TALLIE MCKINNEY, Plaintiff - Appellee,
v.
PROGRESSIVE DIRECT INSURANCE COMPANY, a/k/a Progressive, Defendant - Appellant,
and CSAA GENERAL INSURANCE COMPANY, d/b/a AAA Insurance, Defendant. TALLIE MCKINNEY, Plaintiff - Appellant,
v.
CSAA GENERAL INSURANCE COMPANY, d/b/a AAA Insurance, Defendant - Appellee,
and PROGRESSIVE DIRECT INSURANCE COMPANY, d/b/a Progressive, Defendant.
United States Court of Appeals, Tenth Circuit
December 9, 2021
D.C. No. 5:18-CV-00767-HE (W.D. Okla.)
Before MATHESON, BRISCOE, and PHILLIPS, Circuit Judges.
ORDER AND JUDGMENT [*]
MARY BECK BRISCOE, CIRCUIT JUDGE
Defendant Progressive Direct Insurance Company (Progressive) appeals the district court's denial of its motion for summary judgment. Plaintiff Tallie McKinney (McKinney) appeals the district court's grant of summary judgment in favor of defendant CSAA General Insurance Company (CSAA). These interrelated appeals arose from the same district court case and are resolved together here. The district court did not err in denying Progressive's motion for summary judgment or in granting CSAA's motion for summary judgment. Accordingly, we AFFIRM.
I
McKinney was a passenger in a car driven by Sierra Shannon. Shannon caused a single-car accident, and McKinney sustained injuries. Shannon and the car were covered by an insurance policy with Progressive, and McKinney was covered by an insurance policy with CSAA. The Progressive policy provided bodily injury liability coverage with a limit of $100, 000.00 per person and $300, 000.00 per accident, and uninsured or underinsured motorist ("UM") coverage, also with a limit of $100, 000.00 per person and $300, 000.00 per accident. Progressive paid McKinney the $100, 000.00 limit in liability coverage but refused to pay anything
under the UM coverage provision, asserting McKinney was subject to an exclusion in the UM coverage. CSAA obtained some medical records and evaluated McKinney's claim. CSAA employee Brett Greiwe averred that CSAA used a medical authorization to obtain McKinney's medical records in its investigation of her claim. It assessed the amount of medical expenses paid at $33, 482.88[1] and determined her range of general damages was $75, 000.00-$85, 000.00. Thus, it valued her total claim at $108, 482.88-$118, 482.88. As Progressive had already paid $100, 000.00, CSAA offered $8, 482.88 but conditioned payment on McKinney signing a release. McKinney rejected the offer without a counteroffer or any attempt to discuss the evaluation.
McKinney sued Progressive and CSAA in Oklahoma state court, and the case was removed to the Western District of Oklahoma pursuant to diversity jurisdiction. McKinney asserted breach of contract against Progressive, arguing the UM exclusion was not valid under Oklahoma law and that she was entitled to recover under the UM coverage. She asserted bad faith against CSAA, claiming it improperly low-balled its offer and did not tender partial payment. After the suit was filed, CSAA re-evaluated McKinney's claim at $133, 888.04-$158, 888.04 and offered McKinney $33, 888.04, but McKinney never responded to the new offer. The insurance companies moved
for summary judgment. The district court denied Progressive's motion, finding its UM exclusion void under Oklahoma public policy, and allowing a trial on the contract claim. The district court granted CSAA's motion, dismissing the bad faith claim. A jury then found for McKinney on the contract claim and assessed her damages at $325, 000.00, which the district court reduced to $225, 000.00 given Progressive's previous payment of $100, 000.00 in liability coverage.
Progressive appeals the district court's denial of its motion for summary judgment on McKinney's breach of contract claim, and McKinney appeals the district court's grant of summary judgment to CSAA on McKinney's bad faith claim.
II
We "review[] a district court's decision on a summary judgment motion de novo, applying the standard set out in Rule 56(a) of the Federal Rules of Civil Procedure." Reorganized FLI, Inc. v. Williams Cos., Inc., 1 F.4th 1214, 1218 (10th Cir. 2021). "Under that standard, a 'court shall grant summary judgment 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.'" Id. (quoting Fed.R.Civ.P. 56(a)).
A
The district court's denial of Progressive's motion for summary judgment on McKinney's breach of contract claim is affirmed because the UM exclusion in Progressive's policy is void as a matter of law, and UM coverage therefore applies to McKinney. In another case involving an identical UM provision, the Oklahoma Supreme Court responded to a certified question and resolved this issue.
See Lane v. Progressive N. Ins. Co., No. 19-6085, 2021 WL 4592266 (10th Cir. Oct. 6, 2021) (unpub.); Lane v. Progressive N. Ins. Co., 494 P.3d 345 (Okla. 2021). McKinney and Progressive both acknowledge that the issue here is indistinguishable from the issue in Lane. See McKinney Aplt. Br. at vii; Progressive Aple. Br. at 1. We agree, noting that both cases deal with identical policies and involve "Class 2" insureds (individuals who are covered by virtue of their presence in the covered vehicle).
In Lane, the district court granted summary judgment to Progressive, upholding the same broad UM exclusion at issue here. A panel of this court certified a question to the Oklahoma Supreme Court, asking whether the public policy underlying Oklahoma's UM insurance statute, Okla. Stat. tit. 36, § 3636, prohibits Progressive's UM exclusion. The Oklahoma Supreme Court concluded it did. The Court held that "Progressive's UM Exclusion violates public policy because an insurer in Oklahoma cannot deprive its policyholder of uninsured-motorist coverage for which a premium has been paid through an exclusion that effectively erases its policyholder's choice to purchase that coverage in the first place." Lane, 494 P.3d at 346. It therefore voided the exclusion, effectively removing it from the policy. Id. at 353...
