In Desmet v. Scottsdale Ins. Co., No. CIV-20-330-J, 2021 WL 5173637 (W.D. Okla. October 21, 2021), a federal judge in the Western District of Oklahoma confronted and resolved issues of Oklahoma law concerning Umbrella/Excess Policies, Primary Policies, Uninsured Motorist Coverage, and Good Faith Duties among all of it.
In this case, an Umbrella Policy was at bar. This particular type of Excess Policy required Underlying Insurance, of course. Duties did not incept or begin under the Umbrella Policy until the Underlying Insurance was exhausted, in sum and in substance.
Further, Oklahoma law made and makes Uninsured Motorist Coverage primary. In this case, the Underlying Insurance including primary insurance was not exhausted before the plaintiff sued the Umbrella for alleged bad faith. (Under Oklahoma law, only primary carriers are required to offer U.M. Coverage but in this case, the Umbrella Policy offered U.M. Coverage as a part of the Umbrella contract.)
Moreover, the terms of the contract are equally clear that all underlying insurers must have paid or been held liable to pay the full amounts of their UM coverage policies before the Umbrella Policy was triggered. Umbrella Policy at 9, 24, 27, 32. As such, Defendant's liability did not attach until the insurers of all the underlying insurance had paid or been held liable to pay the full amount of their respective UM coverage liability.
Desmet, 2021 WL 5173637, at *4.
Since the Umbrella Carrier was sued before its Duties of Good Faith ever incepted or even began, the Court granted its Motion for Summary Judgment on the bad faith claims alleged against it in this case.
The plaintiff requested leave to amend but the time for amendments established by the Court's Scheduling Order had already passed, and even if the request to amend were to be considered, the Court wrote that it was presented only with general arguments that 'justice requires leave to amend' without any particularized grounds to amend, the lack of good cause, and the issue of diligence, among other things mentioned by the Court while denying leave to amend here.
In the end, as the Rolling Stones never sang, 'Time Is Not On My Side, oh no, it's not.'
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