In May v. Mid-Century Insurance Co., 2006 OK 100, 151 P.3d 132 (Okla. 2006), a condominium owner suffered some fire damage to her unit. Id. at 134.
She sued Mid-Century, which was the insurer for her homeowner's association, for bad faith in refusing to pay her claim under the association's policy. Id.
The Oklahoma Supreme Court concluded that the carrier owed the plaintiff no legal duty under the policy, based largely on a loss-payment clause in the policy that provided, "We may adjust losses with the owners of lost or damaged property if other than you the named insured." Id. at 137 n.18, 140-41.
The court concluded that this clause gave the insurance carrier the exclusive choice to settle covered claims with the association or with the unit owners, thereby negating any contractual right running directly to the unit owners. Id. at 140-41