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Date: 05-16-2023

Case Style:

Michael W. Hayes, Jr. v. Transportation Insurance Company, et al.

Case Number: 23-CV-124

Judge: Claire V. Egan

Court: United States District Court for the Northern District of Oklahoma (Tulsa County)

Plaintiff's Attorney:

Click Here For The Best Tulsa Personal Injury Lawyer Directory

Defendant's Attorney: Andrew Charles Jayne and Tara Dawn Zickefoose

Description: Tulsa, Oklahoma personal injury truck wreck lawyer sued Defendants on auto negligence and medical malpractice theories.

On October 10, 2018, plaintiff was injured when a tortfeasor stuck plaintiff's vehicle from behind. Dkt. # 2-1, at 2. Plaintiff's vehicle was owned by his employer, and plaintiff was operating it within the scope of his employment at the time of the incident. Id. Plaintiff alleges that his employer had purchased an automobile insurance policy with Transportation/CNAF, which covered the vehicle plaintiff was operating. Id. at 3. The policy included $1,000,000 in underinsured/uninsured motorist (“UM”) coverage, which was available to plaintiff under the circumstances. Id.

On August 27, 2019, plaintiff sent Transportation/CNAF “his medical records and bills in support of his UM claim” under the policy. Id. On March 4, 2020, Transportation/CNAF evaluated plaintiff's claim in the amount of $48,200, which, after the tortfeasor's limits of $25,000, meant Transportation/CNAF claimed it owed plaintiff $23,200. Id. Also on March 4, 2020, plaintiff informed Transportation/CNAF that he would be undergoing an evaluation because his injuries “were still ongoing,” and Transportation/CNAF “did not question or object” to plaintiff seeking an evaluation. Id. On March 10, 2020, Transportation/CNAF “demanded [plaintiff] sign a Release before [they] would issue any payment . . . for his UM claim.” Id. Plaintiff did not sign any release and continued to pursue his subsequent medical evaluation for his claim.

On April 17, 2020, plaintiff was evaluated in person for his injuries by Dr. Aaron McGuire, who recommended additional treatment including “chronic pain management with a pain management specialist” and determined that plaintiff “sustained a total of 45% whole person permanent partial impairment to his lumbar spine.” Id. at 4-5. On May 21, 2020, plaintiff sent Dr. McGuire's medical evaluation report to Transportation/CNAF “for review and further evaluation as part of [his] UM claim.” Id. at 5. Transportation/CNAF “hired an outside law firm to help evaluate” plaintiff's claim, and that firm advised Transportation/CNAF to hire Dr. Hendricks “to complete a Defensive Medical Examination (‘DME')” of plaintiff. Id. Dr. Hendricks did not conduct a physical examination of plaintiff, but reviewed his medical records and submitted a report to Transportation/CNAF, which then “relied on” the report “to justify” its “refusal to pay additional UM benefits owed to [plaintiff] for his ongoing injuries and permanent disabilities.” Id. at 5, 6.

Thereafter, on October 16, 2020, Transportation/CNAF issued payment to plaintiff for the full amount it agreed it owed him more than seven months earlier, but no longer required that plaintiff sign the release. Id. at 4. This alleged improper delay, and the initial requirement that plaintiff sign a release as a condition of payment, forms the basis of plaintiff's bad faith claim against the insurer.

On September 7, 2022, plaintiff filed this petition in Tulsa County District Court alleging four claims for relief: “bad faith” (count 1) against defendants Transportation and CNAF; and tortious inference with contract (count 2), medical malpractice (count 3), and defamation (count 4) against Dr. Hendricks. Dkt. # 2-1. Plaintiff completed service of process on CNAF and Transporation on March 1, 2023, and March 2, 2023, respectively. Dkt. # 2-6 at 3-4. Dr. Hendricks has not been served, nor does it appear that plaintiff ever sought a summons for him. Id.

On March 30, 2023, Transportation removed the action to this Court, pursuant to 28 U.S.C. §§ 1441, 1446, and 1332. Dkt. # 2. Plaintiff is a resident of Tulsa County, Oklahoma. Dkt. # 2-1 at 1. Transportation and CNAF are both foreign, for-profit companies outside Oklahoma; however, Dr. Hendricks is a “citizen and resident” of Tulsa County, Oklahoma. Id. at 1-2. Transportation notes that Dr. Hendricks had not been served process, and asserts that plaintiff fraudulently joined Dr. Hendricks in an attempt to thwart diversity jurisdiction. Dkt. # 2. On April 3, 2023, plaintiff filed his motion to remand, arguing that Transportation has not demonstrated there is no possibility of recovery against Dr. Hendricks. Dkt. # 11. However, to date, defendant has not addressed why Dr. Hendricks has not been properly served.

On April 6, 2023, CNAF filed its motion to dismiss for lack of personal jurisdiction. Dkt. # 13. Attached to its motion to dismiss, CNAF provided a declaration of David B. Lehman, the assistant secretary of CNAF. Dkt. # 13-1. In it, Lehman states that “CNAF is a publically traded holding company, organized under the laws of the State of Delaware, and it maintains its principal place of business in Chicago, Illinois. CNAF was created for, among other reasons, the purpose of holding common stock of a number of operating subsidiaries for the benefit of CNAF's shareholders.” Id. at 1. Lehman states that CNAF is the parent company of The Continental Corporation, which is in turn the parent company of Continental Casualty, which is the parent company of defendant Transportation. Id. at 2. Lehman states that “‘CNA Commercial Insurance' is not a company. Rather, ‘CNA' is a service mark registered with the United States Patent and Trademark Office by CNAF. Certain of CNAF's direct and indirect subsidiaries, including Continental Casualty and [Transportation], are permitted to use this service mark and do so in their insurance underwriting and claims activities.” Id. Lehman states that CNAF does not do business in Oklahoma, does not own property in Oklahoma, and does not have any offices or employees in Oklahoma. Id. Lehman further states that CNAF is not now and never has been a licensed insurer, and has never held a certificate of authority from the Commissioner of the Department of Insurance
of the State of Oklahoma. Id. He states that CNAF does not develop, underwrite, market, or issue, and never has developed, underwritten, marketed, or issued, insurance policies anywhere, including in Oklahoma. Id. He states that CNAF does not hire and never has hired any underwriters or other employees responsible for setting premiums for any insurance policies issued by any of its subsidiaries, including Transportation. Id. He states that CNAF has never adjusted, settled, or paid any insurance claims anywhere, including in Oklahoma. Id. He states that no person or entity, including any direct or indirect subsidiary of CNAF, has ever had the express or implied authority to act as CNAF's agent in the issuance of insurance policies or handling claims for insurance benefits. Id. at 3. He states that CNAF does not do business as “CNA Commercial Insurance” in Oklahoma or elsewhere. Id. He further states that CNAF did not develop, underwrite, or issue an insurance policy to plaintiff or his employer. Id. He states that CNAF has no employees, and its board of directors conducts separate meetings from those of its subsidiaries. Id. CNAF also maintains its own minutes of its board meetings, by-laws, articles of incorporation, and corporate records, while its subsidiaries have their own minutes, by-laws, articles of incorporation, and corporate records. Id. CNAF maintains its own books and accounting records and its own separate banking financial accounts. Id. at 4. CNAF and its direct and indirect subsidiaries, including Transportation, have always been separate and distinct corporate entities. Id.

Outcome: IT IS THEREFORE ORDERED that plaintiff's petition (Dkt. # 2-1) is dismissed without prejudice, in part, as to all claims asserted against defendant Randall L. Hendricks, M.D. and Dr. Hendricks is dismissed without prejudice from this action.

IT IS FURTHER ORDERED that plaintiff's motion to withdraw his motion to remand (Dkt. # 25) is denied.

IT IS FURTHER ORDERED that plaintiff's motion to remand (Dkt. # 11) is denied, as the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.

IT IS FURTHER ORDERED that defendant CNA Financial Corporation's motion to dismiss for lack of personal jurisdiction (Dkt. # 13) is granted. Plaintiff's petition (Dkt. # 2-1) is dismissed without prejudice, in part, as to all claims asserted against defendant CNA Financial Corporation and it is dismissed without prejudice from this action. Count one of plaintiff's petition is the only count remaining, and it remains pending against defendant Transportation Insurance Company only.
Hayes v. Transp. Ins. Co. (N.D. Okla. 2023)

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