Coleman v. State Farm Fire and Casualty Company
OPINION AND ORDER by Judge Claire V Eagan - Defendant's motion for summary judgment (Dkt. # 37) is denied in part and granted in part. Defendant's motion is denied as to plaintiff's breach of contract claim, but granted as to plaintiff's bad faith claim and the issue of punitive damages. ; granting in part and denying in part 37 Motion for Summary Judgment (Re: State Court Petition/Complaint, 37 MOTION for Summary Judgment ) (RGG, Chambers)
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UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
STATE FARM FIRE AND CASUALTY,
Case No. 21-CV-0430-CVE-JFJ
OPINION AND ORDER
Before the Court is defendant’s motion for summary judgment (Dkt. # 37), plaintiff’s
response (Dkt. # 54), and defendant’s reply (Dkt. # 58). The case arises from an insurance claim
dispute regarding the extent of and coverage for fire and smoke damage to plaintiff’s personal
property. Dkt. # 2-1. On September 7, 2021, plaintiff Rachel Coleman filed a petition in the District
Court of Tulsa County, Oklahoma (Dkt. # 2-1) against defendant State Farm Fire and Casualty
Company (State Farm) alleging breach of contract and tortious failure to render good faith and fair
dealings (bad faith). Id. at 2-3. Plaintiff seeks actual damages based on defendant’s alleged
breaches, id. at 3-4, and alleged entitlement to punitive damages for bad faith. Dkt. # 37, at 6. On
October 6, 2021, defendant removed this case to federal court because the amount in controversy
exceeds $75,000 and the parties are “residents and citizens of different states.” Dkt. # 2, at 2.
Defendant State Farm now moves, pursuant to Fed. R. Civ. P. 56, for summary judgment on
plaintiff’s breach of contract claim, bad faith claim, and the issue of punitive damages. Dkt. # 37.
Defendant argues that there is a legitimate dispute as to the plaintiff’s demand for the replacement
cost value of the entire contents of her home. Dkt. # 37. Plaintiff responds that she followed the
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instructions given to her by State Farm employees and, as a result, State Farm refuses to compensate
her for the loss under her policy. Dkt. # 54, at 2-3.
The following facts are not in dispute: on October 25, 2020, “an attic fire/smoldering event”
occurred at plaintiff’s home. Dkt. # 37, at 9; Dkt. # 54, at 3. At the time, plaintiff’s property was
insured under State Farm policy number 36-B5-V014-7. Dkt. # 37, at 6; Dkt. # 54, at 3. Plaintiff’s
policy “provided [d]welling [c]overage with a [p]olicy [l]imit of $157,600, . . . covered loss of
personal property with a limit of $118,200,” and “[l]oss of [u]se [c]overage” with a limit of $47,280.
Dkt. # 37, at 6-7, 8; Dkt. # 54, at 3. Plaintiff’s coverages “were subject to a $1,576 deductible.”
Dkt. # 37, at 8; Dkt. # 54, at 3. The personal property coverage at issue in this case applies “for
accidental direct physical loss to the property . . . caused by the following perils . . . fire or lightning
. . . , smoke.” Dkt. # 37, at 7; Dkt. # 54, at 3. As to the settlement of losses to personal property, the
COVERAGE B – PERSONAL PROPERTY
1. B1 – Limited Replacement Cost Loss Settlement
a. We will pay the cost to repair or replace property covered under SECTION
I – PROPERTY COVERAGES, COVERAGE B – PERSONAL
PROPERTY, except for property listed in item b. below, subject to the
(1) until repair or replacement is completed, we will pay only the
actual cash value of the damaged property;
(2) after repair or replacement is completed, we will pay the
difference between the actual cash value and the cost you have
actually and necessarily spent to repair or replace the property;
(3) if property is not repaired or replaced within two years of the date
of the loss, we will pay only the actual cash value.
Dkt. # 37, at 7; Dkt. # 54, at 3. The policy also “contained conditions for coverage specific to
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Section I – Conditions
2. Your Duties After Loss. After a loss to which this insurance may apply, you must
cooperate with us in the investigation of the claim and also see that the following
duties are performed:
protect the property from further damage or loss and also:
(1) make reasonable and necessary temporary repairs required to
protect the property; and
(2) keep an accurate record of repair expenses;
prepare an inventory of damaged or stolen personal property:
(1) showing in detail the quantity, description, age, replacement cost,
and amount of loss; and
(2) attaching all bills, receipts, and related documents that
substantiate the figures in the inventory;
as often as we reasonably require:
(1) exhibit the damaged property;
(2) provide us with any requested records and documents and allow
us to make copies.
Dkt. # 37, at 4-5; Dkt. # 54, at 3.
Plaintiff was not home when the fire started, and “[w]hen she returned home, the home was
filled with smoke.” Dkt. # 37, at 9; Dkt. # 54, at 4. On October 27, 2020, two days after the fire,
plaintiff reported the loss to State Farm. Dkt. # 37, at 9; Dkt. # 54, at 4. Plaintiff reported that “the
fire department determined the fire started in the attic as the result of old electrical wires.” Dkt. #
37, at 9; Dkt. # 54, at 4. Plaintiff “reported damage to the attic beams, siding, roof, HVAC system,
and miscellaneous personal property.” Dkt. # 37, at 9; Dkt. # 54, at 4.
On October 28, 2020, State Farm claims representative Jerome Abbage was assigned to
plaintiff’s claim. Dkt. # 37, at 9; Dkt. # 54, at 4. That day, Abbage called plaintiff “to collect
additional facts related to the loss and left [p]laintiff a voicemail requesting a return call.” Dkt. #
37, at 9; Dkt. # 54, at 4. Abbage also hired an “[o]rigin and [c]ause [i]nvestigator to inspect the
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loss.” Dkt. # 37, at 9; Dkt. # 37-3, at 16. On October 29, 2020, State Farm claim specialist Heather
Stanley “scheduled an inspection of the loss with [p]laintiff for November 2, 2020,” and the origin
and cause inspection was scheduled for the same time. Dkt. # 37, at 9; Dkt. # 54, at 4.
On November 2, 2020, Stanley and the origin and cause investigator inspected plaintiff’s
home. Dkt. # 37, at 10; Dkt. # 54, at 4. The origin and cause investigator “found that the fire started
from wiring in a ceiling light and likely smoldered for hours.” Dkt. # 37, at 10; Dkt. # 54, at 4.
Stanley reported “framing damages . . . to [five] ceiling joints from back to front,” which required
removing ceilings in multiples rooms and part of the hall. Dkt. # 37, at 10; Dkt. # 54, at 4. She also
noted damage to a number of parts of the attic, that the “furnace should be replaced and floor ducts
cleaned,” that the “interior will all clean with PNT to WC,” and that further inspection into reported
leaking from the roof would occur after the ceilings are down. Dkt. # 37, at 10; Dkt. # 54, at 4.
Stanley “advised [p]laintiff the estimated repair time of the home was approximately three 
months.” Dkt. # 37, at 10; Dkt. # 54, at 4.
Based on her findings, Stanley “approved FRSTeam to collect [p]laintiff’s textiles and
electronics for cleaning” and also “approved ESR to do the pack out and cleaning of [p]laintiff’s
personal property.” Dkt. # 37, at 10; Dkt. # 54, at 4. “At the same time,” Stanley “advanced $500
to [p]laintiff in personal property coverage” after plaintiff told her that she “spent approximately
[six] hours packing and moving her personal property in her home.” Dkt. # 37, at 10; Dkt. # 54, at
4. Also on November 2, 2020, Abbage “discussed personal contents with [p]laintiff” and “[p]laintiff
agreed to create a list of items for replacement.” Dkt. # 37, at 10; Dkt. # 54, at 4. During her
deposition, plaintiff testified that “Abbage told her she only needed to take photographs of damaged
personal property items valued over $800” and that she discarded the contents at Abbage’s direction,
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“who advised her to throw any items away that were worth less than $1,000.” Dkt. # 37, at 19; Dkt.
# 54, at 6. Plaintiff also testified that Stanley “told [plaintiff] to throw things away-specifically that
she told [plaintiff] to throw away every single food item, medicine, body product, beauty product,
and makeup item.” Dkt. # 37, at 19; Dkt. # 54, at 6.
On November 12, 2020, “FRSTeam notified State Farm [that] [p]laintiff declined
FRSTeam’s first attempt to collect the textile and electronics because [p]laintiff had a funeral to
attend. FRSTeam had since been unable to reach [p]laintiffs [sic] despite multiple attempts to call
her.” Dkt. # 37, at 11; Dkt. # 54, at 4. That day, “Abbage followed up with [p]laintiff” and plaintiff
“advised she would take care of all of the cleaning herself.” Dkt. # 37, at 11; Dkt. # 54, at 4. The
record shows that State Farm and plaintiff “had numerous communications” over several months
about “State Farm’s need for a contents list for items that needed cleaning or replacing” and that
plaintiff was working on the list. Dkt. # 37, at 11; Dkt. # 37-3, at 10, 12, 14.
In January, 2021, plaintiff submitted two sets of inventory documents.1 At issue in this case
is defendant’s denial of the “lost item list,” which contained “[twenty-two] pages of personal
property inventory totaling $121,074.37 [that plaintiff] claimed was lost in the fire.” Dkt. # 37, at
While defendant’s statement of undisputed material facts (Dkt. # 37, at 12) and plaintiff’s
response to defendant’s statement of undisputed material facts (Dkt. # 54, at 4) both state that
plaintiff’s “lost items list” (Dkt. # 28-1), was submitted on January 17, 2021, and plaintiff’s
“clean and restore list” (Dkt. # 28-2) was submitted on January 27, 2021, the record indicates
these dates may be reversed. State Farm’s claim file notes the “contents list” totaling
$121,074.37 (the “lost item list”) was received by State Farm on January 27, 2021 (Dkt. #
37-3, at 7-8), while plaintiff’s email dated January 17, 2021 appeared to submit the clean and
restore list, and included an attachment titled “Clean & Restore Spreadsheet - Jerome” (Dkt
# 37-3, at 37). The Court recognizes the facts as presented in the record and proceeds with
the understanding that the contents list totaling $121,074.37 was submitted to and received
by State Farm on January 27, 2021. Ultimately, which document was sent on which date has
no bearing on the Court’s conclusions on this motion.
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12; Dkt. # 54, at 4. Among the items in the list were “thousands of dollars worth of faux wedding
flowers, invitations, and décor” from plaintiff’s wedding the month before the fire. Dkt. # 37, at 12;
Dkt. # 54, at 4. On January 27, 2021, the day this list was noted in the claim file, Stanley noted that
“based on her walk through of the house, most of the contents in the house were cleanable.” Dkt.
# 37, at 12; Dkt. # 37-3, at 7-8.
On February 1, 2021, Abbage2 spoke with plaintiff about the claim via telephone. Dkt. # 27,
at 12; Dkt. # 54, at 4. Abbage noted that plaintiff said that “she threw all of the items on her [lost
items] list away.” Dkt. # 27, at 12; Dkt. # 54, at 4. Abbage noted that he asked plaintiff “if a
professional company came and evaluated these contents” prior to them being discarded and that
plaintiff said that “she had reached out to a couple of companies but had not heard back from them
aside from FRSTeam for the textiles.” Dkt. # 37-3, at 7. Abbage also noted that he asked plaintiff
if “she took photos of these items prior to throwing them away” plaintiff stated that she had photos
of “some of the items but not all of them.” Dkt. # 37-3, at 7.
On February 3, 2021, Abbage noted that he spoke “with Rudy at ESR” who “agreed that there
just wasn’t this many contents [from plaintiff’s lost list] inside the home.” Dkt. # 37-3, at 6-7. The
note also states that ESR was “under the impression that they were going to do all of the pack out,
cleaning, storage, etc [sic] but [plaintiff] decided that [she] would complete on [her] own.” Dkt. #
37-3, at 7.
While defendant’s statement of undisputed material facts (Dkt. # 37, at 12) and plaintiff’s
response to defendant’s statement of undisputed material facts (Dkt. # 54, at 4) both state that
this conversation occurred between plaintiff and Stanley, the record states that the
conversation was actually between plaintiff and Abbage. Dkt. # 37-3, at 7. The Court
recognizes the facts as presented in the record and proceeds with the understanding that this
conversation was between plaintiff and Abbage.
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On February 9, 2021, plaintiff “sent an email to  Abbage stating she sent photos of ‘some’
of the items on the inventory lists and that she took photos of items with value of more than $800$1000 ‘like you [Abbage] requested.’” Dkt. # 37, at 13; Dkt. # 54, at 4. On February 12, 2021,
Abbage noted in the claim file that he again spoke with plaintiff and “advised her that these items
[on her lost property list] would have needed to be evaluated by a professional company to decide
whether they could be cleaned or needed to be discarded but she made this decision on her own with
all of these items.” Dkt. # 37-3, at 6. He also noted that he advised plaintiff that he would “go
through and pay her for the contents that are reasonable for replcmnt [sic],” and that for “the other
items [he] will allow for some pack out time, cleaning, storage and then pay back only as [State
Farm] can’t eval[uate] the items now that they are discarded so nothing that can be done re those.”
Dkt. # 37-3, at 6. Plaintiff recorded the February 12, 2021, telephone conversation between herself
and Abbage. Dkt. # 37, at 16; Dkt. # 54, at 5.
Also on February 12, 2021, plaintiff “sent a list of items she wanted immediate
reimbursement for to replace and stated she had provided photos of ‘almost’ all of those items.” Dkt.
# 37, at 13; Dkt. # 54, at 4. This request included “roughly $3,400 in food replacement costs.” Dkt.
# 37, at 13; Dkt. # 54, at 4. On February 15, 2021, Abbage responded, “stating he would need the
ages on those items and would also likely need purchase receipts on the larger items.  Abbage
advised once he had ages on the items, he could tell [plaintiff] specifically what receipts” he would
need. Dkt. # 37, at 13; Dkt. # 54, at 4. Abbage also told plaintiff that “the amount being claimed
for food seemed extremely high and he would need some sort of documentation that that amount of
food was in the house at the time of the fire,” but in the meantime, he “would reimburse $500 for
food replacement.” Dkt. # 37, at 13; Dkt. # 54, at 4. Plaintiff responded that day “with the age of
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the items and an explanation of the food situation”; however, plaintiff did not provide any
“evidence supporting her explanation of the alleged $3,400 in food.” Dkt. # 37, at 14; Dkt. # 54, at
Following the February, 12, 2021, interactions, the facts presented in the parties’ briefs and
in the record turn to the defendant’s handling of the “clean & restore” portion of plaintiff’s claim,
which are not necessary to rule on the motion before the Court.
Summary judgment pursuant to Fed. R. Civ. P. 56 is appropriate where there is no genuine
dispute as to any material fact and the moving party is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 250 (1986); Kendall v. Watkins, 998 F.2d 848, 850 (10th Cir. 1993). “[A] party may file a
motion for summary judgment at any time until 30 days after the close of all discovery[,]” Fed. R.
Civ. P. 56(b), including before any discovery has been conducted. “Movants for summary judgment
bear the initial burden of demonstrating the absence of a genuine issue of material fact and
entitlement to judgment as a matter of law.” Silverstein v. Federal Bureau of Prisons, 559 F. App’x
739, 752 (10th Cir. 2014); see also Adler v. Wal–Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir.
1998). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986) (citations omitted). “The mere existence of a scintilla of
evidence in support of the plaintiff’s position will be insufficient; there must be evidence on which
the [trier of fact] could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. In essence,
the inquiry for the Court is “whether the evidence presents a sufficient disagreement to require
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submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
Id. at 250. In its review, the Court construes the record in the light most favorable to the party
opposing summary judgment. Garratt v. Walker, 164 F.3d 1249, 1251 (10th Cir. 1998).
Defendant State Farm moves for partial summary judgment on the following grounds:
Breach of Contract
State Farm paid a portion of plaintiff’s personal property coverage and “requested evidentiary
documentation” for the rest of plaintiff’s contents claim, “pursuant to [p]laintiff’s duties under her
[p]olicy,” but plaintiff “failed to provide such documentation.” Dkt. # 37, at 22. Therefore, State
Farm argues that it “has paid all that was owed to [p]laintiff under her [p]olicy” and is entitled to
summary judgment on plaintiff’s breach of contract claim. Dkt. # 37, at 22. Plaintiff alleges that
she followed Abbage and Stanley’s instructions for providing her inventory list as required under
her policy, and found it reasonable that their instruction to discard and not photograph or document
the smaller ticket items that composed most of her lost items list was “standard procedure.” Dkt.
# 54, at 2.
According to the Supreme Court of Oklahoma, parties to an insurance contract “are at liberty
to contract for insurance to cover such risks as they see fit and are bound by the terms of [the]
contract and courts will not undertake to rewrite the terms thereof.” Dodson v. St. Paul Ins. Co., 812
P.2d 372, 376 (Okla. 1991) (quoting Wiley v. Travelers Ins. Co., 534 P.2d 1293, 1295 (Okla. 1974)).
Moreover, “[t]he terms of the parties’ contract, if unambiguous, clear, and consistent, are accepted
in their plain and ordinary sense . . . . [Accordingly,] [t]he interpretation of an insurance contract
and whether it is ambiguous is a matter of law for the Court to determine and resolve accordingly.”
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Id. Finally, the Supreme Court of Oklahoma has found that the test for whether contract terms are
ambiguous is whether they are “susceptible to two interpretations on [their] face. This test for
ambiguity is applied from the standpoint of a reasonably prudent lay person, not from that of a
lawyer.” Cranfill v. Aetna Life Ins. Co., 49 P.3d 703, 706 (Okla. 2002) (internal quotations and
In this case, plaintiffs’ policy includes conditions, including the insured’s “duties after loss.”
Dkt. # 37-1, at 36. The policy states that the insured “must cooperate with [State Farm] in the
investigation of the claim. Id. It also requires that the insured “protect the property from further
damage or loss” and “keep an accurate record of repair expenses.” Id. In addition, the insured must
see that an “inventory of damaged . . . personal property” is prepared, “(1) showing in detail the
quantity, description, age, replacement cost, and amount of loss; and, (2) attaching all bills, receipts,
and related documents that substantiate the figures in the inventory.” Id. Finally, the insured has
a duty to “exhibit the damaged property” or “provide [State Farm] with any requested records and
documents” “as often as [State Farm] requires. Id.
The Court finds that State Farm’s policy language as to plaintiff’s duties after loss is
unambiguous, clear, and consistent. The conditions in the written policy require the insured to
cooperate with State Farm’s investigation of the claim, including by providing it with information
to substantiate the value of the claim and allow State Farm to examine the damaged property. The
Court finds that these specific policy conditions related to the insured’s duties following loss are not
subject to more than one meaning from a lay person’s perspective. See Cranfill, 49 P.3d at 706.
Thus, the Court accepts the policy terms in their plain and ordinary sense and plaintiff is bound by
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the terms of their insurance contract with respect to her duties following the loss. See Dodson, 534
P.2d at 376.
However, there is a genuine dispute of material fact as to whether State Farm representatives,
Abbage and Stanley, instructed plaintiff to discard her contents prior to preparing and submitting her
inventory list. According to plaintiff’s testimony, she prepared an inventory of the damaged items
as per the instructions of State Farm’s representatives. Plaintiff testified that shortly after the fire,
she specifically asked Abbage what she needed to do, whether she needed to take photos and, if so,
should the contents be photographed individually or grouped together. Dkt. # 37-4, at 2. She
testified that, in response, Abbage told her not to take photos of her items, specifically, that “if [the
smaller items were] under approximately $800" then “he didn’t need photos of it.” Id., at 2-3.
Plaintiff also testified that “[Abbage] directed me not to take photos and to throw things away”. Id.
at 10. In addition, plaintiff testified that Stanley instructed her to “[t]hrow away every single food
item, every single medicine, every single body product, beauty product, makeup, because it’s all
toxic. Needs to go in the trash.” Id. at 11. Given the context and circumstances, a jury could
reasonably find that in following these alleged instructions, plaintiff complied with the conditions
of the policy.
If State Farm instructed plaintiff to discard the contents without photographing them, and
then later denied the remainder of her claim due to the lack of photographs to corroborate the claim,
then a trier of fact could find that denial to constitute a breach of contract. This is especially likely
for many of the smaller items such as toiletries or makeup, etc., because there would not be
reasonably accessible alternative corroborating documents such as copies of purchase receipts or
invoices. The Court notes that even if a jury were to find that the facts amount to a breach of
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contract, that conclusion does not address damages. The parties would still have to demonstrate
what, if any, damages plaintiff suffered as a result of such a breach.
At this summary judgment stage the evidence in the record is construed most favorably to
the non-movant, in this case the plaintiff. Garratt, 164 F.3d at 1251. The details about documenting
and cataloguing the lost items, including whether State Farm’s representatives advised plaintiff to
discard her items without securing evidentiary documentation, are questions for the jury to
determine. Therefore, the Court denies defendant’s motion for summary judgment as to plaintiff’s
breach of contract claim.
Defendant argues that plaintiff’s bad faith claim fails as a matter of law. Dkt. # 37, at 23.
First, defendant argues that plaintiff’s bad faith claim fails because her breach of contract claim fails.
Dkt. # 37, at 23. Because the Court finds that plaintiff’s breach of contract claim does not fail, it
does not address that part of defendant’s brief. However, defendant also argues that “[e]ven if” it
breached its contract with plaintiff, the bad faith claim still fails because there is a “legitimate dispute
as to the value of [p]laintiff’s content claim,” and there is “simply no evidence whatsoever to support
[p]laintiff’s claim of bad faith based on State Farm’s investigation and evaluation.” Id. at 25.
Plaintiff argues that “State Farm denied the list in its entirety without any investigation, research of
replacement value or discussion as to any description of an item, the accuracy of the list, or any offer
of a proposed value for [plaintiff’s] personal content.” Dkt. # 54, at 3.
The Oklahoma Supreme Court has held that “an insurer has an implied duty to deal fairly and
act in good faith with its insured and that the violation of this duty gives rise to an action in tort for
which consequential and, in a proper case, punitive, damages may be sought.” Christian v. Am.
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Home. Assurance Co., 577 P.2d 899, 904 (Okla. 1977). “The core of a bad-faith claim ‘is the
insurer’s unreasonable, bad-faith conduct, including the unjustified withholding of payment due
under a policy.’” Flores v. Monumental Life Ins. Co., 620 F.3d 1248, 1255 (10th Cir. 2010) (quoting
McCorkle v. Great Atl. Ins. Co., 637 P.2d 583, 587 (Okla. 1981)). To succeed on a bad faith claim,
plaintiff “must present evidence from which a reasonable jury could conclude that the insurer did
not have a reasonable good faith belief for withholding payment of [plaintiff’s] claim.” Oulds v.
Principal Mut. Life Ins. Co., 6 F.3d 1431, 1436 (10th Cir. 1993); accord Shotts v. GEICO Gen. Ins.
Co., 943 F.3d 1304, 1314 (10th Cir. 2019). According to the Tenth Circuit, courts generally use a
two-step analysis to determine whether a plaintiff has made a sufficient showing of bad faith. Shotts,
943 F.3d at 1314-15. The Court considers 1) “whether there is a legitimate dispute between the
insurer and the insured regarding coverage or the value of the claim”; and 2) “if the court determines
there is a legitimate dispute between the parties, . . . whether the plaintiff offered specific additional
evidence to demonstrate bad faith.” Id. at 1315. “The additional evidence required for this showing”
may include evidence that 1) “the insurer did not actually rely on th[e] legitimate [dispute] to deny
coverage”; 2) the insurer “denied the claim for an illegitimate reason”; 3) the insurer “otherwise
failed to treat the insured fairly”; and 4) “the insured performed an inadequate investigation of the
claim.” Id. (internal quotations and citations omitted) (emphasis and alterations in Shotts, 943 F.3d
For step one, the Court finds that there exists a legitimate dispute between plaintiff and
defendant regarding coverage and the total value of the claim. Defendant State Farm sent a specialist
to inspect plaintiff’s dwelling damage, who created an estimated replacement cost value for repairs
and also saw the condition of plaintiff’s home and at least some of its contents. Abbage, another
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representative who was assigned to handle plaintiff’s claim, discussed the content process with
plaintiff. Rather than using a professional company to pack and determine what items were and were
not salvageable, plaintiff decided to handle that process herself, and then cleaned most of the
salvageable content herself. State Farm then reviewed the information provided by plaintiff about
the items that were not salvageable and consistently questioned its validity and accuracy compared
to its understanding of the damage caused by the fire. Thus, there is a legitimate dispute as to the
extent and valuation of damage to plaintiff’s contents.
For step two, the Court finds that plaintiff has failed to offer sufficient evidence of
defendant’s bad faith. Plaintiff presents no facts from which a reasonable jury could find that State
Farm did not actually rely on the legitimate dispute to deny the claim; denied the claim for an
illegitimate reason; treated plaintiff unfairly; or performed an inadequate investigation. The
undisputed facts establish that State Farm sent a claims specialist to inspect plaintiff’s home and
another representative discussed the contents process with plaintiff. In addition, plaintiff’s assertion
that defendant “denied the list in its entirety without any investigation, . . . research, . . . or
discussion” is not supported by the evidence. On the contrary, the undisputed facts also establish that
plaintiff’s lost item list was reviewed by Abbage and Stanley, who determined the quantity and value
of the items on the list was inconsistent with the damage caused by the fire. Abbage spoke with
plaintiff about that issue and sought any additional information that could corroborate the
information plaintiff submitted on the list. All the while, Abbage and State Farm continued to work
on other aspects of plaintiff’s claim related to the fire. Taken together, these facts demonstrate that
State Farm investigated the claim and discussed with plaintiff multiple times the deficiencies of the
part of the claim that pertained to plaintiff’s lost items.
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In addition, plaintiff’s testimony alleging that Abbage and Stanley instructed her to discard
all of those items and not photograph items under a certain dollar value do not amount to bad faith.
The dispute arose when the lost item list contained many more items at a much higher value than
what defendant’s representatives anticipated or had seen in their previous experience with
comparable claims. That defendant’s representatives may have given different instructions had they
known the full scope of what plaintiff would subsequently claim does not present evidence that
defendant acted in bad faith. Any alleged errors defendant made in instructing plaintiff about
creating the lost item list, and their potential effect on State Farm’s conclusions and decision to not
pay plaintiff for the value of the list are legitimate questions of fact with respect to plaintiff’s breach
of contract claim. On the other hand, plaintiff presents no direct evidence of defendant’s intentional
That State Farm concluded the quantity and value of items in plaintiff’s lost item list was
inconsistent with the damage caused by the fire is sufficient to substantiate that there is a legitimate
dispute as to the extent and valuation of damage. It does not, however, raise any evidence of
intentional bad faith conduct. Therefore, the Court grants defendant’s motion for summary judgment
as to plaintiff’s bad faith claim.
Under Oklahoma law, a jury may award punitive damages “[w]here the jury finds by clear
and convincing evidence that . . . [a]n insurer has recklessly disregarded its duty to deal fairly and
act in good faith with its insured[.]” OKLA. STAT. tit. 23, § 9.1(B)(2). Thus, a punitive damages
claim is “dependent upon bad faith for its basis.” Peters v. Am. Income Life Ins. Co., 77 P.3d 1090,
1099 n.9 (Okla. Civ. App. 2002). Accordingly, plaintiff’s claim for relief based on punitive damages
Case 4:21-cv-00430-CVE-JFJ Document 63 Filed in USDC ND/OK on 11/21/22 Page 16 of 16
fails as a matter of law, and the Court grants defendant’s motion for summary judgment as to the
issue of punitive damages.
IT IS THEREFORE ORDERED that defendant’s motion for summary judgment (Dkt. #
37) is denied in part and granted in part. Defendant’s motion is denied as to plaintiff’s breach
of contract claim, but granted as to plaintiff’s bad faith claim and the issue of punitive damages.
DATED this 21st day of November, 2022.
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