Don Embry v. Innovative Aftermarket Systems L.P. a/k/a ISA L.P. f/k/a Innovative Aftermarket Systems, Inc. f/d/a IAS Inc.; Twin City Fire Insurance Company; and Hartford Fire Insurance Company

Summary

The Oklahoma Supreme Court reviewed a certified interlocutory summary judgment concerning claims arising from a gap-protection agreement for an automobile loan. The court held that the agreement could support tort liability for bad faith or breach of the implied covenant of good faith and fair dealing, but that negligence was not an independent theory of recovery for contract performance. The summary judgment was affirmed in part, reversed in part, and remanded.

Holdings

1. An insurance contract is not required to support tort liability for bad faith; such liability may arise when the contract creates a special relationship characterized by a disparity in bargaining power and elimination of risk.
2. Summary judgment eliminating plaintiff's bad-faith theory was improper because, viewing the evidence in plaintiff's favor, defendants' conduct could reasonably be perceived as tortious and the expert evidence supported submission of the issue to a jury.
3. There is no general duty to use reasonable care in performing a contract; alleged neglect or lack of diligence in contractual performance is encompassed by the implied covenant of fair dealing and good faith and is not an independent negligence theory of recovery.

Questions Presented

1. Whether defendants' subjective belief that the deficiency-payment agreement was not insurance precluded tort liability for bad faith.
2. Whether the evidentiary materials created a sufficient basis for submitting plaintiff's bad-faith theory to a jury.
3. Whether negligence is an independent theory of recovery for unreasonable performance of a contract under Oklahoma law.

Disposition

reversed_and_remanded