Barbara Merritt v. Farmers Casualty Insurance Company

DISTRICT COURT OF OKLAHOMA COUNTY STATE OF OKLAHOMA BARBARA MERRITT, Plaintiff, v. FARMERS CASUALTY INSURANCE COMPANY; DON R. CUNNINGHAM INSURANCE AGENCY, INC.; and CAL SMITH INSURANCE AGENCY, LLC; Defendants. PETITION COMES NOW Plaintiff, Barbara Merritt ("Plaintiff" or "Ms. Merritt"), by and through her attorney, and for her causes of action against Defendants Farmers Casualty Insurance Company ("Farmers"), Don R. Cunningham Insurance Agency, Inc. ("Cunningham"), and Cal Smith Insurance Agency, LLC ("Cal Smith"), alleges and states as follows: 1. Plaintiff Barbara Merritt is an individual residing in Oklahoma County, Oklahoma. Ms. Merritt is a disabled senior citizen who, at all relevant times prior to the fire, owned and occupied the residential property located at 3029 NW 67th Street, Oklahoma City, Oklahoma 73116. Ms. Merritt continues to own the property but has been displaced from her home since the date of the fire. 2. Defendant Farmers Casualty Insurance Company is a foreign insurance corporation authorized to transact business in the State of Oklahoma. At all relevant times, Farmers insured Ms. Merritt’s residence under a homeowners insurance policy. 3. Defendant Don R. Cunningham Insurance Agency, Inc. is an Oklahoma domestic for-profit corporation with its principal place of business in Oklahoma County, Oklahoma. At all relevant times until his termination from Farmers in approximately August 2024, Cunningham served as Ms. Merritt’s exclusive Farmers insurance agent responsible for procuring, servicing, and maintaining her insurance coverage, acting within the scope of his authority in advising regarding coverage, making policy changes, and entering information into Ms. Merritt’s underwriting file maintained by Farmers. 4. Defendant Cal Smith Insurance Agency, LLC is an Oklahoma domestic limited liability company with its principal place of business in the State of Oklahoma. Cal Smith assumed servicing responsibility for Ms. Merritt’s Farmers policy after Cunningham’s departure in approximately August 2024. JURISDICTION AND VENUE 5. This Court has jurisdiction over all claims asserted herein. 6. Venue is proper in Oklahoma County because the insured property is located in Oklahoma County, the acts and omissions giving rise to Plaintiff’s claims occurred in substantial part in Oklahoma County, Defendant Cunningham maintains its registered office in Oklahoma County, and Defendant Farmers is authorized to transact business in Oklahoma. TIMELINESS OF THIS ACTION 7. This action is timely filed under all applicable statutes of limitation and equitable doctrines including waiver, estoppel, and tolling. 8. To the extent Defendants assert that any contractual provision shortens the limitations period for claims arising from the February 24, 2025 loss, Plaintiff disputes the enforceability of any such provision as applied to her extra-contractual tort claims or any other claims asserted herein, which are governed by the applicable statutory limitations periods, not contractual provisions. See Lewis v. Farmers Ins. Co., 681 P.2d 67 (Okla. 1983). 9. Farmers’ own conduct constitutes waiver and/or estoppel of any contractual limitation period. Throughout the claims process and continuing through the weeks immediately preceding this filing, Farmers continued active claim evaluation, issued supplemental payments, retained third-party inspectors, requested documentation from Plaintiff, and proposed settlement discussions, all while simultaneously sending repeated communications asserting suit-limitation deadlines. 10. When Plaintiff’s counsel informed Farmers that Plaintiff disputed the provision’s enforceability but nevertheless requested a standard 90-day tolling agreement to allow the claim process to continue without unnecessary litigation, Farmers declined. Farmers’ refusal to extend a routine courtesy, while continuing active claim evaluation, forced this filing. GENERAL FACTUAL ALLEGATIONS A. The Policy and Covered Loss 11. At all relevant times, Farmers issued and maintained a homeowners insurance policy providing coverage for Ms. Merritt’s residence at 3029 NW 67th Street, Oklahoma City, Oklahoma, including coverage for the dwelling, personal property, and additional living expenses. 12. Ms. Merritt was insured by Farmers and paid premiums to Farmers continuously for over twenty-five years. Her mother insured the same property through Farmers for over a decade before that. Ms. Merritt paid all premiums when due and complied with all conditions of the policy, including timely notice of loss, cooperation with Farmers’ investigation, submission of proof of loss, and access to the property for inspection. 13. On February 24, 2025, Ms. Merritt’s residence suffered an accidental fire loss. The fire was not caused by any act or negligence of Ms. Merritt or any other person. The fire was a covered peril under the policy. 14. As a result of the fire, Ms. Merritt was displaced from her home. Ms. Merritt is physically disabled and relied on the home’s accessibility features for daily living. She required prompt accessible temporary housing and immediate assistance with Additional Living Expense benefits under the policy. B. Cunningham’s Pre-Loss Misconduct 15. Cunningham served as the insurance agent for Ms. Merritt for approximately twenty-five years. Cunningham originally served as the agent for Ms. Merritt’s mother, Queenie Merritt, who owned and insured the property through Farmers and Cunningham before Ms. Merritt assumed ownership in approximately 2000. Ms. Merritt continued with Cunningham based on the family’s long-standing relationship and her trust in him as her insurance professional. In that capacity, Cunningham was responsible for procuring and maintaining Ms. Merritt’s homeowners insurance coverage and was the exclusive point of contact between Ms. Merritt and Farmers regarding her policy. 16. In January 2022, Ms. Merritt reported storm damage to her roof, rear wooden deck, and exterior trim and siding to Cunningham at her home and requested that claims be submitted to Farmers. 17. Cunningham made material misrepresentations to Ms. Merritt regarding her eligibility to file claims. Among other things, Cunningham falsely stated that Ms. Merritt’s roof had been replaced in 2015, when in fact it had been replaced no later than 2009, and used this false statement as a basis for refusing to submit a roof claim. 18. Cunningham refused to submit or process claims for the storm damage to the deck, roof, and exterior, telling Ms. Merritt that filing claims was not possible. This was false. The damage Ms. Merritt reported was caused by covered weather events and was eligible for coverage under the policy. Ms. Merritt relied on Cunningham’s representations and did not pursue the claims. 19. After refusing to submit the deck claim, Cunningham added a Private Structures Exclusion to Ms. Merritt’s policy that removed the rear wooden deck from coverage. This exclusion was added without Ms. Merritt’s knowledge or consent. She was never informed that the structure for which she had attempted to submit a claim had been quietly removed from coverage. 20. Cunningham entered false information into Ms. Merritt’s underwriting file maintained by Farmers, including fabricated entries regarding the property’s electrical wiring that did not reflect the property’s actual condition. Ms. Merritt had no knowledge that these entries were made. These false entries subsequently triggered an unwarranted arson and fraud investigation when Ms. Merritt later filed a fire claim. 21. Ms. Merritt also maintained an auto insurance policy through Farmers and Cunningham. A phantom auto claim appearing in 2019 was entered in Ms. Merritt’s file during Cunningham’s tenure. Ms. Merritt has no knowledge of any such claim, and the entry has never been explained. 22. Cunningham’s agency relationship with Farmers ended abruptly in approximately August 2024. Upon information and belief, Farmers terminated Cunningham and was aware of Cunningham’s misconduct at or before the time of his departure. Despite this knowledge, Farmers took no steps to audit Cunningham’s files or remediate harm to policyholders affected by his conduct. 23. Ms. Merritt did not discover, and had no reasonable means of discovering, the falsity of Cunningham’s representations, the unauthorized exclusion, or the fabricated underwriting entries until the post-fire claims process in 2025. The misrepresentations were made by her trusted agent, the exclusion was added without notice, and the false underwriting entries were contained in internal records not accessible to Ms. Merritt. C. Cal Smith’s Involvement 24. Cal Smith assumed servicing responsibility for Ms. Merritt’s policy after Cunningham’s departure in approximately August 2024, inheriting the policy file containing Cunningham’s fabricated entries and unauthorized exclusion. Having undertaken to service the policy and to modify its terms, Cal Smith owed Ms. Merritt a duty to exercise reasonable care in performing those undertakings. 25. Cal Smith failed to review, audit, or correct the inherited file for material errors or irregularities. The false entries, including the fabricated electrical wiring information and the unauthorized deck exclusion, remained in the file when the fire occurred. 26. Cal Smith’s agent assigned to Ms. Merritt’s account had prepared and provided Ms. Merritt with a new Farmers policy quote that did not include the deck exclusion, confirming that the exclusion was recognized as unjustified. Ms. Merritt had not yet accepted the new quote when the fire occurred on February 24, 2025. 27. Farmers and its adjusters relied on the uncorrected fabricated entries in handling Ms. Merritt’s fire claim, including in the decision to initiate an arson and fraud investigation based on Cunningham’s false underwriting entries. D. Farmers’ Claims Handling Conduct 28. In the early morning hours of February 25, 2025, within approximately twenty-four hours of the fire, Ms. Merritt’s caretaker and authorized representative uploaded to Farmers’ claim portal an eight-page written communication. That letter described in detail Ms. Merritt’s permanent disability, her reliance on a walker for all mobility, her immediate displacement to a hotel, and her urgent need for accessible temporary housing, Additional Living Expense benefits, and other policy benefits. The letter specifically requested “expedited claim processing,” “prompt approval of emergency funds for temporary housing and immediate needs,” and “immediate approval for extended temporary housing benefits.” It detailed the accessibility challenges of hotel living for a person with Ms. Merritt’s physical limitations and requested “special consideration for disability factors” in evaluating living expense benefits. Later that same business day, the assigned adjuster confirmed that he had received and reviewed this communication. From that point forward, Farmers had actual, contemporaneous, written knowledge of Ms. Merritt’s disability, her displacement, and the urgency of her housing needs. 29. For reasons that have never been explained, the adjuster Farmers assigned to Ms. Merritt’s claim was not a local Oklahoma adjuster but an adjuster based in Texas whose Farmers job title was “Special Adjuster.” The arson investigator Farmers retained was also from Texas. Both traveled from central Texas to Oklahoma City, and the claim did not move forward while Farmers waited for them to arrive and conduct their inspections. 30. No Oklahoma-based Farmers personnel worked on or advanced Ms. Merritt’s claim during this period. 31. Upon information and belief, the assignment of an out-of-state Special Adjuster to Ms. Merritt’s routine residential fire claim was connected to the fact that the claim was filed on a policy serviced by Cunningham, whose agency relationship with Farmers had ended abruptly approximately six months earlier under circumstances suggesting Farmers was aware of concerns regarding his conduct. 32. Ms. Merritt’s claim was not treated as a routine covered loss. It was treated, from its inception, as a matter requiring special investigation. The 72-Day Housing Benefit Failure 33. The Special Adjuster demonstrated familiarity with fraud investigation procedures and with the contents of Ms. Merritt’s underwriting file, including the false entries Cunningham had placed there, which he identified and openly discussed with Ms. Merritt and her caretaker. 34. Yet this same adjuster provided fundamentally incorrect guidance regarding Additional Living Expense benefits. He told Ms. Merritt’s caretaker that Farmers does not pay ALE benefits in advance and that Ms. Merritt would need to gather receipts over time and prepare individual written statements justifying each expense for potential later reimbursement. This was wrong. 35. The adjuster failed to disclose the existence of Fair Rental Value benefits available under the policy, which would have provided a flat monthly housing allowance without the burden of itemized documentation. At no point during the adjuster’s communications with Ms. Merritt or her caretaker did the adjuster explain, offer, or even reference the FRV option. 36. A Special Adjuster sophisticated enough to identify fabricated underwriting entries and discuss fraud investigation procedures either did not know that a basic housing benefit existed under the policy he was adjusting, or knew and chose not to disclose it. The contrast is consistent with an adjuster whose assignment was to investigate a flagged file, not to service a displaced policyholder’s immediate needs. 37. Under either explanation, the adjuster’s guidance directed a displaced, disabled policyholder away from the benefit she was entitled to and toward a burdensome process that deferred payment indefinitely. 38. The following day, on or about February 26, 2025, a false internal file note was entered into Farmers’ claim file. 39. Ms. Merritt and her representative had no knowledge of this note until a year later, when Farmers’ counsel voluntarily disclosed its substance in a February 2026 letter. 40. The note stated that Ms. Merritt’s caretaker, just two days after the fire and one day after uploading the eight-page letter urgently requesting immediate housing assistance, told the adjuster that he and Ms. Merritt would “think about” whether any housing or ALE assistance was even needed. This characterization is overwhelmingly contradicted by the written record already in Farmers’ file. The suggestion that Ms. Merritt’s representative, having submitted an eight-page letter begging for immediate help, turned around just one day later and told the same adjuster that they would “think about” whether any help was even needed is not credible. 41. That false file note became Farmers’ sole stated justification for withholding all housing benefits from Ms. Merritt for approximately seventy-two days. In February 2026, Farmers’ counsel relied upon that note to affirmatively and emphatically blame Ms. Merritt’s representative for the entire seventy-two-day delay, a position Farmers has maintained to the date of this filing and has never retracted or corrected. 42. Ms. Merritt, a disabled senior citizen displaced from her accessible home, received no ALE or FRV payment of any kind during that period. She struggled financially, physically, and emotionally throughout those seventy-two days while Farmers withheld benefits she had begged for in writing within twenty-four hours of the fire. 43. She was not informed that the FRV option existed until a replacement adjuster took over the claim in approximately May 2025. 44. In the weeks following the Special Adjuster’s incorrect guidance, Ms. Merritt’s caretaker did exactly what the adjuster had instructed: he gathered receipts, prepared written justifications, and requested detailed information regarding each living expense, hoping that Farmers might eventually reimburse the costs to Ms. Merritt. 45. When those efforts appeared in April 2025 emails from Ms. Merritt’s caretaker to Farmers, Farmers’ counsel later cited those emails as evidence that Ms. Merritt’s representative had caused the entire delay. 46. The emails showed the opposite. They showed a caretaker following the wrong instructions that Farmers’ own adjuster had given because no one at Farmers had told him that a flat monthly FRV payment was available. Moreover, the April emails were themselves evidence that Ms. Merritt and her caretaker lacked correct information about the housing benefits available to her. 47. Farmers, upon receiving those emails, should have recognized that its policyholder was operating under incorrect guidance about her own benefits and corrected the misinformation. Instead, Farmers did nothing. No one called. No one emailed. No one informed Ms. Merritt or her caretaker that the FRV option existed and that the burdensome receipt-gathering process was unnecessary. 48. Indeed, during this same period in April 2025, the claim had no assigned adjuster at all, because Farmers had allowed the claim to go entirely unmonitored for approximately three weeks following the Special Adjuster’s departure. 49. The complete sequence is this: Farmers’ Special Adjuster gave wrong guidance about housing benefits. The next day, a false file note was entered into Farmers’ file stating that Ms. Merritt’s caretaker would “think about” whether any ALE assistance was even needed. Ms. Merritt’s representative, having received no other guidance, followed the Special Adjuster’s incorrect instructions and spent weeks gathering receipts and writing justifications. Farmers received those communications, recognized that the caretaker was operating under a misunderstanding of the benefits available, and did nothing to correct it. 50. Nearly a year later, Farmers’ counsel cited the false file note and those same communications as proof that Ms. Merritt and her caretaker bore sole responsibility for seventy-two days of nonpayment to a displaced disabled senior who had begged for housing assistance in writing the day after the fire. To date, Farmers maintains this position. It has never acknowledged the Special Adjuster’s incorrect guidance, never explained the false file note, and never accepted any responsibility for the delay. 51. In addition to the false file note, Farmers prepared correspondence dated February 27, 2025, one day after the false file note, purportedly addressed to Ms. Merritt regarding housing benefits. This letter was never sent to Ms. Merritt or her caretaker. A Farmers representative later admitted in writing that the letter was never provided or sent. The letter was not referenced or produced at any point during the initial months of claims handling and first surfaced in approximately May 2025, when a Farmers representative cited it in an email communication while attempting to retroactively reduce Ms. Merritt’s agreed Fair Rental Value benefits. No explanation has been provided for why the letter was prepared but never sent, whether it was in fact prepared on the date it bears, why it was not referenced for months, or why it appeared for the first time only after questions were raised about the delay in housing benefits. Detailed inquiries regarding the origin, history, and circumstances of this letter were sent to Farmers. Farmers has refused to respond to any of them. The Arson Investigation 52. Within the first week following the fire, Farmers initiated an arson and fraud investigation of Ms. Merritt’s claim. The investigation was triggered, at least in part, by fabricated entries in Ms. Merritt’s underwriting file placed there by Cunningham, including false information that the home had modern, code-compliant electrical wiring updated after 2000. An electrical fire in a home with supposedly new wiring was treated as suspicious. In fact, the home’s electrical system was visibly old and had not been updated in decades. Cunningham’s false entry created a false anomaly that did not exist. 53. Ms. Merritt’s caretaker immediately disputed the false wiring entry with the Special Adjuster and memorialized that dispute in a written communication prepared just hours after the phone conversation in which the dispute occurred. That written communication, which remains in Farmers’ claim file, documents that the Special Adjuster himself identified the false wiring information as having been entered by Cunningham. The Special Adjuster further disclosed during that same conversation that Cunningham’s false entries in the underwriting file had caused the entire claim to be flagged and had necessitated the retention of the arson investigator from Texas. This is not inference. It is a contemporaneous written record of what Farmers’ own Special Adjuster told Ms. Merritt’s caretaker in the days immediately following the fire: that Cunningham’s fabricated entries were the reason the claim was being investigated rather than processed. 54. Despite this record, Farmers’ counsel has taken the position in February 2026 correspondence that there is no connection whatsoever between Cunningham’s pre-fire misconduct and Farmers’ handling of Ms. Merritt’s claim. Counsel has characterized the Cunningham issues as “completely separate and distinct” from the claims-handling dispute. This position is demonstrably false on the face of Farmers’ own file. Farmers’ own Special Adjuster told Ms. Merritt’s caretaker that Cunningham’s fabricated entries caused the claim to be flagged and triggered the arson investigation. That statement was documented in writing the same day it was made. The writing is in Farmers’ possession. For counsel to maintain that Cunningham’s misconduct bears no connection to the way this claim was handled is to deny what Farmers’ own adjuster said, in words that were documented the same day and that remain in Farmers’ own file. 55. The arson investigation subjected Ms. Merritt, a disabled senior citizen who had just lost her home to an accidental fire, to the indignity and distress of being treated as a suspected arsonist and fraud. There was no legitimate basis for this investigation. The Oklahoma City Fire Department had already determined the fire was accidental. The fabricated underwriting entries that triggered the investigation were false, and Farmers’ own adjuster knew they were false and knew who had placed them there. The investigation nevertheless proceeded and caused material delay in the processing and payment of Ms. Merritt’s claim. During the weeks the investigation was pending, Farmers sent communications referencing the contractual suit-limitation provision, initiating a pattern of deadline warnings that continued throughout the claims process while Farmers’ own conduct consumed the very time those warnings referenced. Adjuster Departure and Claim Abandonment 56. In early April 2025, the Special Adjuster departed Farmers. Farmers had weeks of advance notice of his departure. Despite that notice, Farmers made no arrangements for continuity of Ms. Merritt’s claim. No replacement adjuster was identified. No transition of the file was conducted. No one at Farmers contacted Ms. Merritt or her caretaker to inform them that their adjuster was leaving or that a new point of contact would be provided. The claim was simply left without any Farmers representative assigned to it. 57. For approximately three weeks, the claim went entirely unmonitored. During that period, Ms. Merritt’s caretaker sent emails, letters, and placed phone calls to Farmers seeking information about the status of the claim and the identity of a replacement adjuster. No one at Farmers responded to any of these communications in any form. Written inquiries specifically requesting the new adjuster’s information were sent on April 15, 2025 and April 22, 2025. Neither received a response. A fully open fire claim belonging to a disabled senior citizen who had been displaced from her home, who was still awaiting housing benefits, and whose claim was still under active investigation, sat in the files of one of the largest insurance companies in the country with no human being assigned to look at it, respond to it, or advance it in any way. Ms. Merritt’s caretaker was left sending messages into silence while Ms. Merritt continued to struggle with displacement, disability, and financial hardship. 58. The matter was not addressed until Ms. Merritt’s caretaker escalated the issue to Farmers management on approximately April 25, 2025. The claim was not reassigned until on or about April 28, 2025. Throughout this three-week abandonment period, the contractual suit-limitation clock continued to run, and Farmers took no steps to extend or toll any deadlines to account for three weeks of its own inaction. An insurer that abandons a claim for three weeks while a filing deadline runs cannot in good faith later invoke that deadline against the policyholder whose claim it abandoned. 59. In February 2026, Farmers’ counsel took the position that this three-week period of complete unresponsiveness had no negative effect on Ms. Merritt or her claim. This position ignores reality. During those three weeks, Ms. Merritt had no one at Farmers to contact about her housing situation, no one processing her benefits, no one evaluating her damages, and no one advancing the claim toward resolution. A disabled senior policyholder displaced from her home does not experience three weeks of total abandonment by her insurer without consequence. The claim lost three weeks of progress that it could not afford to lose, and Ms. Merritt endured three additional weeks of uncertainty, unanswered communications, and the knowledge that the company she had paid premiums to for over twenty-five years could not be troubled to assign a single person to her file. Fair Rental Value Manipulation 60. In approximately May 2025, after Ms. Merritt had gone more than seventy days without receiving any housing benefit of any kind, Farmers finally informed Ms. Merritt’s caretaker that Fair Rental Value benefits were available under the policy. Farmers offered a monthly FRV rate in writing. Ms. Merritt accepted in writing. The agreement was complete. 61. Farmers then attempted to retroactively reduce the agreed FRV amount by approximately one thousand dollars per month. To justify this reduction, Farmers produced for the first time the previously unsent February 27, 2025 letter, a letter that had never been sent to Ms. Merritt, had never been referenced during the initial months of claims handling, and had surfaced only now, at the precise moment Farmers needed a justification to claw back benefits from a disabled senior who had already gone more than two months without any housing payment at all. Only after Ms. Merritt’s caretaker objected in writing, escalated the matter to Farmers management through letters sent by certified mail, overnight delivery, and email, did Farmers concede and honor the FRV amount that had already been agreed to in writing. An insurer that makes a written offer, receives a written acceptance, and then attempts to retroactively reduce the agreed amount by one thousand dollars per month is not administering a claim in good faith. It is testing whether the policyholder has the resources and resolve to fight back. 62. But Farmers did not stop there. Immediately after the failed clawback attempt, the Farmers representative responsible for FRV payments then conditioned the release of the already long-overdue FRV benefits on Ms. Merritt demonstrating that repair progress was being made on the fire-damaged home. The representative stated this condition explicitly in an email communication. FRV coverage under the policy is not contingent on repair progress. There is no policy provision requiring a policyholder to demonstrate that repairs are underway as a condition of receiving housing benefits. The condition was fabricated. 63. The timing made the demand not merely improper but impossible to satisfy. Ms. Merritt had possessed the dwelling repair funds for only days at the time the demand was made. She could not have made meaningful repair progress on a fire-damaged home when the funds to pay for those repairs had arrived days earlier. Moreover, the claim had just emerged from a three-week period during which Farmers had assigned no adjuster, no representative, and no personnel of any kind to the file. Farmers had contributed nothing to advancing Ms. Merritt’s repairs during that period, had done nothing to help her obtain contractor estimates or begin the repair process, and now demanded proof of repair progress that Farmers’ own delays had made impossible to show. The representative was demanding results from a process that Farmers itself had prevented from beginning. 64. This pattern of offering a benefit, then attempting to reduce it or condition it on requirements not found in the policy, recurred throughout the claims process. Farmers repeatedly extended benefits with one hand and reached back with the other, treating each payment not as an obligation owed to a policyholder under a contract she had paid for, but as a concession to be minimized, delayed, conditioned, or clawed back at every opportunity. The Eleven-Month Supplemental Delay 65. In the same eight-page letter uploaded to Farmers’ claim portal on February 25, 2025, Ms. Merritt’s caretaker informed Farmers that the home’s electrical power had been surging severely on the night of the fire and that substantial supplemental damage claims were anticipated once power was eventually restored to the property. The letter stated this explicitly and in detail, explaining more than once and in more than one way that the full extent of damage to appliances, electrical systems, and other components of the home would not be known until power was restored and those systems could be tested and evaluated. From the first business day after the fire, Farmers had written notice that supplemental claims were coming, that the scope of those claims depended on power restoration, and that power restoration was the event that would trigger the need for further inspection and evaluation. 66. Power was not restored to the property until approximately November 2025, and Farmers was informed when it was accomplished. Farmers had known for months that this was the triggering event. From that point forward, there was no barrier to Farmers retaining inspectors, evaluating supplemental damages, and issuing supplemental estimates so that repairs could proceed and the claim could move toward resolution. 67. Farmers did nothing. For approximately three months after being informed that the triggering event it had been warned about since February 2025 had occurred, Farmers took no action to advance the supplemental damage evaluation. Farmers did not retain third-party inspectors. Farmers did not schedule site visits. Farmers did not issue supplemental estimates. Farmers did not contact Ms. Merritt or her caretaker to discuss next steps. The claim sat idle in Farmers’ files. 68. During this same period, Ms. Merritt’s caretaker and counsel were not idle. Written communications were sent to Farmers throughout the last quarter of 2025 regarding a host of issues, including the supplemental claims, the non-renewal dispute, the approaching depreciation recovery deadline, updates on the status of house repairs, issues relating to the roof condition and history, and numerous other matters that Ms. Merritt and her caretaker were actively addressing while Farmers sat idle for months. Many of these communications went unanswered or received delayed and incomplete responses. The inaction was not mutual. Ms. Merritt was doing everything within her power to advance the claim. Farmers was doing nothing to advance it. 69. Nor was Farmers inactive in all respects. During the same months in which Farmers failed to inspect supplemental damages or issue supplemental estimates after the power was restored, Farmers found ample time and resources to issue a notice of non-renewal of Ms. Merritt’s policy, to process and collect a renewal premium of $5,136, to require Ms. Merritt to sign a roof attestation form under threat of losing coverage, to report adverse information about Ms. Merritt to industry databases that rendered her uninsurable in the competitive marketplace, and to send repeated communications asserting the contractual suit-limitation provision. Farmers had the institutional capacity to act when acting served Farmers’ interests. It simply chose not to act when acting would have served Ms. Merritt’s. 70. Farmers did not retain third-party inspectors to evaluate supplemental damages until approximately February 2026, nearly one year after the fire. Farmers did not issue supplemental damage estimates until that time. When it finally did, the estimates undervalued multiple components of the loss. Farmers’ third-party estimate for HVAC replacement, for example, was approximately half the actual contractor estimate, a disparity so large that it could not be attributed to a legitimate difference of professional opinion. Farmers applied excessive depreciation to multiple claim items across the supplemental estimate. The effect of these undervaluations, coming nearly a year after the fire and just weeks before the depreciation recovery deadline, was to force Ms. Merritt to choose between accepting inadequate payments or spending the final weeks before the deadline disputing estimates that Farmers could have issued months earlier. 71. Throughout these eleven months of inaction, Farmers continued to send communications referencing the contractual suit-limitation provision, warning Ms. Merritt of the approaching deadline while doing nothing to advance the claim that would allow the deadline to be met. Farmers had been told on Day One that supplemental claims were coming and what the triggering event would be. Farmers had nine months to prepare before that triggering event occurred. Farmers then waited three more months after it occurred before taking any action. And throughout that entire period, Farmers’ adjusters and representatives had time to send deadline warnings. They did not have time to inspect the property. The message to Ms. Merritt was unmistakable: the clock is running, and we are not going to help you beat it. The Depreciation Deadline 72. Approximately $48,000 in recoverable depreciation was at stake under the policy. If Ms. Merritt did not complete repairs and submit documentation within the specified period, that money would be permanently forfeited. Having waited nearly a year to evaluate supplemental damages, Farmers then doubled down on an impossible timeframe, giving Ms. Merritt less than two months to meet a deadline that Farmers’ own inaction had made unachievable. 73. The original depreciation recovery deadline was extended by Farmers to March 31, 2026. Farmers initially attempted to hold that deadline even though it had not completed its own inspections and estimates until February 2026, just weeks before the deadline it was enforcing. Only after being challenged did Farmers extend the deadline again to April 30, 2026, the deadline in effect at the time of this filing. Each extension was an acknowledgment that the prior deadline was insufficient, yet neither extension was adequate given the scope of Farmers’ own delays. A thirty-day extension followed by another thirty-day extension demonstrates that Farmers recognized its own conduct had compromised the original timeline. But recognition is not remediation. Extending a deadline by thirty days does not cure eleven months of delay. 74. As described above, Farmers was told from the first day after the fire that supplemental claims were coming, had nine months to prepare before the triggering event occurred, waited three additional months after it occurred, and did not issue supplemental payments until approximately fifty days before the March 31 deadline. The practical effect was that Ms. Merritt could not complete repairs she had not been told the cost of and could not incur replacement costs for damage that Farmers had not yet evaluated. The depreciation deadline was not a deadline that Ms. Merritt failed to meet. It was a deadline that Farmers’ own conduct made impossible to meet. 75. Meanwhile, Farmers simultaneously asserted a contractual suit-limitation deadline of February 24, 2026. The coexistence of these two positions was irreconcilable. Farmers told Ms. Merritt to complete her repairs and submit depreciation recovery documentation by April 30, 2026 while telling her she was required to file suit by February 24, 2026. Farmers expected Ms. Merritt to continue performing under the policy for more than two months past the date by which Farmers insisted she must file a lawsuit challenging the policy’s administration. A policyholder cannot be expected to complete a claim process that her insurer says extends through April while simultaneously being told that her right to challenge her insurer’s conduct expired in February. An insurer that extends a claim deadline to April 30 has acknowledged that the claim requires performance through April 30. It cannot simultaneously maintain that the policyholder’s right to legal remedy expired two months earlier. These two deadlines, both imposed by Farmers, cannot coexist in good faith. Failure to RemEDIATE Cunningham’s Corrupted Files 76. Cunningham’s agency relationship with Farmers ended abruptly in approximately August 2024. No public announcement of retirement, agency sale, or voluntary transition was made. Cunningham remained actively licensed as an insurance producer, obtained appointments with other carriers, and obtained additional licensing as a surplus lines broker shortly after the separation. Upon information and belief, Farmers was aware of concerns regarding Cunningham’s conduct at or before the time of his departure. 77. By the time Cunningham’s relationship with Farmers ended, his misconduct had corrupted Ms. Merritt’s file in multiple respects. Ms. Merritt’s underwriting file contained fabricated entries regarding the home’s electrical wiring. Her policy contained an unauthorized exclusion removing the rear wooden deck from coverage, added without her knowledge or consent after Cunningham refused to submit a legitimate storm damage claim for that structure. Her file reflected a false roof replacement date. Legitimate 2022 storm damage claims for the roof, deck, exterior trim, and siding had been suppressed entirely because Cunningham told Ms. Merritt, falsely, that no claims were possible. A phantom automobile claim from 2019 appeared in her file that Ms. Merritt has no knowledge of and that has never been explained. Ms. Merritt paid approximately $3,000 to $4,000 out of pocket for bare-minimum patchwork repairs to exterior storm damage because Cunningham told her that insurance would not cover it and that doing the work herself would lower her premiums. None of this was true. 78. Ms. Merritt did not discover, and had no reasonable means of discovering, the falsity of Cunningham’s representations, the unauthorized exclusion, or the fabricated underwriting entries until the post-fire claims process in 2025. The misrepresentations were made by her trusted insurance agent. The exclusion was added without notice. The false underwriting entries were contained in internal records that Ms. Merritt could not access. She had no reason to suspect that the person she relied upon as her insurance professional had systematically corrupted her file. 79. Farmers took no steps to audit Cunningham’s book of business after his August 2024 departure. Despite having knowledge of concerns regarding Cunningham’s conduct, Farmers did not review the files of policyholders he had serviced, did not identify the fabricated entries, unauthorized exclusions, or suppressed claims in those files, and did not contact affected policyholders to determine whether remediation was necessary. When Ms. Merritt’s fire claim arrived six months later on a Cunningham-serviced policy, the corrupted file was still intact. The false wiring entry triggered a baseless arson investigation. The unauthorized deck exclusion remained on the policy. The suppressed 2022 claims remained unprocessed. Every consequence that followed from Cunningham’s misconduct was a consequence that Farmers could have prevented by auditing his files after his departure. Farmers chose not to. 80. After being placed on notice of the specific fabricated entries, the unauthorized exclusion, and the suppressed claims during the post-fire claims process, Farmers still took no corrective action. Farmers did not audit or correct the file. Farmers did not process or otherwise address the 2022 storm damage claims for the roof, deck, exterior trim, and siding, despite having been informed of those claims in detail, including estimated values and the circumstances under which Cunningham suppressed them. Ms. Merritt’s counsel formally requested that Farmers calculate and pay the suppressed roof claim using Farmers’ standard assessment methodology for a roof of that age and size as of January 2022, assess and pay the deck and exterior claims, and reimburse Ms. Merritt for the out-of-pocket expenses she incurred because Cunningham told her insurance would not cover the damage. Farmers has not responded to any of these requests. 81. Farmers’ successor agent at the Cal Smith Agency, upon assuming Ms. Merritt’s account after Cunningham’s departure, identified and corrected some of Cunningham’s errors, including the wrong construction date for the home. The successor agent also prepared a new Farmers policy quote in February 2025 that removed the unauthorized deck exclusion entirely, apparently recognizing that it should not have been there. Before that quote could be accepted, the fire occurred. The deck exclusion remains on the policy to this day. The deck itself has since been disassembled during fire repairs and no longer physically exists. Farmers’ own adjuster has inspected the property since that time. Yet the exclusion for a structure that does not exist has never been removed. 82. Farmers continued to rely upon Cunningham’s fabricated entries in its claims-handling decisions even after being placed on notice of their inaccuracy. As described above, the false wiring entry triggered the arson investigation. During the pre-litigation claims process, Farmers’ counsel took the position that Cunningham’s misconduct and its effects on Ms. Merritt’s coverage were “completely separate and distinct” from Farmers’ handling of the fire claim. This position is contrary to 36 O.S. § 1435.3 and the non-delegable duty doctrine, under which Farmers is responsible for the acts and omissions of its authorized agents. It is also contrary to the factual record. Farmers’ own Special Adjuster told Ms. Merritt’s caretaker in February 2025 that Cunningham’s fabricated entries caused the claim to be flagged and triggered the arson investigation. The claim handling and the Cunningham misconduct are not separate. They are cause and effect. Non-Renewal, Retaliatory Premium, and Forced Attestation 83. In approximately September 2025, Farmers issued a notice of non-renewal of Ms. Merritt’s policy. The sole stated basis for non-renewal was the condition of the rear wooden deck. This was the same deck that Farmers’ own agent, Cunningham, had secretly excluded from coverage in 2022 after wrongfully refusing a storm damage claim for it. It was the same deck for which Farmers’ successor agent had prepared a new Farmers policy quote in February 2025 that removed the exclusion entirely as unjustified. And it was the same deck that Cunningham’s unauthorized exclusion had already removed from any underwriting risk to Farmers. A structure that was already excluded from coverage could not have posed a legitimate underwriting concern. A structure that Farmers’ own successor agent had determined warranted removal of the exclusion could not have been a legitimate basis for non-renewal seven months later. The sole stated basis for the non-renewal was a pretext, and the pretext was built on Cunningham’s misconduct. 84. Ms. Merritt had not filed a homeowners claim in approximately fifteen years prior to the fire. She had paid premiums faithfully for over twenty-five years. The non-renewal was issued during active claims handling and after Ms. Merritt’s caretaker had raised concerns about Farmers’ claims practices. The timing and the choice of pretext are consistent with retaliation, not legitimate underwriting. 85. The non-renewal notice was sent to Ms. Merritt’s fire-damaged and uninhabitable residence despite Farmers’ repeated and documented knowledge that she had been displaced and was communicating through alternate contact information. Throughout 2025, Farmers repeatedly sent important documents and payments, including dwelling repair checks, to the uninhabitable property rather than to the alternate contact information provided, causing significant delays in Ms. Merritt’s receipt of correspondence and funds. Ms. Merritt did not learn of the non-renewal until approximately the following month. 86. Ms. Merritt’s caretaker disputed the non-renewal in writing and demanded all documents related to the non-renewal decision, which Farmers’ own non-renewal letter stated Ms. Merritt had a right to receive. After the written dispute was submitted, Farmers withdrew the non-renewal with virtually no explanation. If the non-renewal had been based on a legitimate underwriting concern, Farmers would have had no reason to withdraw it simply because it was disputed. The withdrawal itself is evidence that Farmers knew the stated basis could not withstand scrutiny. Ms. Merritt’s counsel made at least five written requests over a period of months for the supporting documents that Farmers’ own correspondence stated Ms. Merritt had a right to receive. Farmers produced no documents, provided no explanations, asserted no privilege claims, and offered no other basis for withholding in response to any of these requests. As of the date of this filing, not a single document has been produced. 87. Although Farmers eventually withdrew the non-renewal, the damage was done. Farmers’ non-renewal and associated reporting to industry databases including CLUE, ISO, and A-PLUS effectively rendered Ms. Merritt uninsurable in the competitive marketplace. Every alternative carrier Ms. Merritt contacted declined to offer coverage. As recently as July 2025, before Farmers’ non-renewal and database reporting took full effect, Allstate Insurance had actively solicited Ms. Merritt’s business with a quoted annual premium of approximately $1,563, applying a “Claim Free” discount that confirmed Ms. Merritt remained an attractive insurance risk. By December 2025, Ms. Merritt’s only available option was Farmers’ renewal at $5,136 per year. This renewal premium was approximately 67% higher than the $3,081 annual premium quoted by Farmers’ own agent just months earlier, approximately 95% higher than the Oklahoma Department of Insurance average for comparable homes, and approximately 229% higher than the Allstate solicitation. Ms. Merritt did not accept this premium because she agreed with it. She accepted it because Farmers’ own conduct had eliminated every alternative. An insurer that poisons its policyholder’s options in the marketplace and then charges a punitive premium as the sole remaining carrier has not renewed a policy. It has leveraged its own misconduct into a captive customer. 88. As a condition of the renewal, in approximately December 2025, Farmers required Ms. Merritt to sign a “Confirmation of Roof Replacement” form. 89. The form contained a pre-printed date of 2009 as the year the roof was last replaced. The form warned that providing false, incorrect, or incomplete information could result in cancellation of coverage, nonrenewal or rescission of the policy, or a change in premium and reduction in coverage. 90. Farmers’ own agent who sent the form admitted the same day that she could not find any claim supporting the 2009 date, could not locate any records verifying it, and had no definite answer regarding when the roof was actually replaced. 91. Farmers has given at least three different roof replacement dates over the course of Ms. Merritt’s policy: 2015 (falsely stated by Cunningham), 2009 (pre-printed on the form), and 2006 (reflected in the claims portal). 92. No 2009 claim exists anywhere in Ms. Merritt’s accessible claims history. 93. The only homeowners claims visible in her portal are from January 3, 2006 and February 24, 2025. 94. Farmers selected a date it could not verify, required Ms. Merritt to attest to it under threat of losing her only available coverage, and reserved the right to cancel her policy, rescind her coverage, or reduce her claim payments if the date Farmers selected turns out to be wrong. This is not underwriting. It is entrapment by contract. Pervasive Errors Reflect Institutional Incompetence Throughout Farmers’ Documents 95. Correspondence and estimates prepared by Farmers in February 2026 listed a terminated adjuster as the responsible adjuster and estimator, despite that adjuster having departed Farmers approximately ten months earlier. 96. Inspection reports from Farmers contained a date-of-loss error reflecting a date in 2005, twenty years prior to the actual loss. 97. Farmers’ policy documents reflected the wrong construction date for the home and other basic factual inaccuracies including the number of bedrooms. 98. These and many additional errors and inaccuracies appear throughout Farmers’ policy and claim documents and are not isolated oversights. Farmers’ policy and claim documents of every kind are littered with errors and mistakes at a shocking frequency. They reflect the poor quality and inattention that Farmers, as an institution, devoted to Ms. Merritt’s policy and claim. The Suit-Limitation Campaign 99. Throughout the claims process, Farmers, acting through its claims representatives and counsel retained during the pre-litigation claims process, sent at least eight separate communications from three different personnel over a period of ten months asserting or warning about the contractual suit-limitation provision. 100. During this same period, the claim remained open and actively under adjustment. Farmers continued to request documentation and seek cooperation from Ms. Merritt, continued to evaluate the loss, continued to retain inspectors and conduct site visits, and continued to issue payments and supplemental estimates. 101. As late as February 9, 2026, just fifteen days before the asserted February 24, 2026 lawsuit deadline set by Farmers’ self-serving and buried provision in its policy, Farmers issued a supplemental payment, scheduled new inspections, and prepared new estimates, demonstrating that the claim remained under active adjustment within days of the deadline Farmers was simultaneously enforcing. A policyholder cannot reasonably be expected to file suit against her own insurer while that insurer is still writing checks, requesting cooperation, and telling her the claim is still open, pending, and being evaluated. 102. Ms. Merritt’s representative contacted Farmers’ counsel in February of 2026 and requested a reasonable ninety-day tolling agreement so that the claim evaluation could continue without requiring Ms. Merritt to file suit solely to preserve her rights. This request sought no tactical advantage. It would not have altered the parties’ respective legal positions. Its sole purpose was to allow an active claim to continue without unnecessary litigation and without burdening the Court with a matter that might otherwise be resolved. Farmers’ counsel declined, then stopped responding at all to communications from Ms. Merritt’s representative. Counsel’s Conduct During the Pre-Litigation Claims Process 103. In February 2026, Farmers retained outside counsel to assist with “the handling of Ms. Merritt’s February 24, 2025 fire loss claim” and the legal aspects thereof. Counsel for Farmers did not limit her involvement to providing legal advice. Counsel addressed specific claim items in correspondence, including HVAC valuation, ceiling damage scope, alarm systems, and ductwork. Counsel directed the claims adjuster to forward correspondence. Counsel coordinated with the adjuster on supplemental payments. Counsel took factual positions on coverage disputes and obtained documentation directly from Ms. Merritt’s vendors. To the extent counsel participated in claims-handling functions rather than purely legal functions, counsel acted as Farmers’ agent for purposes of those decisions, and counsel’s conduct during the claims process is attributable to Farmers. 104. On February 9, 2026, counsel issued correspondence that relied upon the February 26, 2025 internal file note to affirmatively attribute the seventy-two-day ALE/FRV delay to Ms. Merritt’s representative. Counsel represented that the file note reflected Ms. Merritt’s caretaker stating he would “think about” whether housing assistance was needed, and that this was “the reason ALE or FRV was not initially paid.” Counsel cited subsequent emails from April 2025 in which Ms. Merritt’s representative described gathering receipts and ALE documentation as further evidence that the insured caused the delay. Counsel also took the position that Cunningham’s pre-fire misconduct, including the fabricated underwriting entries that triggered the arson investigation, was “completely separate and distinct” from Farmers’ claims handling, notwithstanding that Cunningham acted at all relevant times as Farmers’ authorized agent and that his fabricated entries directly affected Farmers’ claims-handling decisions. 105. The representation regarding the ALE/FRV delay was made notwithstanding that the eight-page letter uploaded to Farmers’ portal on February 25, 2025, which urgently and repeatedly requested immediate housing assistance, was already in Farmers’ file. Either counsel reviewed the February 25 letter and chose to rely on the false file note that contradicted it, or counsel relied on the file note without reviewing the letter that contradicted it. Under either explanation, counsel presented to Ms. Merritt’s attorney a version of events that was demonstrably inconsistent with the written record already in Farmers’ possession. The April emails counsel cited as evidence of insured-caused delay were in fact evidence of Ms. Merritt’s representative following the incorrect guidance that Farmers’ own adjuster had provided. By disclosing the substance of the file note, counsel revealed previously unknown evidence of improper claims handling that Ms. Merritt’s representatives had no knowledge of, no access to, and no reason to suspect existed. The disclosure made Ms. Merritt’s case stronger, not weaker. 106. That same evening, Farmers under the oversight of Farmers’ counsel issued a supplemental payment letter that listed a terminated adjuster as the responsible estimator, reasserted the March 31, 2026 depreciation deadline that Farmers’ own delays had made impossible to meet, and reflected a date-of-loss error of twenty years on claim documents. The coordination and timing of these communications, issued on the same day as counsel’s correspondence, reflect institutional participation in claims handling on the part of Farmers’ counsel. 107. In the final weeks before the asserted filing deadline, counsel failed to respond to time-sensitive correspondence promptly or substantively. Ms. Merritt’s attorney sent multiple substantive letters, including detailed supplemental claim disputes, a confidential settlement communication requesting a meeting to discuss resolution, and an informal request for a call or in-person meeting. Counsel’s eventual response did not address the substantive claim disputes, did not respond to the settlement communication, and did not accept the invitation to meet or discuss resolution. Instead, counsel’s response addressed only procedural matters: an extension of the depreciation deadline, a statement that counsel could not accept service of process for Farmers, and a reassertion that Farmers “maintains all suit limitations imposed by the policy.” Counsel thus declined to engage on substance while asserting a deadline, and acknowledged she lacked authority to accept service or agree to tolling while insisting the deadline remained in force. A tolling request sent by Ms. Merritt’s attorney was rejected, then professional messages seeking clarification received no response whatsoever over a period of days. 108. The practical effect of counsel’s participation in the claims process was to add an additional layer of delay, unresponsiveness, and adversarial posturing during the most time-sensitive period of the claim. Counsel’s involvement did not accelerate resolution. It impeded it. Counsel relied on a demonstrably false file note to shift blame for seventy-two days of nonpayment onto the insured. Counsel took legal positions directly contrary to binding Oklahoma authority on agent imputation. Counsel failed to engage substantively on claim disputes or settlement while asserting a filing deadline she lacked authority to extend. The suit-limitation provision was employed not as a legitimate claims administration tool but as a weapon to pressure a disabled senior policyholder into accepting inadequate claim payments or forfeiting her rights entirely. Unresolved Items and Continuing Harm 109. Multiple claim items remain unresolved as of the date of this filing. 110. As a direct result of the conduct described above, Ms. Merritt has suffered and continues to suffer financial loss, loss of policy benefits, out-of-pocket expenses, increased insurance costs, damage to her insurability, emotional distress, aggravation of pre-existing physical conditions, and the necessity of retaining counsel and filing this action to obtain benefits owed without litigation. The acts and omissions described in this Section are not isolated incidents. They constitute a pattern of institutional conduct reflecting Farmers’ knowing or reckless disregard for its obligations to Ms. Merritt and for the rights of a policyholder who complied with every condition of her policy and cooperated fully at every stage of the claims process. COUNT I: BREACH OF CONTRACT (Against Defendant Farmers) 111. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. 112. A valid and enforceable homeowners insurance contract existed between Ms. Merritt and Farmers covering the property at 3029 NW 67th Street, Oklahoma City, Oklahoma. 113. The fire loss on February 24, 2025 was a covered peril under the policy. 114. Ms. Merritt performed all conditions required of her under the policy, including timely notice of loss, cooperation with investigation, submission of proof of loss, and access for inspection. 115. Farmers breached the insurance contract by failing to timely and fully pay benefits owed under the policy, including but not limited to: Additional Living Expense and Fair Rental Value benefits; dwelling repair costs; personal property claims; supplemental damages; and recoverable depreciation. 116. As a direct and proximate result of Farmers’ breach, Ms. Merritt has suffered damages including but not limited to unpaid policy benefits, consequential damages, and prejudgment interest. COUNT II: BREACH OF IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING (Against Defendant Farmers) 117. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. 118. Under Oklahoma law, Farmers owed Ms. Merritt an implied duty of good faith and fair dealing arising from the insurance contract relationship. Christian v. American Home Assur. Co., 577 P.2d 899 (Okla. 1977); Badillo v. Mid Century Ins. Co., 121 P.3d 1080 (Okla. 2005). 119. Ms. Merritt was entitled to coverage under the policy for the February 24, 2025 fire loss. 120. Farmers had no reasonable basis for its delays, denials, and failures in handling Ms. Merritt’s claim, and in the absence of a legitimate dispute as to coverage or the amount of benefits owed, Farmers failed to deal fairly and in good faith with Ms. Merritt. 121. Farmers’ conduct constituting bad faith includes, but is not limited to: (a) Delaying Additional Living Expense and Fair Rental Value payments for approximately seventy-two days while Ms. Merritt, a disabled senior citizen, was displaced from her accessible home; (b) Providing incorrect information about housing benefits and failing to disclose the Fair Rental Value option available under the policy; (c) Creating or maintaining a false internal file note to justify nonpayment of housing benefits, and relying on that note as the stated basis for withholding ALE and/or FRV benefits for approximately seventy-two days; (d) Initiating an arson and fraud investigation based on fabricated underwriting entries placed in Ms. Merritt’s file by a terminated agent, without verifying the accuracy of those entries or investigating their source; (e) Failing to audit or remediate the files of a terminated agent whose false entries triggered the investigation, and continuing to rely on those entries in claims-handling decisions even after being placed on notice of their inaccuracy; (f) Allowing the claim to remain unassigned and inactive for a period of weeks following an adjuster’s departure, and failing to retain third-party inspectors or issue supplemental estimates for nearly one year after the fire; (g) Undervaluing covered damages and applying excessive depreciation; (h) Attempting to reduce Fair Rental Value benefits previously owed or represented as payable; (i) Imposing a depreciation recovery deadline under circumstances where Farmers’ own delays made compliance impossible; (j) Issuing a notice of non-renewal during active claims handling, based in part on a condition created by Farmers’ own terminated agent, and sending that notice to the fire-damaged and uninhabitable residence despite knowledge that Ms. Merritt had been displaced and was communicating through alternate contact information; (k) Refusing to produce non-renewal documents despite at least five written requests over a period of months, without asserting any privilege or other basis for withholding; (l) Listing a terminated adjuster as the responsible adjuster on estimates prepared nearly one year after his departure, reflecting systemic inattention to Ms. Merritt’s claim; (m) Sending at least eight separate suit-limitation warnings from three different personnel over ten months while simultaneously refusing a standard tolling agreement, thereby necessitating a filing while continuing to actively evaluate the claim; and (n) Failing to exercise reasonable care in investigating, evaluating, and processing Ms. Merritt’s claim, including failure to verify underwriting file accuracy, failure to properly train or supervise adjusters regarding available benefits, and failure to implement reasonable standards for prompt investigation as required by applicable regulations. 122. Farmers’ violation of the duty of good faith and fair dealing was the direct cause of Ms. Merritt’s injuries. 123. As a direct and proximate result of Farmers’ bad faith, Ms. Merritt has suffered compensatory damages including but not limited to: economic losses; emotional distress and mental anguish resulting from prolonged displacement, claim delays, and Farmers’ conduct toward her; and aggravation of pre-existing physical conditions caused by the loss of accessible housing and the stress of Farmers’ claims handling. These emotional and physical injuries are pled as consequential damages flowing directly from Farmers’ tortious breach of its duty of good faith and fair dealing. COUNT III: NEGLIGENCE (Against Defendants Cunningham and Cal Smith) 124. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. To the extent any of the following theories against Cunningham and Cal Smith are determined to overlap, they are pleaded in the alternative. 125. Cunningham owed Ms. Merritt a duty to exercise reasonable care, skill, and diligence in procuring, servicing, and maintaining her insurance coverage. Swickey v. Silvey Companies, 979 P.2d 266 (Okla. Civ. App. 1999); A-OK Const., Inc. v. McEldowney, 844 P.2d 182 (Okla. 1992). 126. Cunningham breached that duty by, among other things: entering fabricated information into Ms. Merritt’s underwriting file; making material misrepresentations about coverage and claim eligibility; refusing to submit valid claims for covered losses; and adding a policy exclusion without Ms. Merritt’s knowledge or consent. 127. Cal Smith assumed servicing responsibility for Ms. Merritt’s policy and, by undertaking to service the policy and affirmatively working to modify inherited policy terms, owed a duty of reasonable care to Ms. Merritt in performing those undertakings. 128. Cal Smith breached that duty by failing to identify or correct material errors and fabricated entries in the inherited policy file that were relied upon by Farmers in handling Ms. Merritt’s fire claim, contributing to the initiation of an arson investigation and delays in claim processing. 129. As a direct and proximate result of the negligence of Cunningham and Cal Smith, Ms. Merritt has suffered damages including but not limited to: triggering an unwarranted arson investigation; loss of coverage for the deck structure; failure to recover on 2022 storm damage claims; and delays and adverse decisions in the handling of the fire claim. COUNT IV: NEGLIGENT PROCUREMENT (Against Defendant Cunningham) 130. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. 131. Cunningham undertook to procure and maintain adequate homeowners insurance coverage for Ms. Merritt. 132. Ms. Merritt relied on Cunningham as her insurance professional to ensure that her coverage was proper and complete. 133. Cunningham failed to exercise reasonable care in procuring and maintaining Ms. Merritt’s insurance coverage by, among other things: refusing to submit valid storm damage claims; misrepresenting material facts about coverage history; adding an unauthorized policy exclusion that reduced Ms. Merritt’s coverage without her knowledge; and entering false underwriting information into Ms. Merritt’s file. 134. As a direct and proximate result of Cunningham’s negligent procurement, Ms. Merritt was denied coverage for legitimate claims, lost coverage for her deck structure, and suffered consequential damages when the corrupted file contributed to adverse claims-handling decisions after the fire. COUNT V: NEGLIGENT MISREPRESENTATION (Against Defendants Cunningham and Cal Smith) 135. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. 136. In the course of his business as Ms. Merritt’s insurance agent, Cunningham supplied false information to Ms. Merritt and to Farmers regarding the date of roof replacement, the eligibility of storm damage for coverage, and the status and scope of Ms. Merritt’s policy coverage. 137. Cunningham failed to exercise reasonable care in obtaining and communicating this information. 138. Ms. Merritt relied on Cunningham’s representations as her insurance professional. 139. As a direct result, Ms. Merritt suffered pecuniary loss including lost claim recoveries, out-of-pocket expenses, and consequential damages from corrupted file entries. 140. Cal Smith, in the course of servicing Ms. Merritt’s policy, failed to exercise reasonable care in reviewing and communicating accurate information regarding Ms. Merritt’s policy status and coverage, including by failing to identify or correct material errors in the information contained in the policy file it maintained on behalf of Farmers. 141. Ms. Merritt and Farmers relied on the accuracy of the information in the policy file as maintained by Cal Smith. Ms. Merritt suffered pecuniary loss as a result of Cal Smith’s failure to exercise reasonable care. COUNT VI: FRAUD AND CONCEALMENT (Against Defendant Cunningham) 142. Plaintiff incorporates by reference all preceding General Factual Allegations as though fully set forth herein. 143. Cunningham made material misrepresentations of fact to Ms. Merritt, including the following, stated with particularity: (a) Who: Don R. Cunningham, acting through Don R. Cunningham Insurance Agency, Inc., as Ms. Merritt’s Farmers insurance agent. (b) When and Where: In January 2022, at Ms. Merritt’s home located at 3029 NW 67th Street, Oklahoma City, Oklahoma; and at various times during 2022 when policy changes were processed through Cunningham’s agency. (c) False Statements: (i) Cunningham represented that Ms. Merritt’s roof had been replaced in 2015, when in fact it had been replaced no later than 2009; (ii) Cunningham represented that storm damage claims for the roof, deck, and exterior could not be filed, when in fact such claims were covered under the policy; (iii) Cunningham entered false information in the underwriting file regarding the property’s electrical wiring that did not reflect the property’s actual condition. (d) Concealment: After refusing to process the deck claim, Cunningham added a Private Structures Exclusion removing the rear wooden deck from coverage without disclosing this change to Ms. Merritt. Cunningham concealed the existence of the exclusion and the fact that he had altered Ms. Merritt’s coverage without her knowledge or consent. 144. Cunningham knew, or in reckless disregard of the truth should have known, that his representations were false and that his concealment of the policy exclusion was material. Cunningham made these misrepresentations and concealments with the intent that Ms. Merritt rely upon them and refrain from pursuing her claims or seeking alternative coverage. 145. Ms. Merritt justifiably relied on Cunningham’s representations and, as a result, did not pursue the storm damage claims, did not seek alternative coverage, and did not discover the unauthorized exclusion or fabricated entries until 2025. Ms. Merritt’s reliance was reasonable in light of Cunningham’s long-standing role in servicing the policy, his representations that he was advising her regarding the scope of coverage, and the undisclosed policy changes material to that coverage. 146. As a direct and proximate result of Cunningham’s fraud and concealment, Ms. Merritt suffered damages including lost claim recoveries for 2022 storm damage, loss of deck coverage, consequential damages from corrupted file entries including the arson investigation and claim delays, and out-of-pocket repair expenses. 147. Plaintiff did not discover, and could not with reasonable diligence have discovered, the falsity of these representations until the post-fire claims process in 2025 revealed the false entries, unauthorized exclusion, and misrepresented facts. This action is timely under the discovery rule applicable to fraud claims. See 12 O.S. § 95. COUNT VII: VICARIOUS LIABILITY AND NON-DELEGABLE DUTY (Against Defendant Farmers for the Conduct of Cunningham) 148. Plaintiff incorporates by reference all preceding General Factual Allegations and the allegations contained in Counts III through VI above as though fully set forth herein. 149. At all relevant times, Cunningham acted as Farmers’ authorized insurance agent in servicing Ms. Merritt’s policy. Under 36 O.S. § 1435.3, Cunningham is regarded as representing Farmers, not the insured, in any controversy between the insured and the insurer. 150. Cunningham’s acts and omissions, including the fabricated underwriting entries, material misrepresentations, unauthorized policy exclusion, and refusal to process valid claims, occurred within the scope of Cunningham’s agency relationship with Farmers. 151. Farmers had a non-delegable duty of good faith to Ms. Merritt in the administration of her policy and cannot avoid liability by delegating policy functions to agents or by pointing to the agent’s independent misconduct. Wathor v. Mutual Assur. Adm’rs, Inc., 87 P.3d 559 (Okla. 2004). 152. Alternatively or additionally, Farmers ratified Cunningham’s conduct by: accepting premiums based on the altered coverage; failing to audit or correct Cunningham’s files after his departure; relying on Cunningham’s fabricated entries in claims-handling decisions including the initiation of an arson investigation; and using the unauthorized deck exclusion as a stated basis for non-renewal of Ms. Merritt’s policy. 153. Farmers is vicariously liable for all damages caused by Cunningham’s tortious conduct as alleged herein, including compensatory and punitive damages. PUNITIVE DAMAGES 154. Plaintiff incorporates by reference all preceding paragraphs as though fully set forth herein. 155. The conduct of Defendants Farmers and Cunningham, as described herein, was committed with reckless disregard for the rights of Plaintiff and, alternatively, was intentional and done with malice toward Plaintiff. The acts and omissions described herein constitute a pattern of conduct rather than isolated incidents. Pursuant to 23 O.S. § 9.1, Plaintiff is entitled to an award of punitive damages sufficient to punish Defendants and to deter similar conduct. 156. Consistent with 12 O.S. § 2009, this Petition does not state a specific dollar amount for punitive damages but states that the amount sought is in excess of the amount required by law. ATTORNEY FEES, INTEREST, AND COSTS 157. Plaintiff is entitled to recover attorney fees and costs as the prevailing party pursuant to 36 O.S. § 3629 and any other applicable statute or provision of law. 158. Plaintiff is entitled to prejudgment interest at the rate of fifteen percent (15%) per annum from the date the loss was payable to the date of verdict, pursuant to 36 O.S. § 3629. PRAYER FOR RELIEF WHEREFORE, Plaintiff Barbara Merritt respectfully requests judgment against Defendants, jointly and severally as applicable, for: a. All actual damages in an amount in excess of $75,000.00; b. Consequential damages according to proof; c. Damages for emotional distress, mental anguish, and aggravation of pre-existing physical conditions according to proof; d. Punitive damages as allowed by law pursuant to 23 O.S. § 9.1; e. Attorney fees and costs pursuant to 36 O.S. § 3629 and any other applicable provision of law; f. Prejudgment interest at fifteen percent (15%) per annum pursuant to 36 O.S. § 3629; g. Post-judgment interest at the legal rate; h. Costs of this action; and i. Such other and further relief as the Court deems just and proper. Dated: February 24, 2026 Respectfully submitted, Jared King, OBA No. 35656 Law Office of Jared King 7100 N. Classen Blvd., Suite 300 Oklahoma City, OK 73116 Tel.: (405) 840-1066 [email protected] Attorney for Plaintiff JURY TRIAL DEMANDED ATTORNEYS’ LIEN CLAIMED