Trotter et al v. American Modern Select Insurance Company

Filing 94

ORDER denying defendant's motion for summary judgment 69 ...see order for specifics. Signed by Honorable Joe Heaton on 11/14/2016. (cla)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
BRENTON WAYNE TROTTER,
an individual, et al.,

)
)
Plaintiffs
)
vs.
)
)
AMERICAN MODERN SELECT
)
INSURANCE COMPANY, a corporation, )
)
Defendant.
)

NO. CIV-15-024-HE

ORDER
Brenton Trotter and the company he formed in 2009, Trotter Doors, LLC (collectively
“Trotter Doors”), sued American Modern Select Insurance Company (“American Modern”),
the company’s insurer, asserting breach of contract and bad faith claims. Plaintiffs allege
that American Modern breached the duties owed them under a commercial insurance policy
when they were sued by Trotter Overhead Door, Inc., a competing automatic garage door
business company owned by Brenton Trotter’s uncle and for whom he had previously
worked.
American Modern has filed a motion for summary judgment, which is appropriate
only “if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A genuine dispute
as to a material fact ‘exists when the evidence, construed in the light most favorable to the
non-moving party, is such that a reasonable jury could return a verdict for the non-moving
party.’” Carter v. Pathfinder Energy Servs., Inc., 662 F.3d 1134, 1141 (10th Cir. 2011)
(quoting Zwygart v. Bd. of Cnty. Comm'rs, 483 F.3d 1086, 1090 (10th Cir.2007)). Having

considered the submissions of the parties in light of this standard, the court concludes
defendant’s motion should be denied.
Background1
Trotter Doors became embroiled in a family dispute with Trotter Overhead Door, Inc.
(“TOD”) over its use of the name Trotter, certain advertising slogans and logos, and various
domain names in conjunction with its business. TOD sued it, asserting federal claims for
trademark infringement and cybersquatting, a violation of the Oklahoma Deceptive Trade
Practices Act, and unfair competition/trademark infringement under common law.
After Trotter Doors hired Martin Ozinga, a trademark and intellectual property lawyer
to defend it, American Modern, who insured Trotter Doors under a commercial liability
insurance policy, agreed to defend Trotter Doors in the lawsuit subject to a reservation of
rights. It sent Mr. Trotter a letter informing him that the only coverage under the policy that
might apply to the claims asserted in the lawsuit would be that provided for personal and
advertising injury liability. It also informed him that the policy had various exclusions.
Among them was an exclusion for injuries “[c]aused by or at the direction of the insured with
the knowledge that the act would violate the rights of another and would inflict ‘personal
and advertising injury.” Doc. #69-5, p. 4. American Modern agreed for Mr. Ozinga to
continue as Trotter Doors’ attorney, but advised Mr. Trotter that “[b]ecause the insurance
may not apply in whole or in part and/or there may not be adequate insurance to satisfy a

1

Page references to briefs and exhibits are to the CM/ECF document and page number.

2

judgment, Trotter Doors, LLC and/or Brenton Wayne Trotter have the right to retain an
attorney to advise them in these matters,” at their own expense. Doc. # 69-5, p. 6.
The parties concur that for the first year and a half “all American Modern could do
was pay [Mr. Ozinga] to defend the case, as Mr. Trotter was unwilling to relinquish using
the Trotter name.” Doc. #69, p. 11, ¶33. That changed, however, at a mediation that
occurred in August 2013 where the parties essentially reached an agreement regarding the
non-monetary issues or “Branding Terms.”2 Money then became an issue. TOD offered to
settle the case for $750,000, which American Modern rejected, and the case proceeded to
a settlement conference before a federal judge. The case settled at the conference for
$550,000 – American Modern paying $275,000 and Trotter paying $275,000. Afterwards,
Mr. Ozinga and TOD’s attorneys drafted the settlement agreement. After the agreement had
been finalized, American Modern’s monitoring coverage counsel, Patti Potash, who had had
no prior involvement in the litigation, sent TOD’s attorney and Mr. Ozinga an email asking
that the agreement include a release of all claims TOD and Trotter Doors had against
American Modern. She requested that the release language be included “[i]n order to assure
that American Modern is properly protected and can proceed to make timely payment of the
$275,000 . . . .” Doc. #72-4, p. 93. Trotter Doors rejected the proposed wording and
American Modern paid its share of the settlement, apparently by mistake. Ms. Potash

2

The Branding Terms referred to the use of the Trotter family name, advertising slogans
and the use of the Trotter family horse logo, all of which had become synonymous with the
automatic garage door business in the state.

3

continued, unsuccessfully, to try to obtain a release from plaintiffs. Brenton Trotter and
Trotter Doors then filed this breach of contract and bad faith action against American
Modern.
Analysis
Breach of Contract
American Modern initially contends that Trotter Doors cannot establish that the
$275,000 it paid to settle the TOD lawsuit was for any covered claim under the policy and
therefore both its breach of contract and bad faith claims fail.3 See Davis v. GHS Health
Maintenance Org., Inc., 22 P.3d 1204, 1210 (Okla. 2001) (“[A] determination of liability
under the contract is a prerequisite to a recovery for bad faith breach on an insurance
contract.”). Defendant asserts that it would only be required to indemnify Mr. Trotter and
Trotter Doors for their “negligent trademark infringement and nothing else.” The court
concludes otherwise. The policy may also have provided coverage if Trotter Doors had been
found liable for violating the Oklahoma Deceptive Trade Practices Act (“DPTA”).
A person can commit a “nonwillful” violation of the DTPA. “Pass[ing] off goods or
services as those of another,” 78 Okla. Stat. §53(A)(1), and misappropriation of the trade
name of another are among the deceptive trade practices the DPTA prohibits which can be
accomplished nonwillfully. Brunswick Corp. v. Spinit Reel Co., 832 F.2d 513, 527 (10th

3

To the extent American Modern argues that Trotter paid $275,000 to purchase the
Branding Terms, the evidence does not conclusively support its position. See Doc. #72-4, p. 59.
As Trotter notes, he made valuable concessions in the negotiations regarding the Branding
Terms. Doc. #72-15, p. 3.

4

Cir. 1987);4 Bell, 597 P.2d 753, 754,756 (Okla. 1979).

The Act also authorizes a

discretionary award of attorney’s fees for non-willful violations. E.g., Brunswick, 832 F.2d
at 529; Bell, 597 P.2d at 756 (“Even if defendant did not ‘willfully’ engage in deceptive trade
practices the court in its discretion is authorized by the statute to award attorney fees to
prevailing party.”). Considering the evidence in the record regarding TOD’s potential
recoverable damages,5 plus the amount of attorney’s fees TOD”S counsel apparently had
generated, the court concludes a question of fact exists as to whether the $275,000 paid by
Trotter was attributable to a claim or claims (plus fees) covered by the policy.
American Modern’s remaining contractual arguments are that the plaintiffs are barred
by the insurance contract’s voluntary payments and “legal action against us” provisions from
recovering the $275,000 Trotter paid at the settlement conference. As will be discussed
subsequently, a fact question exists was to whether Mr. Trotter’s payment was voluntary.
Further, the “no action” provision is inapplicable, as it was designed to preclude an action
against the insurer by a third party, not the insured.6 See Paul Holt Drilling, Inc. v. Liberty

4

The Tenth Circuit held in Brunswick Corp. that passing off does not require intent to
deceive, but rather “requires the same standards of proof as does an action under Section 43(a)
of the Lanham Act.” Brunswick, 832 F.2d at 527 & n.8.
5

In its diagram setting out TOD’s various claims and recoverable damages, American
Modern shows that TOD might be able to recover treble damages for nonintentional/negligent
federal trademark infringement. Doc. #69, p. 28.
6

The no suit provisions in the cases American Modern cited in footnote 5, Hayes v. State
Farm Fire & Cas. Co., 855 F. Supp. 2d 1291, 1299 (W.D. Okla. 2012) and Caton v. State Farm
Fire & Cas. Co., 2007 WL 2993869, at *5 (W.D. Okla. Sept. 19, 2007) are not similar to the no
action clause in the insurance contract under consideration here.

5

Mut. Ins. Co., 664 F.2d 252, 254 (10th Cir. 1981) (“We think the Oklahoma court would hold
the no action clause is intended to apply only to claims made by third parties.”).
The court concludes plaintiffs have presented sufficient evidence to demonstrate that
a fact question exists as to whether there was coverage for the $275,000 Mr. Trotter paid to
settle the case. In other words, there is a fact question as to whether American Modern
breached the insurance contract by failing to pay the entire $550,000 settlement amount.7

Bad Faith
“Under Oklahoma law,8 an insurer has an ‘implied-in-law duty to act in good faith and
deal fairly with the insured to ensure that the policy benefits are received.’” Automax
Hyundai S., L.L.C. v. Zurich Am. Ins. Co., 720 F.3d 798, 810 (10th Cir. 2013) (quoting Gray
v. Holman, 909 P.2d 776, 780 n. 9 (Okla.1995)). In Badillo v. Mid Century Ins. Co.,121
P.3d 1080 (Okla. 2005) the Oklahoma Supreme Court clarified the level of culpability
necessary for an insurer to be held liable for breach of the duty of good faith and fair dealing
“in relation to the handling of a third-party claim made against the insured.” Id. at 1094. It
is “more than simple negligence, but less than the reckless conduct necessary to sanction a

7

Defendant also argues that equity precludes plaintiffs from recovering. The court is not
persuaded that, based on Gay & Taylor, Inc. v. St. Paul Fire & Marine Ins. Co., 550 F. Supp.
710, 717 (W.D. Okla. 1981), it “can decide that the parties intended to share the costs of the
settlement equally.” Doc. #69, p. 42. Gay was tried to the court. A jury will “disentangle the
facts relevant” to plaintiffs’ claims in this case. Automax Hyundai S., L.L.C. v. Zurich Am. Ins.
Co., 720 F.3d 798, 807 (10th Cir. 2013).
8

This is a diversity action, governed by Oklahoma law. See Automax Hyundai, 720 F.3d

at 804.

6

punitive damage award against said insurer.” Id. “A central issue in any analysis to
determine whether breach has occurred is gauging whether the insurer had a good faith belief
in some justifiable reason for the actions it took or omitted to take that are claimed violative
of the duty of good faith and fair dealing.” Id. at 1093-94.9 See Milroy v. Allstate Ins. Co.,
151 P.3d 922, 928 (Okla.Civ.App.2006) (affirming summary judgment on bad faith claim
where, among other things, “[t]he record reveal[ed] that Allstate legitimately disputed the
alleged value of [the third party’s] claim”).
Although plaintiffs’ bad faith claim is based primarily on American Modern’s conduct
at and after the settlement conference, they also argue that the insurer’s pre-conference
conduct breached the duty of good faith an insurer owes its insured.
Plaintiffs initially contend that defendant improperly breached the “Chinese Wall”
that was erected to avoid a potential conflict of interest between the insured and insurer.
Because plaintiffs’ insurance claim presented potential coverage issues, American Modern
split plaintiffs’ file, assigning adjuster Linda Wood initially, and then Ressie Ragland, to
handle Trotter’s defense and Connie Rockett, and later Jared Lamb, to be responsible for
coverage issues. Plaintiffs assert that the “defense and coverage sides repeatedly and
improperly communicated in a manner adverse to its insureds’ ‘best interests.’” Doc. #72,
p. 9. Plaintiffs do not, though, offer evidence from which a reasonable juror could conclude

9

Badillo is otherwise distinguishable from this case, as there the adjuster “knew or
should have known the claim against insured was one of probable liability . . . and that it was
pretty much certain [the third party claimant’s] damages greatly exceeded the $10,000.00 policy
limits.” Badillo, 121 P.3d at 1089.

7

that the alleged improper communications affected the insurer’s handling of the case.
Plaintiffs point to Ms. Wood’s inquiry to Ms. Rockett early in the case as to whether the
cybersquatting claim was covered, but offers no evidence showing how, because of the
response Ms. Woods received, the defense of the case was hampered in any respect.
Trotter Doors contends American Modern also crossed the line when, prior to the
mediation, individuals on the coverage side “discussed at length strategies going into
Monday’s mediation,” Doc. 72-4, p. 84, Woods had a conversation with unidentified persons
and it was determined that “someone representing coverage [would] attend the mediation to
drive home that many aspects of the case are not covered,” Doc. #74-2, p. 62, and coverage
counsel was sent to the mediation. However, plaintiffs submit no evidence that Mr. Trotter
was aware that the attorney who appeared was from the coverage, rather than the defense
side, of the claim file, or that he stated or did anything to prejudice the defense. In their brief
plaintiffs do not fault American Modern for not settling the case at the mediation, but focus
on its refusal to pay more than $275,000 at the subsequent settlement conference. As
plaintiffs admitted, “[u]ntil the Branding Terms were resolved,” which essentially occurred
at the mediation, “there could be no discussion of a monetary settlement in which American
Modern could contribute.” Doc. #69, pp. 11-12 (Fact #33).
Woods testified that the file is split: “[s]o that I can make decisions that are in best
interest of the insured to defend it, not – I don’t defend, you know, one count differently than
– more vigorously defend Count 1 than I defend Count 2 because it’s not covered. So it’s
so that there’s no – I defend the whole thing.” Doc. #72-2, p. 4. Plaintiffs do not allege or
8

offer any evidence that American Modern provided only a partial defense or that it defended
only covered claims. It was not really until the settlement conference that plaintiffs became
dissatisfied with the way American Modern was handling their defense.
The remaining pre-settlement conference conduct which plaintiffs cite as evidence of
bad faith consists of the reservation of rights letter American Modern sent Mr. Trotter a few
days before the conference and shortly before the scheduled trial. Plaintiffs assert that it was
the first time American Modern had informed Mr. Trotter that any of the money damages
were not covered. They also point to language in the letter informing Mr. Trotter of his
potential excess exposure for $2.75 million and the timing of the letter, all of which, defense
attorney stated, scared and unnerved him.
Although Mr. Trotter asserts he had not been informed previously about which claims
were covered under the policy, his attorney testified that he had had “discussions about the
cybersquatting frequently” with Mr. Trotter because of the opinion letters.10 Doc. #72-5, p.
9. See also id. at p. 10. In its initial, February 27, 2012, reservation of rights letter,
American Modern provided Mr. Trotter with notice of the policy exclusions it was relying
on. There was no question but that willful trademark infringement would fall within the
provision which excluded coverage for personal and advertising injury “[c]aused by or at the
direction of the insured with the knowledge that the act would violate the rights of another

10

Counsel stated: “If he had been hit with [the] exceptional case, absolutely.” Doc.
#72-5, p. 9. In other words, if Mr. Trotter had been found to have acted with a bad faith intent,
required to commit cybersquatting, the policy would not have provided coverage.

9

and would inflict ‘personal and advertising injury.’” Doc. #72-4, p. 54. Mr. Ozinga knew
there would be no coverage “if it was an exceptional case, if it was found like [Trotter] was
intentionally doing something.” Doc. #72-5, p. 8. However, he was confident that “there’s
no way that could happen,” because “[i]t’s his last name.” Id.11
As for the $2.75 million amount cited, the letter stated that was plaintiffs’ expert’s
estimation of plaintiffs’ damages resulting from the alleged trademark infringement. And
as for the timing of the letter, that alone is not enough, in the absence of other evidence, to
create an inference of bad faith. Such reservation of rights letters are commonplace. That
was why the letter did not concern plaintiffs’ counsel, who testified that he understood why
it was sent, stating that “[i]t’s something we [attorneys] just take for granted.” Doc. 72-5,
p. 7.
The crux of plaintiffs’ bad faith claim is American Modern’s failure to fund the entire
$550,000 settlement amount at the October settlement conference. The problem with
plaintiffs’ claim is that, in determining how much it would offer to settle, American Modern
relied on the value given the case by the attorney who had been hired by plaintiffs. Mr.
Ozinga testified that his opinion, which he repeatedly provided to American Modern,
remained the same throughout the litigation. And his opinion was that the verdict in the case

11

Plaintiffs are being somewhat disingenuous when they assert that coverage
representatives “planned with defense on coverage issues” but “secreted the same from Mr.
Trotter until just before the settlement conference.” Doc. #72, p. 34. Mr. Trotter was not
proceeding pro se in the litigation and his attorney’s communications with Linda Woods’
reflected that it was Mr. Trotter’s concerns about TOD’s potential recovery on noncovered
claims that scared him. See Doc. #72-4, p. 61 (Woods’ claim file, 8/23/13 3:22:41 PM entry).

10

for all claims, covered and noncovered, was going to be less than $100,000. Doc. #69-9, p.
123.
After the August 19, 2013, mediation, Linda Wood asked Ozinga if the following
accurately summarized their conversations about the case: “Even though the plaintiff will be
able to put up around 5 million, it's doubtful a jury will see this as anything more than a
family squabble and we expect very little, if any, money will change hands. It seems
unlikely that there will be an award greater than 100k.” Doc. #72-4, 40. Ozinga responded:
“That is essentially my opinion as the case stands today. Once again, my client does want
to settle as previously discussed regardless of my opinion – which is understandable when
you are looking at a potential million dollar claim by the plaintiff.” Id. at p. 41. Ozinga’s
demands that American Modern settle the case were not based on any reevaluation he did but
on “what the client wanted to do.” Doc. 69-9, p. 72.12 Woods testified that American
Modern “relied very heavily on Mr. Ozinga in the case, very, very heavily. He was the
insured’s attorney.” Doc. #69-12, p. 21.
Plaintiffs have not offered evidence demonstrating it was inappropriate or
unreasonable for American Modern to depend, when making settlement decisions, on the
opinion of the attorney who had been handling the case from the beginning.13 See Garnett

12

Mr. Ozinga stated that “if my client wants to settle it, that’s not an unreasonable
amount if its within the policy limits.” Doc. #69-9, p. 53.
13

While Jennifer Miller, who was an attorney working with Mr. Ozinga, may have had
concerns about Mr. Trotter’s exposure, the communications with American Modern were
generally through Mr. Ozinga. Doc. #72-8, p. 10.

11

v. Gov't Emps. Ins. Co., 186 P.3d 935, 944 (Okla.2008) (“The essence of the tort is the
unreasonable, bad-faith conduct of the insurer. A central issue is whether the insurer had a
good faith belief in some justifiable reason for the actions it took or omitted to take . . . .”).
Against the backdrop of Mr. Ozinga repeatedly telling American Modern that the verdict
value was less than $100,000, no rational juror could conclude that American Modern’s offer
to settle the case for almost three times what Mr. Ozinga had said it was worth was
unreasonable. See Magnum Foods, Inc. v. Continental Cas. Co., 36 F.3d 1491, 1507 (10th
Cir. 1994) (evidence supporting a reasonable inference that insurer acted in bad faith
included claim adjuster’s recommendation that assault (rape) claim against insured be treated
as “merely a sex discrimination case for settlement purposes,” despite his estimation of “only
a 55% chance of securing a defense verdict” in the underlying case brought against the
insured, and the fact that the “senior claims analyst who evaluated the plaintiffs' claim to
determine what amount to offer at the court-ordered mediation only received the file the day
before, which gave her a short time in which to make her evaluation).
Even though Mr. Ozinga's $100,000 case valuation of a possible jury verdict did not
distinguish between covered and noncovered claims, Doc. #69-9, p. 81, American Modern
also could consider which claims were covered by the insurance policy when determining
the amount it was willing to offer in settlement. This is a critical fact which plaintiffs ignore.
An insurer’s duty to settle applies only to covered claims. See 3 New Appleman on
Insurance Law § 23.02[6][c] (Library Edition 2015); see also Magnum Foods, 36 F.3d at
1506 (duty of good faith held not to require insurer to settle or contribute to the settlement
12

of an uninsurable punitive damages claim).14 “If the suit includes both covered and
noncovered claims, the insurer need contribute no more than the fair settlement value of the
covered claims.” 3 New Appleman on Insurance Law § 23.02[6][c].
One key concern was TOD’s ability to recover attorney’s fees from Trotter Doors.
When specifically asked by American Modern whether TOD could recover fees and “under
which counts,” Mr. Ozinga advised the insurer that it could “potentially get fees under the
federal trademark infringement count and the Oklahoma unfair competition count, but not
on the Cybersquatting.” Doc. #72-4, p. 41. However, Mr. Ozinga stated that, “[t]o get fees
in an infringement case, the standard is if the infringement was ‘exceptional.’ This
usually/essentially means willful infringement coupled with bad faith conduct.” Id.
American Modern had been advised by Mr. Ozinga that the jury verdict should not
exceed $100,000 and that an attorney’s fees award was unlikely but, if it occurred, would
only occur if the infringement was willful and thus fell within the policy exclusion. Under
these circumstances, plaintiffs have not created a fact question as to whether American
Modern’s decision to limit its contribution to the settlement to $275,000, even though it was
below the policy limits, was unreasonable. See Magnum Foods, Inc. v. Cont'l Cas. Co., 36
F.3d 1491, 1508 (10th Cir. 1994) (“If an insurer fails to act cooperatively to reach a

14

Because the insurer does not have to contribute to the settlement of noncovered claims,
there has to be some communication between individuals handling the defense and coverage
sides of a split file. As explained by Ms. Rockett, the person handling the insured’s defense needs
to know about coverage because “when they are going to come up with a settlement number, if
there’s no coverage for a particular allegation,...[American Modern] shouldn’t be offering to
cover that particular allegation.” Doc. #72-1, pp. 4-5. The Chinese wall is not impenetrable.

13

settlement—for example, by refusing to make a reasonable offer to settle at least the insured
portion of the claim—then the insurer's conduct may be reasonably perceived as tortious, and
the trial court may submit the issue of bad faith to the jury.”).
In reaching this decision the court has considered the behavior of Ms. Woods, the
insurance adjuster, at the settlement conference. There if no evidence that she “hammered”
Mr. Trotter into contributing his own money to settle the case.15 While she did refuse to
contribute more when the parties reached an impasse, Mr. Trotter admitted American Modern
did not force him to pay the $275,000. Doc. #69-2, p. 67. Mr. Trotter simply felt he “had
no other resolution.” Id. The evidence as to Mr. Trotter’s payment may well create a fact
question as to whether the payment was “voluntary” within the meaning of the voluntary
payment provision of the insurance contract, but it is insufficient to support an inference of
bad faith.16
However, while the insurer’s conduct did not cross the bounds of reasonableness at
15

The statements of Mr. Sensibar, Linda Woods’ superior, as to what he believed
constituted permissible conduct by an insurer towards its insured to get the insured to contribute
to a settlement within policy limits do not affect the resolution of the bad faith issue. Mr.
Sensibar was not present at the settlement conference and there is no evidence that Ms. Woods
told Mr. Trotter at the conference to get him to contribute to the settlement that he was
“potentially going to get hit for either an excess verdict or uncovered damages if he [went] to
trial.” See Doc. 72-6, p. 4.
16

Mr. Trotter and Trotter Doors do not dispute that the voluntary payments provision
could apply in a situation where both the insured and insurer contribute to a settlement. They
argue only that Mr. Trotter’s payment was not “voluntary,” as the term is used in the contract
provision. While plaintiffs rely heavily on Traders & Gen. Ins. Co. v. Rudco Oil & Gas Co., 129
F.2d 621 (10th Cir. 1942) to support their position that American Modern cannot invoke the
voluntary payment clause, that case is clearly distinguishable. The insurer “refused to agree to
the settlements, or to participate therein,” and the coverage in that case was “plain” and
insured’s liability “patent.” Id. at 624, 628.

14

the settlement conference, the court concludes a question of fact does exist as to whether its
conduct afterwards amounted to bad faith.
At the settlement conference the parties did not reach an agreement that Trotter Doors
would release its indemnity claim against American Modern. So far as appears from the
parties’ current submissions, the issue was not discussed. Ms. Woods simply assumed Mr.
Trotter agreed to a release but admitted she “did not tell him he had to sign a policy release.”
Doc. #72-2, p. 18. The settlement agreement does not mention a release of any type. Doc.
#69-33. Nonetheless, American Modern subsequently indicated it would withhold payment
of its portion of the settlement payment unless the agreement included language in which Mr.
Trotter and Trotter Doors released any claims, including a bad faith claim, they might have
against American Modern under Policy # Q61020359 or related to the TOD lawsuit. Doc.
#72-4. pp. 93-94. This evidence supports an inference that, motivated at least partially by the
“bad faith implication letter from plaintiff sent . . . by insured’s counsel,” Doc. #72-9. p. 1,17
the insurer threatened to upend a hard wrought settlement.
American Modern responds that counsel for TOD and Trotter Doors negotiated the
settlement agreement after the settlement conference, but excluded it from the negotiations.
However, the evidence American Modern submitted does not demonstrate that Mr. Ozinga
or anyone else precluded it from participating in the negotiation process, particularly since

17

Under Oklahoma’s Unfair Claim Settlement Practices Act, it is an unfair claim
settlement practice to “[r]equest[] a claimant to sign a release that extends beyond the subject
matter that gave rise to the claim payment.” 36 Okla. Stat. § 1250.5(8).

15

American Modern was sent draft copies of the settlement agreement. See Doc. #72-4, pp.
14-18, p. 58. There is no indication in the record that American Modern believed it should
have been included in the drafting process until Ms. Potash sent Mr. Ozinga and TOD’s
counsel her November 20, 2016, email, after TOD had signed the settlement agreement. See
Doc. # 72-4, pp. 12, 93-94. The court concludes American Modern’s conduct in conjunction
with its attempt to obtain a release creates a fact question precluding summary judgment on
plaintiffs’ bad faith claim.
The court has concluded that plaintiffs have presented sufficient evidence to
demonstrate that fact questions exist as to whether American Modern breached the insurance
contract by failing to pay the entire $550,000 settlement amount and as to whether it then
committed bad faith by conditioning its payment of the amount it agreed to pay on Brenton
Trotter and Trotter Doors’ execution of a complete release that they had not previously
agreed to execute. Accordingly, defendant’s motion for summary judgment [Doc. #69] is
denied.
IT IS SO ORDERED.
Dated this 14th day of November, 2016.

16