Oklahoma county government self-insurer can’t be sued for bad faith

Oct. 22--A self-insurance group for Oklahoma county governments can't be sued for bad faith because it is entitled to sovereign immunity, the Oklahoma Supreme Court ruled Tuesday.

The ruling came in a case in which the Delaware County sheriff and commissioners are suing a self-insurance group in an effort to force it to pay a $13.5 million settlement. The settlement stems from a federal lawsuit filed by 15 female former county jail inmates who said the were sexually abused.

Still to be decided is a district court breach of contract lawsuit.

The Association of County Commissioners of Oklahoma Self-Insurance Group contends it should only have to pay $1 million less its costs in defending the lawsuit since the self-insurance agreement had a $1 million per occurrence cap.

Delaware County officials contend the self-insurance group should have to pay for the entire settlement. They argue that each of the sexual assaults on the 15 inmates should be considered a separate occurrence for insurance purposes.

How that issue is decided will determine how much of the $13.5 million settlement burden will fall on Delaware County taxpayers.

Gerard F. Pignato, attorney for the self-insurance group, said the Supreme Court's ruling is important because a bad-faith lawsuit can lead to huge damage awards.

The Supreme Court said it was expressing "no opinion" on the issue of whether the sexual assaults should be considered one occurrence or 15 for insurance purposes.

___

(c)2014 The Oklahoman

Visit The Oklahoman at www.newsok.com

Distributed by MCT Information Services