Hensley v. State Farm Fire and Casualty Co.

Summary

The Oklahoma Supreme Court held that a buyer under a contract for deed does not acquire an insurer's implied-in-law duty of good faith merely from equitable title to the property. However, disputed facts concerning whether the buyer was an intended third-party beneficiary or insured required resolution by the trier of fact, so the court reversed summary judgment for State Farm and remanded the case.

Holdings

1. A buyer's equitable title to property arising from a contract for deed is insufficient by itself to confer insured status or a policy-created right to the insurer's implied-in-law duty of good faith when the buyer is not expressly named in the policy as a lienholder, insured, loss payee, or third-party beneficiary and the contract for deed is not expressly referenced in the policy.
2. A claimant need not be specifically named in an insurance policy to qualify as an intended third-party beneficiary, but the claimant must present evidence that the contracting parties intended the policy to benefit him. That intent may be determined by the trier of fact.
3. Summary judgment for State Farm was improper because disputed material facts and inferences existed concerning whether Douglas was an insured or intended third-party beneficiary under the policy.

Questions Presented

1. Whether a buyer's equitable title under a contract for deed, standing alone, confers insured status or a policy-created right to bring an insurer bad-faith claim.
2. Whether disputed evidence concerning the parties' intent and State Farm's treatment of Douglas could support a finding that Douglas was an intended third-party beneficiary or insured under the policy.
3. Whether summary judgment was proper when material facts and inferences concerning Douglas's status under the insurance policy were disputed.

Disposition

reversed_and_remanded