IN THE DISTRICT COURT OF GRADY COUNTY
STATE OF OKLAHOMA
TYLER CRABTREE and
KAITLYN N. CRABTREE,
Plaintiffs,
v.
ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY,
Defendants.
PETITION
COME NOW the Plaintiffs, Tyler Crabtree and Kaitlyn N. Crabtree ("Plaintiffs"), and for their cause of action against Defendant, Allstate Vehicle and Property Insurance Company ("Defendant" or "Allstate"), state as follows:
Parties, Jurisdiction, and Venue
1. Plaintiffs Tyler Crabtree and Kaitlyn N. Crabtree are residents of Grady County, State of Oklahoma.
2. Defendant Allstate is an insurance company, and at all times relevant hereto, Allstate was in the business of insurance in the State of Oklahoma.
3. The facts and basis of this action substantially arose and occurred in Grady County, Oklahoma.
4. Defendant Allstate is a foreign insurance company doing business in the State of Oklahoma and may be served through the Oklahoma Insurance Department located at 400 NE 50th Street, Oklahoma City, OK 73105, pursuant to 36 O.S. §622. This Court
therefore has jurisdiction over the parties and the subject matter of this action, and venue is proper under 12 O.S. §§ 137, 187.
Preliminary Statement and Factual Allegations
5. Plaintiffs were the named insureds covered by a policy of insurance (policy number 885 396 840) ("Policy") issued by Allstate, under which Allstate agreed to provide, inter alia, coverage for losses to their home. Plaintiffs' policy was issued on February 7, 2025, and was in full force and effect on April 25, 2025.
6. On April 25, 2025, Plaintiffs suffered a covered loss, to wit: water escaped from a pipe causing damage their home.
7. On or about April 28, 2025, Plaintiffs contacted Williams Plumbing, who performed a "Drain Service" described as "Cost of unstopping backed up drain line" at a cost of $154.50 which Plaintiffs paid.
8. Plaintiffs reported the loss to Allstate on April 29, 2025 resulting in Claim No. 0791367808.
9. Allstate's adjuster, Joseph Raby ("Raby") contacted Plaintiff Tyler Crabtree ("Mr. Crabtree") by email to obtain additional details about the loss and request documentation. Mr. Crabtree confirmed with Allstate that the backup of water from the drain line caused damage to his home and forwarded the invoice from his plumber confirming the same.
10. Plaintiffs Policy of insurance provides coverage for the dwelling1 under Coverage A:
______________________________
4. Dwelling—means the single-family building structure, identified as the insured property on the Policy Declarations, where you reside and which is principally used as a private residence.
1
Section I—Your Property
Dwelling Protection–Coverage A
Property We Cover Under Coverage A:
1. Your dwelling, including attached structures. Structures connected to your dwelling by only a fence, utility line, or similar connection are not considered attached structures.
2. Construction materials and supplies at the residence premises for use in connection with your dwelling.
3. Wall-to-wall carpeting fastened to your dwelling.
Property We Do Not Cover Under Coverage A:
1. Any structure, including fences, or other property covered under Other Structures Protection–Coverage B.
2. Land.
3. Satellite dish antennas and their systems, whether or not attached to your dwelling.
11. The Policy does not provide coverage for water "or any other substance that backs up through sewers or drains" under Coverage A:
Losses We Do Not Cover Under Coverages A and B:
A. Under Dwelling Protection–Coverage A and Other Structures Protection–Coverage B of this policy, we do not cover any loss which consists of, is caused by, or would not have occurred but for, one or more of the following excluded events, perils or conditions. Such loss is excluded regardless of: a) the cause or source of the excluded event, peril or condition; b) any other causes contributing concurrently or in any sequence with the excluded event, peril or condition to produce the loss; or c) whether the excluded event, peril or condition involves isolated or widespread damage, arises from natural, man-made or other forces, or arises as a result of any combination of these forces.
1. Flood, including, but not limited to, surface water, waves, tidal water or overflow of any body of water, or spray from any of these, whether or not driven by wind.
2. Water or any other substance that backs up through sewers or drains.
12. Plaintiffs purchased additional coverage with limits of liability of $5,000 for "Water Back-Up" coverage, with a $500 deductible:
Coverage detail for the property insured
<table>
<tr>
<th>Coverage</th>
<th>Limits of Liability</th>
<th>Applicable Deductible(s)</th>
</tr>
<tr>
<td>Dwelling Protection</td>
<td>$365,079</td>
<td>
• $7,301 Windstorm and Hail<br>
• $3,650 All other perils
</td>
</tr>
<tr>
<td>Other Structures Protection</td>
<td>$73,016</td>
<td>
• $7,301 Windstorm and Hail<br>
• $3,650 All other perils
</td>
</tr>
<tr>
<td>Personal Property Protection</td>
<td>$182,540</td>
<td>
• $7,301 Windstorm and Hail<br>
• $3,650 All other perils
</td>
</tr>
<tr>
<td>Additional Living Expense</td>
<td>Up to 24 months not to exceed $73,016</td>
<td></td>
</tr>
<tr>
<td>Family Liability Protection</td>
<td>$300,000 each occurrence</td>
<td></td>
</tr>
<tr>
<td>Guest Medical Protection</td>
<td>$5,000 each person</td>
<td></td>
</tr>
<tr>
<td>Building Codes</td>
<td>$18,254</td>
<td></td>
</tr>
<tr>
<td>Building Structure Reimbursement Extended Limits</td>
<td>Not purchased*</td>
<td></td>
</tr>
<tr>
<td>Roof Surfaces Extended Coverage</td>
<td>Included</td>
<td></td>
</tr>
<tr>
<td>Water Back-Up</td>
<td>$5,000</td>
<td>• $500 Water Back-Up</td>
</tr>
</table>
13. Plaintiffs purchased “Water Back-Up” coverage is more fully described in the specific policy “Water Back-Up Endorsement – AVP17-1” which covers accidental physicals loss under Coverage A and states:
The following endorsement changes your policy.
Please read this document carefully and keep it with your policy.
Water Back-Up Endorsement – AVP17-1
This form amends the Allstate House & Home Policy and replaces Water Back-Up Endorsement form AVP17.
For an additional premium and when your Policy Declarations indicates that Water Back-Up applies, the following coverage is added:
Water Back-Up-Coverage WB
We will cover sudden and accidental direct physical loss to property we cover under Dwelling Protection–Coverage A, Other Structures Protection–Coverage B and Personal Property Protection–Coverage C caused by water or any other substances within your dwelling or other building structures on the residence premises which:
a) backs up through sewers or drains located within the residence premises; or
b) overflows from a sump pump, sump pump well or other system located within the residence premises designed for the removal of subsurface water which is drained from a foundation area of a structure.
The insurance provided by Coverage WB shall be excess over any other insurance that also applies to a loss covered under this coverage.
14. Allstate determined the issue was a clogged line, and the damage was caused by “water overflow” and not covered by the terms of the Policy.
15. There is no provision of Plaintiffs policy regarding Coverage A that references “overflow” or “clogged” lines.
16. Plaintiff’s policy does not define “clogged”, “overflow”, or “back-up”.
17. After review of the water mitigation vendor’s report and the repair estimate of $3,463.51, Allstate maintained its original coverage decision.
18. Mr. Crabtree spoke with Ashraf Zayed (“Zayed”), Raby’s supervisor, on May 7, 2025. Zayed reviewed the file and upheld Raby’s decision. Mr. Crabtree disagreed.
19. Allstate closed the claim via letter to Plaintiffs on May 13, 2025, just 14 days after the claim was opened.
20. Upon information and belief, Allstate does not fully and adequately train their adjusters and claims handlers to recognize the difference between covered losses/not covered by the policy.
21. On the date of loss, Plaintiffs’ insurance policy was in full force and effect.
22. The Policy does not define the terms “water back-up” or “overflow”, nor does it disclose how it interprets those terms in deciding whether to afford coverage under the Policy.
23. The language of the Policy contains ambiguous words and phrases and technical language implicating Plaintiffs’ right to the reasonable expectations doctrine.
24. Upon information and belief, Plaintiffs contend that it is the corporate goal of Allstate to delay and deny water claims in order to maximize profit.
Count I: Breach of Contract by Allstate
25. Plaintiffs specifically adopt, incorporate, and re-plead by reference the proceeding paragraphs and factual allegations of this Petition.2
26. Allstate entered into a written insurance contract with Plaintiffs to provide coverage for damage to their home, including an endorsement specifically for water back-up coverage.
27. Plaintiffs were named insureds on the policy and paid all premiums due and performed all obligations under the policy of insurance with the reasonable expectation of receiving the benefit of their "water back-up" coverage.
28. On April 25, 2025, Plaintiffs suffered a water back-up loss causing damage which was insured under their Allstate policy. Pursuant to the terms of the subject Policy, this constituted a covered loss.
29. Pursuant to the policy and Oklahoma law, Allstate had a duty to reasonably investigate, handle, and pay Plaintiffs' losses when a water back-up claim was made.
30. That Allstate breached the policy when it failed to reasonably investigate, handle, and pay Plaintiffs' claim.
31. That the investigation and evaluation of Plaintiffs' claim was unreasonable and defective because Allstate never inspected the property and closed their investigation within two weeks of the claim.
Count II: Breach of the Duty of Good Faith and Fair Dealing by Allstate
2 12 O.S 2008; Gens v. Casady School, 2008 OK 5, 177 P.3d 565 (all allegations in the Petition are taken as true); Ashcroft v. Iqbal, 556 U.S. 662, 674, 129 S. Ct. 1937, 1947 (2009)(the court must consider the allegations contained within the four corners of the complaint); In re Zagg, Inc. Sec. Litig., 797 F.3d 1194, 1201 (10th Cir. 2015)(a court considers the complaint in its entirety).
32. Plaintiffs specifically adopt, incorporate, and re-plead by reference the proceeding paragraphs and factual allegations of this Petition.³
33. Allstate has a duty to deal fairly and in good faith with Plaintiffs and all their insureds.
34. Plaintiffs made demands on Defendant for payment of the policy benefits and met all conditions precedent for payment of those benefits.
35. Allstate breached its duty to Plaintiffs. The actions alleged herein violate the Allstate’s duty of good faith and fair dealing with the Plaintiffs.
36. Upon information and belief, Plaintiffs allege that it is the corporate goal of Allstate to increase its profits by reducing, delaying or avoiding the full and fair payment of claims.
37. Allstate failed to conduct an appropriate investigation into the loss.
38. Allstate unreasonably and unjustly denied to provide coverage and pay for Plaintiffs’ loss.
39. Despite the insurance policy being in full force and effect at the time of the loss, Allstate has denied coverage for the loss.
40. The acts and failures to act on the part of Allstate constitute a bad faith refusal or neglect to pay the claim of Plaintiffs. Allstate has failed to properly and in good faith consider the loss by its insured and has breached its duty of good faith and fair dealing with Plaintiffs.
41. Allstate acted in bad faith, as Plaintiffs had a contractual right of coverage for a covered loss such as the one sustained to Plaintiffs’ home.
³ 12 O.S 2008; Gens v. Casady School, 2008 OK 5, 177 P.3d 565 (all allegations in the Petition are taken as true); Ashcroft v. Iqbal, 556 U.S. 662, 674, 129 S. Ct. 1937, 1947 (2009)(the court must consider the allegations contained within the four corners of the complaint); In re Zagg, Inc. Sec. Litig., 797 F.3d 1194, 1201 (10th Cir. 2015)(a court considers the complaint in its entirety).
42. The acts and refusals to act by Allstate constitute bad faith, and both have caused damage to Plaintiffs, who reasonably expected coverage for their losses.
43. The acts of bad faith by Allstate include, but are not limited to, as a standard business practice:
a. Failure to properly conduct an investigation reasonably appropriate under the circumstances for the loss and claim of Plaintiffs;
b. Failure to conduct a reasonable investigation to determine when the loss occurred;
c. Failing to reasonably construe the known facts of Plaintiffs’ loss in their favor;
d. Failure to provide coverage for the damage to Plaintiffs’ home for the losses on April 25, 2025;
e. Failure to timely provide coverage for the loss and damage;
f. Failure to timely pay the claims of Plaintiffs;
g. Improperly denying Plaintiffs’ valid claims for coverage under the policy;
h. Refusal to pay the claims of Plaintiffs in relying upon an incomplete and unreasonable investigation;
i. Failing to adopt and implement reasonable standards for the prompt investigation and handling of claims arising under such policies;
j. Withholding payment of benefits knowing that claims for those benefits were valid;
k. Refusing to honor the claim by knowingly misconstruing and misapplying provisions of the Policy;
l. Refusing to honor the claim by knowingly misconstruing and misapplying standard insurance principles;
m. Refusing to honor the claim by knowingly misconstruing and misapplying Oklahoma law;
n. Allstate compelled its insured to hire a lawyer to recover amounts due under the policy where it was reasonably clear that the policy covered the loss;
o. Upon information and belief Allstate has a company-wide training and education program or Operation Guides that specifically train and educate its employees and/or agents and/or servants on how to handle water losses;
p. Allstate does not provide their employees and/or agents and/or servants with educational training, policies, guidelines, legal opinions, memoranda, operational manuals, coverage opinions, or legal analysis regarding how to reasonably interpret and/or apply the phrase “water back-up” or “overflow”;
q. Upon information and belief Allstate’s educational training, policies, guidelines, legal opinions, memoranda, operational manuals, coverage opinions, and legal analysis is structured and presented to their employees in such a way as to provide the employees with the verbiage and justification to deny claims as opposed to training and instructing their employees to find coverage under the policy regarding water losses;
r. Upon information and belief Allstate’s educational training, policies, guidelines, legal opinions, memoranda, operational manuals, coverage opinions, and legal analysis regarding Water Losses is not specifically structured to handle claims in a reasonable manner to find coverage, but instead, was created as “claim handling tactics” with an emphasis on the “value increase” and “financial trends”.
44. Upon information and belief, the above generic and specific allegations of bad faith are a company-wide/nation-wide/standardized business practice created, taught, and utilized by Allstate to deny valid water loss claims that should be covered under the terms of the paid for “Water Back-Up” endorsement to the policy.
45. Allstate’s obligations arise from both the express written terms of the policy, applicable Oklahoma law, and the Oklahoma Insurance Code. Allstate’s failure to implement and/or follow Oklahoma statutory law and the Insurance Code constitutes bad faith.
46. The conduct of Allstate, as described above, constitutes a breach of the duty of good faith and fair dealing.
47. As a direct and proximate result of Allstate’s breach of the duty of good faith and fair dealing, Plaintiffs’ claim(s) was/were unnecessarily delayed and denied. Said actions resulted in additional profits and financial windfall for Allstate.
48. As a result of Allstate’s conduct, Plaintiffs have sustained financial losses, mental and emotional distress, and have been damaged in an amount in excess of $75,000.00, exclusive of attorney’s fees, costs, and interest.
49. Allstate’s conduct was intentional, willful, malicious, and in reckless disregard of Plaintiffs’ rights, and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. Plaintiffs further allege Allstate enjoyed increased financial benefits and ill-gotten gains as a direct result of the wrongful conduct described herein, which resulted in the injury to Plaintiffs.
COMBINED PRAYER FOR RELIEF
WHEREFORE, premises considered, Plaintiffs pray for judgment in their favor and against Defendant Allstate for:
a) Payment for all contractual benefits for all coverages promised to Plaintiffs under the policy of insurance, with interest on all amounts due;
b) Actual and compensatory damages in an amount in excess of $75,000.00 (Seventy-Five Thousand Dollars);
c) Punitive damages in an amount in excess of $75,000.00 (Seventy-Five Thousand Dollars)
d) Pre and post-judgment interest, costs, reasonable attorney’s fees; and
e) Any other relief the Court deems just and equitable.
Respectfully submitted,
Jason Waddell, OBA No. 30761
Jason Waddell, PLLC
6422 North Santa Fe Avenue, Suite B
Oklahoma City, OK 73116
Telephone: (405) 232-5291
Facsimile: (405) 708-7871
[email protected]
ATTORNEY FOR PLAINTIFFS
ATTORNEY'S LIEN CLAIMED
JURY TRIAL DEMANDED
