|Opinion:||Chimento v. Gallagher Benefit Services, 2023 OK 22|
|Subject Matter:||Notification of Suspected Fraud–Insurance|
|Date Decided:||March 21, 2023|
|Trial Court:||District Court of Tulsa County; Judge Cantrell|
|Route to this Court:||Petitioner and Respondents filed petitions for certiorari on the certified interlocutory order.|
|Facts:||Petitioner worked for Respondent at his insurance agency, Scott McCoy Insurance Agency (SMIA). One of Petitioner’s responsibilities was to overlook the Tribal Sponsorship Program, through which SMIA assisted Native American Tribes in procuring health insurance for their employees. Petitioner would receive premium invoices for tribal clients and forward them to the Tribes. Upon receipt, the Tribes would pay a lump sum to SMIA to cover the premiums.|
SMIA was acquired by Arthur J. Gallagher & Co. (AJG), who kept Petitioner in her role of performing insurance-related services under Respondent continuing as her supervisor in the subsidiary Gallagher Benefit Services (GBS). The use of the Tribal Account continued under Petitioner’s administration. Midfirst Bank contacted Respondent to inform him that the Tribal Account was overdrafted to the amount of $51,000.00. Respondent inquired of Petitioner as to why the account was overdrafted. Shortly after, Petitioner resigned her employment with AJG. Eight months later, on November 16, 2017, Respondent filed a report with Tulsa Police Department (TPD) alleging that Petitioner had embezzled about $51,000 from SMIA and AJG/GBS.
On April 5, 2018, the Tulsa County District Attorney filed a criminal information charging Petitioner for felony embezzlement. Two months later, the District Attorney dismissed the charges for insufficient evidence. In July 2019, Petitioner submitted an application to the Oklahoma Insurance Department to renew her resident insurance producer license. The application was denied, citing suspected violations of the Oklahoma Producer Licensing Act in 36 O.S.2011 § 1435.13(A). Oklahoma Insurance Department relied on information obtained by the Oklahoma Anti-Fraud Division, which derived from the TPD investigation. On October 23, 2019, the Oklahoma Insurance Department issued a Notice of Hearing and Order to Show Cause to Chimento alleging numerous violations of the Oklahoma Insurance Code, including acting as a third-party administrator without a license, mishandling premium payments, making false entries into accounting books, and engaging in fraudulent and dishonest conduct.
|Standard of Review:||The Court’s review of the trial court’s grant of summary judgment is de novo. Tiger v. Verdigris Elec. Coop., 2016 OK 74, ¶ 13. The questions posed in the trial court’s certified interlocutory order are questions of law, which are subject to de novo review. Lincoln Farm, L.L.C. v. Oppliger, 2013 OK 85, ¶ 12. De novo review involves a plenary, independent, and non-deferential examination of the issues presented. Benedetti v. Cimarex Energy Co., 2018 OK 21, ¶ 5.|
|Analysis:||The first question that the Court answered was whether Respondents’ statements to law enforcement are entitled to a qualified privilege. The foundation for this issue was whether the Court had impliedly overruled three previous cases granting qualified immunity only to statements made to law enforcement. Respondents argued that it impliedly overruled the prior decisions. In Belshiers v. Allen, 1915 OK 182, the Court ruled that communications to a sheriff accusing plaintiff of robbing a bank was a qualified privilege, which triggered privilege when the statement was made in good faith with an honest belief that the statement was true and there was no malice toward the accused. In Johnson v. Inglis, 1942 OK 80, the Court determined that statements made to law enforcement were only privileged if they qualified. Finally, in Magness v. Pledger, 1959 OK 1, the Court ruled that defendants’ petition to the Attorney General to investigate the plaintiff qualified for privilege because the statements were made to law enforcement. Defendants argued that Kirschstein v. Haynes, 1990 OK 8, granted absolute immunity to statements made to law enforcement. In that case, the defendant requested an affidavit from a physician declaring the plaintiff as the defendant’s parent. After publishing the affidavit’s contents to several relatives, the plaintiff alleged several torts against the defendant. Those statements were absolutely immune because the affidavit was from a physician to a patient for the purpose of getting a delayed birth certificate. The Court rejected the argument that Kirschstein impliedly overruled these three cases because Kirschstein only applies to those communications made prior to judicial proceedings, despite the Court of Civil Appeals’ decision in White v. Basnett, 1985 OK CIV APP 10 (cited by Kirschstein) granting absolute immunity to statements made to law enforcement.|
Second, because defendants’ statements to the Oklahoma Insurance Department did not fall under the “communications made preliminary to proposed […] quasi-judicial proceedings,” they had to be covered by 36 O.S.supp.2012 § 363(B). Section 363(B) provides qualified immunity from civil actions for individuals who furnish information to the Department regarding fraudulent insurance activity. In Loven v. Church Mutual Ins. Co., 2018 OK 68, section 363(B) was applied to the insurance company’s response to an inquiry from the Anti-Fraud Unit of the Oklahoma Insurance Department when it made allegations that the plaintiff was operating as an unlicensed public adjuster. Just as in Loven, the purpose of 36 O.S.supp.2016 § 363 was to grant qualified immunity from civil action for those individuals who furnish information to the Insurance Department regarding insurance fraud. Therefore, the statements to Tulsa Police Department and the District Attorney’s Office were entitled to qualified privilege and the statements to the Oklahoma Insurance Department were entitled to qualified privilege.
|Outcome:||Affirmed in part, reversed in part; Remanded for further proceedings consistent with this opinion.|
|Vote:||8-0. Rowe, V.C.J. (author), Kauger, J. (by separate writing), Winchester, Edmondson, Gurich, Darby, and Kuehn, JJ., concur. Combs, J. concurs in the result. Kane, C.J., not participating.|
|Other:||Justice Kauger, joined by Justices Gurich and Kuehn, concurred in separate writing, pointing out that Kirschenstein applied absolute privilege rather than qualified privilege, which created much confusion as to its application in other cases. The Justices disagreed with the Majority’s characterization of the statements in Kirschenstein, and believed that Kirschenstein did not involve quasi-judicial proceedings and was wrongly decided. Thus, the justices would overrule Kirschenstein.|