Oklahoma Supreme Court Allows Recovery of Declaratory Judgment Fees

In its recent decision in JP Energy Mktg., LLC v. Commerce & Industry Ins. Co., 2018 OK 11 (Ok. Feb. 5, 2018), the Supreme Court of Oklahoma had occasion to address an insured’s right to recovery legal fees and expenses associated with prosecuting a declaratory judgment action against an insurer.

Having prevailed in its declaratory judgment action against its insurers, JP Energy sought recovery of its fees and costs pursuant to 36 O.S.2011 §3629, which states:

A.  An insurer shall furnish, upon written request of any insured claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.

 

B.  It shall be the duty of the insurer, receiving a proof of loss, to submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt of that proof of loss. Upon a judgment rendered to either party, costs and attorney fees shall be allowable to the prevailing party. For purposes of this section, the prevailing party is the insurer in those cases where judgment does not exceed written offer of settlement. In all other judgments the insured shall be the prevailing party. If the insured is the prevailing party, the court in rendering judgment shall add interest on the verdict at the rate of fifteen percent (15%) per year from the date the loss was payable pursuant to the provisions of the contract to the date of the verdict. This provision shall not apply to uninsured motorist coverage.

The Court acknowledged that an insured’s right to recovery of pursuit costs per this statute was a matter of first impression.  It nevertheless found persuasive cases from the United States Court of Appeals for the Tenth Circuit holding §3629(B) applicable to declaratory judgment actions, in particular the court’s reasoning that recovery of fees under such circumstances make the insured whole.