reasonable and necessary the claimant with reasonable and necessary medical treatment by Dr. Douglas Kaplan medical treatment by Dr. Douglas Kaplan and Dr. John Munneke, including any and Dr. John Munneke, including any necessary referral to Dr. David Johnsen.necessary referral to Dr. David Johnsen.

That the respondent or insurance carrier That the respondent or insurance carrier shall pay all reasonable and necessary shall pay all reasonable and necessary medical expenses incurred by claimant as a medical expenses incurred by claimant as a result of said injury.result of said injury.

1/27/01/27/066

That the respondent is directed to provide That the respondent is directed to provide the claimant with an evaluation of the the claimant with an evaluation of the claimant’s JAWS (TMJ) under the direction of claimant’s JAWS (TMJ) under the direction of Dr. Patrick Wallace.Dr. Patrick Wallace.

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5/3/065/3/06

That the respondent is directed to provide That the respondent is directed to provide the claimant with reasonable and necessary the claimant with reasonable and necessary medical care by Dr. Robert Hines to the medical care by Dr. Robert Hines to the RIGHT SHOULDER, by Dr. Patrick Wallace to RIGHT SHOULDER, by Dr. Patrick Wallace to the JAW, and by Dr. Brook Edmonds to the the JAW, and by Dr. Brook Edmonds to the MOUTH (TEETH).MOUTH (TEETH).

That the respondent is directed to provide That the respondent is directed to provide Dr. Hines, Dr. Wallace, and Dr. Edmonds with Dr. Hines, Dr. Wallace, and Dr. Edmonds with a photocopy of this order.a photocopy of this order.

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9/25/09/25/066

That the respondent is ordered to provide That the respondent is ordered to provide claimants with an implant crown to TOOTH claimants with an implant crown to TOOTH #30 as previously recommended by Dr. #30 as previously recommended by Dr. Brook Edmonds with reasonable and Brook Edmonds with reasonable and necessary follow-up care by Dr. Edmonds.necessary follow-up care by Dr. Edmonds.

That the respondent is ordered to provide an That the respondent is ordered to provide an implant of TOOTH #30 by oral surgeon, Dr. implant of TOOTH #30 by oral surgeon, Dr. Ron Graves, as recommended by Dr. Ron Graves, as recommended by Dr. Edmonds.Edmonds.

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Summers v. Zurich AmericanSummers v. Zurich AmericanForm 13 RequestForm 13 Request

8/30/08/30/077

““Discuss respondents continued Discuss respondents continued failure to pay court order [sic] dated failure to pay court order [sic] dated 5/3/07 and 7/25/07; request additional 5/3/07 and 7/25/07; request additional penalties and interest.” penalties and interest.”

5/3/07 and 7/25/07 WCC Orders were for 5/3/07 and 7/25/07 WCC Orders were for specific monetary benefits: mileage, specific monetary benefits: mileage,

penalty, and to send all checks to penalty, and to send all checks to claimant’s attorney. . .claimant’s attorney. . .

RESPONDENT PAID THESE BEFORE RESPONDENT PAID THESE BEFORE HEARINGHEARING

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October 16, 2007October 16, 2007 On Form 13 Request for specific monetary On Form 13 Request for specific monetary

benefits that Respondent paid prior to hearing.benefits that Respondent paid prior to hearing. Resulted in “Agreed Order”Resulted in “Agreed Order”

– Recites prior orders for non-monetary benefits of Recites prior orders for non-monetary benefits of “reasonable and necessary medical treatment” (¶2-“reasonable and necessary medical treatment” (¶2-¶3)¶3)

– Authorizes Authorizes specificspecific medical treatment to continue medical treatment to continue (¶4)(¶4)

– Orders respondent shall pay for Orders respondent shall pay for specificspecific medical medical treatment already provided and mileage (¶5 - ¶6)treatment already provided and mileage (¶5 - ¶6)

– Directs respondent to “take all reasonable measures Directs respondent to “take all reasonable measures to facilitate claimant’s treatment as set out herein to facilitate claimant’s treatment as set out herein within 30 days”within 30 days”

Summers v. Zurich Summers v. Zurich AmericanAmerican

“The Certification Order”“The Certification Order”

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Summers v. Zurich AmericanSummers v. Zurich AmericanThe Bad Faith CaseThe Bad Faith Case

Bad Faith petition filed November 17, Bad Faith petition filed November 17, 2007.2007.

Insurer moved for summary judgment Insurer moved for summary judgment based on based on Sizemore v. Continental Cas. Sizemore v. Continental Cas. Co.Co., 2006 OK 36, 142 P.3d 47., 2006 OK 36, 142 P.3d 47.

– ““A claimant seeking to enforce an award must A claimant seeking to enforce an award must first utilize the mechanism provided in section first utilize the mechanism provided in section 42(A) of the [Workers Compensation] Act and 42(A) of the [Workers Compensation] Act and have the award certified for enforcement.”have the award certified for enforcement.”

1111


Plaintiff argued that Plaintiff argued that

– (1) certification not required due to order (1) certification not required due to order denying rehearing in denying rehearing in SizemoreSizemore, which held , which held that a claimant does not have to seek that a claimant does not have to seek enforcement of a certified award in district enforcement of a certified award in district court before filing a bad faith action.court before filing a bad faith action.

– (2) certification not required with a failure (2) certification not required with a failure to provide to provide non-monetary non-monetary medical medical treatment.treatment.

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District Court granted summary judgment District Court granted summary judgment but said but said SizemoreSizemore was not clear. was not clear.

Court of Civil Appeals affirmed summary Court of Civil Appeals affirmed summary judgment but said judgment but said Sizemore Sizemore was not was not clear.clear.

Oklahoma Supreme Court vacated Court Oklahoma Supreme Court vacated Court of Civil Appeals, reversed District Court of Civil Appeals, reversed District Court summary judgment, and remanded.summary judgment, and remanded.

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Summers v. Zurich AmericanSummers v. Zurich AmericanThe OpinionThe Opinion

Holding # 1:Holding # 1:

Certification of a prior WCC Certification of a prior WCC award IS REQUIRED as a pre-award IS REQUIRED as a pre-requisite to any bad faith action.requisite to any bad faith action.

DiscussionDiscussion:: Proper procedure for having an award Proper procedure for having an award

certified as unpaid under WCC certified as unpaid under WCC Rule 58.Rule 58.

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Holding # 2:Holding # 2:

WCC’s 10/16/07 Order was WCC’s 10/16/07 Order was thethe “functional equivalent” “functional equivalent” of aof a certification certification order.order.

DiscussionDiscussion:: Order “demonstrating that medical Order “demonstrating that medical treatment repeatedly ordered by treatment repeatedly ordered by

that that Court had not been satisfied.”Court had not been satisfied.”

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Petition for Rehearing (6/15/09)Petition for Rehearing (6/15/09)– No facts in the record demonstrating:No facts in the record demonstrating:

Good cause or lack of good cause was at issueGood cause or lack of good cause was at issue Notice of a certification hearing was givenNotice of a certification hearing was given

– Bad Faith claims cannot be premised on failure Bad Faith claims cannot be premised on failure to provide non-monetary medical treatment in to provide non-monetary medical treatment in the form of pre-certification.the form of pre-certification.

Rehearing Denied (6/22/09)Rehearing Denied (6/22/09)

Mandate Issued (7/23/09)Mandate Issued (7/23/09)


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““There is no doubt that at the very There is no doubt that at the very least a fact issue exists as to whether least a fact issue exists as to whether Insurer has complied with orders of Insurer has complied with orders of the Workers Compensation Court.”the Workers Compensation Court.”

Whether Insurer has “any Whether Insurer has “any justification for its alleged failure to justification for its alleged failure to provide all the medical treatment provide all the medical treatment ordered by the Workers’ ordered by the Workers’ Compensation Court.”Compensation Court.”

Summers v. Zurich AmericanSummers v. Zurich AmericanIssues On Remand:Issues On Remand:

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SECTION II:SECTION II:“Functional Equivalence”:“Functional Equivalence”:

(1) (1) When does the “functional When does the “functional equivalent”equivalent” of a certification order of a certification order occur?occur?

(2)(2) How does a respondent/insurer How does a respondent/insurer prevent a “functionally prevent a “functionally

equivalent” equivalent” order from occurring?order from occurring?

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The Functional Equivalent The Functional Equivalent Of A Certification OrderOf A Certification Order

What Is What Is NotNot Required: Required:

No notice of a show cause hearingNo notice of a show cause hearing No Rule 58 motionNo Rule 58 motion No evidence or argument at a hearing No evidence or argument at a hearing

concerning cause for non-payment or concerning cause for non-payment or non-provision of benefits.non-provision of benefits.

No mention of “certification” or “good No mention of “certification” or “good cause”cause”

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The Functional Equivalent The Functional Equivalent Of A Certification OrderOf A Certification Order

The Hallmarks of A The Hallmarks of A

““Functionally Equivalent” Order:Functionally Equivalent” Order:

Existence of one or more Existence of one or more priorprior orders awarding orders awarding benefits or authorizing treatment that benefits or authorizing treatment that appearappear to to involve the same monetary benefits, body parts, or involve the same monetary benefits, body parts, or medical visits as discussed in order claimed to be medical visits as discussed in order claimed to be

“functionally equivalent.”“functionally equivalent.” Order recites prior order(s) awarding benefits or Order recites prior order(s) awarding benefits or

authorizing treatment, then repeats or contains a authorizing treatment, then repeats or contains a more specific order.more specific order.

2020

Example:Example:The “Functionally Equivalent” The “Functionally Equivalent”

Order in Order in SummersSummers::

¶1 - 2: “THAT on May 9, 2005 an order was entered ¶1 - 2: “THAT on May 9, 2005 an order was entered . . . THAT . . . directed the respondent to . . . THAT . . . directed the respondent to provide the claimant with reasonable and provide the claimant with reasonable and necessary medical treatment by Dr. Douglas necessary medical treatment by Dr. Douglas Kaplan and Dr. John Munneke, including any Kaplan and Dr. John Munneke, including any necessary referral to Dr. David Johnsen.”necessary referral to Dr. David Johnsen.”

* * ** * *

¶4:¶4: “THAT Dr. Kaplan, M.D. is authorized to “THAT Dr. Kaplan, M.D. is authorized to perform treatment set out in his report of perform treatment set out in his report of April 3, 2007 . . . Dr. John Munneke, M.D. is April 3, 2007 . . . Dr. John Munneke, M.D. is authorized to continue with examinations authorized to continue with examinations and recommendations.”and recommendations.”

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Red Flags When A Red Flags When A “Functionally Equivalent” “Functionally Equivalent” Order May Issue Without Order May Issue Without

Notice:Notice: Whenever a disagreement or dispute arises

concerning the scope or nature of medical treatment to be given following an order authorizing “reasonable and necessary” care.

Repeated requests by medical providers for pre-certification by insurer for treatment not specifically authorized but which might be argued to be “reasonable and necessary.”

2222

How To Prevent TheHow To Prevent The “Functionally Equivalent” “Functionally Equivalent”

OrderOrder Pre-certify all treatment when requested, Pre-certify all treatment when requested,

regardless of merit?regardless of merit?That’s one way … but unrealisticThat’s one way … but unrealistic

Request clarification from WCC in Request clarification from WCC in everyevery order authorizing or directing “reasonable order authorizing or directing “reasonable and necessary” medical treatment as to and necessary” medical treatment as to what is “reasonable and necessary”what is “reasonable and necessary”

Request language in Request language in everyevery order order authorizing benefits that the order is authorizing benefits that the order is notnot a a certification of any failure to provide certification of any failure to provide previously awarded benefits.previously awarded benefits.

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How To Prevent TheHow To Prevent The “Functionally Equivalent” “Functionally Equivalent”

OrderOrder If clarification language is refused, request If clarification language is refused, request

continuance in order to present evidence of continuance in order to present evidence of benefits provided and justification for prior benefits provided and justification for prior decisions by respondent / insurer.decisions by respondent / insurer.

Request immediate clarification from WCC if a Request immediate clarification from WCC if a disagreement arises as to what is “reasonable and disagreement arises as to what is “reasonable and necessary” treatment . . . don’t wait for claimants necessary” treatment . . . don’t wait for claimants to return.to return.

Request written stipulation from claimant’s Request written stipulation from claimant’s counsel that certification is not being requested counsel that certification is not being requested prior to hearing.prior to hearing.

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SECTION III:SECTION III:“Bad Faith Failure “Bad Faith Failure

to Provide Medical Treatment”to Provide Medical Treatment”

(1) (1) What conduct with respect to the What conduct with respect to the provision of non-monetary medical provision of non-monetary medical benefits can give rise to a bad faith benefits can give rise to a bad faith claim?claim?

(2)(2) How does a respondent/insurer How does a respondent/insurer prevent a bad faith allegation arising prevent a bad faith allegation arising from failure to pre-certify medical from failure to pre-certify medical care?care?

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““Bad Faith Failure Bad Faith Failure to Provide Medical Treatment”to Provide Medical Treatment”

THE ISSUETHE ISSUE

• Respondents do not “provide” medical care

Respondents are not the doctors, nurses, therapists . . . other providers

Respondents do not pick up the claimants, or force them to get treatment

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THE ISSUETHE ISSUE

• Respondents do not “provide” medical care

Respondents are not the doctors, nurses, therapists . . . other providers

Respondents do not pick up the claimants, or force them to get treatment

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THE ISSUETHE ISSUE

• Insurers agree to pay monetary benefits

to insure against expenses resulting from injuries compensable through WC system

no agreement to pre-certify treatment when requested

no requirement of pre-certification before medical treatment given

Insurers not set up for timely pre-certification of all medical treatment

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THE ISSUETHE ISSUE• The basis of bad faith law in Oklahoma since 1977

has always been failure to pay.See Skinner v. John Deere Ins. Co., 2000 OK 18, ¶ 16, 998 P.2d 1219, 1223 (“tort liability arises only where there is a clear showing that the insurer unreasonably, and in bad faith, withholds payment of the claim of its insured”)(emphasis added); Sizemore v. Cont’l Cas. Co., 2006 OK 36, ¶ 26, 142 P.3d 47, 54 (common law tort action exists against an insurance carrier for failure to pay workers’ compensation award); Fehring v. State Ins. Fund, 2001 OK 11, ¶ 26, 19 P.3d 276, 284 (discussing potential liability of workers’ compensation insurer for failure to timely pay a workers’ compensation award); Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 2000 OK 55, ¶ 51, 11 P.3d 162, 180-81 (discussing the availability of attorney’s fees for bad faith refusal to pay against an insurer); Newport v. USAA, 2000 OK 59, ¶¶ 12-24, 11 P.3d 190, 196-97 (issue of bad faith against insurer for making “low ball” offers for payment was for jury to decide); . . . Christian v. Am. Home Assur. Co., 1977 OK 141, 577 P.2d 899 (reversing summary judgment for insurer and remanding for further proceedings on a bad faith failure to pay claim).

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What Conduct Can Constitute “Bad What Conduct Can Constitute “Bad Faith Failure To Provide Medical Faith Failure To Provide Medical

Treatment”Treatment” OBVIOUSOBVIOUS

Failure to pay for specifically ordered Failure to pay for specifically ordered treatment after it has been given and treatment after it has been given and payment has been requestedpayment has been requested

unless legitimate dispute about scope of unless legitimate dispute about scope of order exists and insurer is taking action to order exists and insurer is taking action to resolve.resolve.

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What Conduct Can Constitute “Bad What Conduct Can Constitute “Bad Faith Failure To Provide Medical Faith Failure To Provide Medical

Treatment”Treatment” ARGUABLEARGUABLE

Failure to pre-certify (guarantee payment for) Failure to pre-certify (guarantee payment for) specifically ordered treatment specifically ordered treatment beforebefore it is given it is given when requested by provider.when requested by provider.

Failure to pre-certify specific medical treatment Failure to pre-certify specific medical treatment after “reasonable and necessary” treatment has after “reasonable and necessary” treatment has been authorized, been authorized, ifif insurer knows/believes that insurer knows/believes that the specific medical treatment for which pre-the specific medical treatment for which pre-certification requested is “reasonable and certification requested is “reasonable and necessary.”necessary.”

Failure to pre-certify uncertain scope of treatment Failure to pre-certify uncertain scope of treatment after “reasonable and necessary” treatment has after “reasonable and necessary” treatment has been authorized, been authorized, ifif insurer knows/believes that insurer knows/believes that the medical treatment to be given will be the medical treatment to be given will be “reasonable and necessary.”“reasonable and necessary.”

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How To Prevent Bad Faith Claims How To Prevent Bad Faith Claims Arising From Requests For Pre-Arising From Requests For Pre-

CertificationCertificationOptions On Two Ends of Spectrum:Options On Two Ends of Spectrum:

Pre-certify Pre-certify allall treatment when requested, treatment when requested, regardless of merit?regardless of merit?

That’s one way … but unrealisticThat’s one way … but unrealistic

Refuse Refuse allall pre-certification requests, but let pre-certification requests, but let providers know (i) when specific treatment has providers know (i) when specific treatment has been ordered and that payment will be made been ordered and that payment will be made once given and payment requested; (ii) all once given and payment requested; (ii) all “reasonable and necessary” medical treatment “reasonable and necessary” medical treatment will be paid once given and payment requested?will be paid once given and payment requested?

Demonstrates nothing awarded is actually being Demonstrates nothing awarded is actually being refused.refused.

A Solution? Why not pre-authorize treatment if A Solution? Why not pre-authorize treatment if obviously legitimate?obviously legitimate?

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CertificationCertificationOptions in Middle Ground:Options in Middle Ground:

Pre-certify specifically ordered treatment.Pre-certify specifically ordered treatment.

Pre-certify specific treatment when requested if Pre-certify specific treatment when requested if legitimate belief exists that treatment is legitimate belief exists that treatment is “reasonable and necessary”“reasonable and necessary”

If “reasonableness and necessity” of specific If “reasonableness and necessity” of specific treatment for which pre-certification has been treatment for which pre-certification has been requested are legitimately questioned, then let requested are legitimately questioned, then let provider know, in writing, that pre-certification of provider know, in writing, that pre-certification of specific treatment cannot be given because of specific treatment cannot be given because of legitimate questions about proposed treatment legitimate questions about proposed treatment but that if treatment once provided is determined but that if treatment once provided is determined to be “reasonable and necessary” after further to be “reasonable and necessary” after further investigation, then payment will be made.investigation, then payment will be made.

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If “reasonableness and necessity” of If “reasonableness and necessity” of proposed treatment proposed treatment withoutwithout definite definite boundaries (i.e., start and end dates, clearly boundaries (i.e., start and end dates, clearly defined scope, etc.) are legitimately defined scope, etc.) are legitimately questioned, then let providers know, in questioned, then let providers know, in writing, that treatment cannot be pre-writing, that treatment cannot be pre-certified because of questions about scope, certified because of questions about scope, necessity and reasonableness, but that if necessity and reasonableness, but that if treatment once provided is determined to be treatment once provided is determined to be “reasonable and necessary” after “reasonable and necessary” after investigation, then payment will be made.investigation, then payment will be made.

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Request hearing with WCC regarding Request hearing with WCC regarding requests for pre-certification requests for pre-certification

Discuss with WCC difficulty posed by Discuss with WCC difficulty posed by pre-certification requests for pre-certification requests for undefined treatment.undefined treatment.

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SECTION IV:SECTION IV:“A Reasonable Inference Arises . . “A Reasonable Inference Arises . .

.”.”(1)(1) What is the reasonable inference What is the reasonable inference

that arises from a certification order?that arises from a certification order?

(2)(2) Does the same inference arise from Does the same inference arise from a “functionally equivalent” order?a “functionally equivalent” order?

(3)(3) What can plaintiffs do with the What can plaintiffs do with the reasonable inference?reasonable inference?

(4)(4) How does a defendant overcome it?How does a defendant overcome it?

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The “Reasonable Inference” The “Reasonable Inference” fromfrom

Summers v. Zurich AmericanSummers v. Zurich American¶ 14

“The purpose of Sizemore’s certification requirement is twofold. First, it is the legislatively provided incentive for prompt payment of claims for monetary benefits within workers’ compensation, independent of any bad faith claim. Second, the Rule 58 certification hearing by the Workers’ Compensation Court provides the insurer the opportunity to show good cause as to why a final award of benefits remains unfulfilled. When an insurer has failed to provide court-ordered benefits and cannot demonstrate good cause for doing so, a reasonable inference arises that the reason for the failure to obey the award involves a refusal to comply, not mere negligence.”

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What Does The “Reasonable What Does The “Reasonable Inference” of a “Refusal To Inference” of a “Refusal To

Comply” Mean?Comply” Mean? ““Not mere negligence” = permissible Not mere negligence” = permissible

inference that insurer’s failure resulted inference that insurer’s failure resulted from bad faith.from bad faith.– Badillo v. Mid-Century:Badillo v. Mid-Century: “In our view, under “In our view, under

ChristianChristian and later cases, the minimum level of and later cases, the minimum level of culpability necessary for liability against an culpability necessary for liability against an insurer to attach is more than simple insurer to attach is more than simple negligence, but less than the reckless conduct negligence, but less than the reckless conduct necessary to sanction a punitive damage award necessary to sanction a punitive damage award against said insurer.”against said insurer.”

No summary adjudication that failure was No summary adjudication that failure was merely negligent.merely negligent.

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Arises From Rule 58 HearingArises From Rule 58 Hearing

In In SummersSummers, discussion of reasonable , discussion of reasonable inference comes within context of inference comes within context of discussing Rule 58 certification hearing.discussing Rule 58 certification hearing.

To create “inference” (i.e., rebuttable To create “inference” (i.e., rebuttable presumption), insurer must have an presumption), insurer must have an opportunity to show cause why a final opportunity to show cause why a final award of benefits remains unfulfilled.award of benefits remains unfulfilled.

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Does The Inference Arise From Does The Inference Arise From A “Functionally Equivalent” A “Functionally Equivalent”

Order?Order?YES ArgumentsYES Arguments

– ““Functional Equivalence” means just thatFunctional Equivalence” means just that

– The Oklahoma Supreme Court did not The Oklahoma Supreme Court did not distinguish between the two types of distinguish between the two types of Orders, so there is no reason for a Orders, so there is no reason for a district court to distinguish between the district court to distinguish between the two types of Orders.two types of Orders.

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Does The Inference Arise From Does The Inference Arise From A “Functionally Equivalent” A “Functionally Equivalent”

Order?Order?NO ArgumentsNO Arguments

– In In SummersSummers, discussion of reasonable inference , discussion of reasonable inference comes within context of discussing Rule 58 comes within context of discussing Rule 58 certification hearing.certification hearing.

– In In Summers, Summers, Supreme Court found “functional Supreme Court found “functional equivalence” but noted “at the very least a fact equivalence” but noted “at the very least a fact issue exists as to whether Insurer has complied issue exists as to whether Insurer has complied with orders of the [WCC]”with orders of the [WCC]”

– To create “inference” (i.e., rebuttable To create “inference” (i.e., rebuttable presumption), insurer must have an opportunity presumption), insurer must have an opportunity to show cause why a final award of benefits to show cause why a final award of benefits remains unfulfilled.remains unfulfilled.

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What Does Plaintiff Do With What Does Plaintiff Do With Reasonable Inference?Reasonable Inference?

Oppose Motions for Summary JudgmentOppose Motions for Summary Judgment

Request Jury Instruction on effect of Request Jury Instruction on effect of Certification Order from WCC?Certification Order from WCC?

Move for summary adjudication on elements Move for summary adjudication on elements of failure to provide benefits and bad faith? of failure to provide benefits and bad faith? – Damages trial only? Damages trial only? – Argue insurer has no evidence to rebut inference?Argue insurer has no evidence to rebut inference?

4242

How Does Defendant How Does Defendant Overcome Reasonable Overcome Reasonable

Inference?Inference? Insurer must present evidence of legitimate Insurer must present evidence of legitimate

disagreement over whether benefits were disagreement over whether benefits were owed (or required to be provided) and owed (or required to be provided) and efforts to reasonably resolve issue.efforts to reasonably resolve issue.

Insurer should challenge correctness of Insurer should challenge correctness of WCC Certification Order in order to maintain WCC Certification Order in order to maintain appellate issue – no concession that “good appellate issue – no concession that “good cause” did not exist.cause” did not exist.

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OTHER ISSUESOTHER ISSUES

What happens when WCC case What happens when WCC case continues while bad faith litigation is continues while bad faith litigation is pending?pending?– Post-certification conduct?Post-certification conduct?– Global settlement issuesGlobal settlement issues– Can post-bad-faith-action orders in WCC Can post-bad-faith-action orders in WCC

affect bad faith action?affect bad faith action? Privilege IssuesPrivilege Issues Reserve discovery in ongoing WCC caseReserve discovery in ongoing WCC case

WORKERS COMPENSATION WORKERS COMPENSATION BAD FAITH LITIGATION BAD FAITH LITIGATION

IN THE WAKE OF IN THE WAKE OF SUMMERS v. ZURICH AMERICANSUMMERS v. ZURICH AMERICAN

Presented By: Bryan N.B. KingBrooks A. RichardsonFellers, Snider, Blankenship, Bailey & Tippens100 N. Broadway, Suite 1700Oklahoma City, Oklahoma 73102(405) 232-0621

Documents

WORKERS COMPENSATION BAD FAITH LITIGATION IN THE WAKE OF SUMMERS v. ZURICH AMERICAN