The Oklahoma Supreme Court has reversed lower court rulings that were in favor of a group insurer which denied McAlester Public School’s claims for damages after a broken water pipe resulted in flooding of parts of Parker Intermediate Center in 2013.
In a decision issued Tuesday, the Supreme Court vacated a previous opinion by the Oklahoma Court of Civil Appeals and also reversed a Pittsburg County District Court decision that had been in favor of the school’s insurance group — with the Supreme court’s new split-decision in favor of MPS.
This week’s Supreme Court decision orders the case remanded back to Pittsburg County District Court for further proceedings.
“This is great news,” MPS Superintendent Randy Hughes said Wednesday. Speaking of the costly repairs that had to be done at Parker after the flooding event, Hughes said “Everything was repaired with local money.”
Hughes is hoping MPS can now recoup some of those costs.
Parker was insured in 2013 through the Oklahoma Schools Risk Management Trust, also known as OSMRT — an inter-local cooperative consisting of public schools and alternative education cooperatives which pool their property casualty risks through a member-funded self-insurance program.
On August 13, 2013, a water pipe under the school broke, causing extensive damage to the school and forcing the evacuation of students and MPS personnel.
The event resulted in the flooding of a number of classrooms. Parts of the building cracked and some of the windows cracked or popped from their sills.
It all resulted in MPS temporarily holding some Parker classes at the alternate site of Saint John’s Catholic Church.
Since the school had an insurance policy through OSMRT, MPS administrators sought a claim to cover the damages. OSMRT denied the claim, contending the pipe had been broken by a movement of the earth and high-pressure water expulsions — and maintaining the school was not covered as a result.
OSMRT not only denied the claim, but also brought a declaratory judgment action in Pittsburg County District Court holding that the MPS Plan of Coverage did not cover damage from the broken water pipe.
In response, MPS filed a counterclaim for a breach of contract and sought indemnification through its insurer to pay for losses the school incurred. MPS attorneys sought damages “in an amount in excess of $75,000.”
Pittsburg County Associate District Judge Tim Mills “granted summary judgment for Oklahoma Schools Risk Management on its request for declaratory relief and against McAlester Public Schools on its indemnity claim,” the Supreme Court ruling notes.
MPS then appealed the decision to the Oklahoma Court of Criminal Appeals, which affirmed the judgment from Pittsburg County District Court in favor of the insurer.
However, the Oklahoma Supreme Court disagreed in its 5-4 ruling issued this week in favor of MPS on the school district’s appeal.
“We agree with McAlester schools that OSMRT failed to show a policy-based exclusion to coverage for the event based upon earth movement and flow of water exclusions,” the assenting Supreme Court justices stated in their opinion.
McAlester attorneys Joe Ervin and Bill Ervin, of the Ervin & Ervin law firm, represented MPS, with Oklahoma attorney Rex Travis. Joe Ervin credited Travis with his work on the case, along with the work of individuals from MPS.
“It represents the work of a lot of people associated with the schools,” Joe Ervin said of the decision in favor of MPS. “It will have a positive financial impact on the school.”
Hughes is hoping that’s sooner rather than later.
“We will be checking on all the details,” Hughes said. “I am glad it was in our favor.”
Contact James Beaty at firstname.lastname@example.org