Insurance Agent Dropped From Bad Faith Suit

insagentTULSA, May 6 – An insurance agent who neither wrote nor issued the insurance policy was dismissed from a federal bad faith and coverage suit by an Oklahoma federal judge last week.

Christopher Wise filed a state court breach of contract suit against two insurers after they denied coverage  to Wise following a motorcycle accident Wise was involved in on the same day he purchased the bike.  The Hagerty Insurance Agency produced one of the policies issued by Essentia Insurance Company.  CSAA General Insurance Co. was the other insurer.

Essentia removed the action to the U.S. District Court for the Northern District of Oklahoma based on diversity jurisdiction, and the Hagerty  agency  moved to dismiss for failure to state a claim for relief on the grounds that it was not an insurance company, and it neither wrote nor issued any policy to Wise.

U.S. District  Judge Claire V. Eagan granted the motion, holding:

“[u]nder Oklahoma law, an insured cannot state a claim against an insurance agent for breach of contract when it is not in privity of contract with that agent…Defendant Hagerty included with its motion to dismiss both the insurance card and the relevant policy. The insurance card clearly states that the insurance company is Essentia and that Hagerty is the agent. The policy itself, in the definitions section, defines ‘we,’ ‘us,’ and ‘our’ as ‘the Company providing insurance.’ The policy does not include any provision involving the insurance agent, nor does it impose any responsibility on the agent under the contract. These documents clearly demonstrate that defendant Hagerty is the insurance agent, not the insurance company. The insurance contract is between Essentia and plaintiff, and Hagerty is a stranger to this contract. As such, plaintiff has failed to state a claim against Hagerty for breach of contract and bad faith. Defendant Hagerty’s motion to dismiss should be granted.”

Wise v. CSAA Insurance Group, Inc. et al  (N.D. Okla. 2016)

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Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than a quarter of a century, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800.

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