Oklahoma Supreme Court rules service warranty law bars bad‑faith tort claims, grants writ in America's Car Mart case

The Oklahoma Supreme Court held Oct. 14, 2025, that the Service Warranty Act, 15 O.S. §141.24(b), bars tort claims for breach of the duty of good faith and fair dealing arising from vehicle service warranty contracts and issued a writ of prohibition in America's Car Mart Incorporated v. Hon. Damon Cantrell.

The case arose after Linda and Jeremy Nakwin bought a used 2012 Dodge Durango and a separate vehicle service contract from America's Car Mart (ACM). The Nakwins alleged they returned the SUV repeatedly for repairs, paid deductibles, were prevented from communicating directly with the repair shop, and were told repairs had been completed when the vehicle remained defective. They sued in Tulsa County district court for breach of contract, breach of warranty, and breach of the duty of good faith and fair dealing. ACM moved for partial summary judgment, arguing §141.24(b) of the Service Warranty Act precluded tort claims based on service warranties; the district court denied that motion, and ACM sought extraordinary relief.

The Oklahoma Supreme Court majority concluded the legislature's 2012 Service Warranty Act unambiguously declares service warranties are not insurance and provides that certain service-warranty contracts "shall not be deemed to create a special relationship" giving rise to tort claims for breach of the duty of good faith and fair dealing. The opinion states that "this language is unequivocal" and that the statute abrogates the prior judicial rule in McMullen v. Enterprise Financial Group, 2011 OK 7, which had treated some service contracts like insurance for purposes of bad‑faith tort claims.

The court rejected the Nakwins' argument that §141.24(b) is an unconstitutional "special law." The majority reasoned the provision applies uniformly to the broad class of contracts defined as service warranties under the Act and therefore does not single out a subset of similarly situated litigants for disparate treatment. The majority noted that the Act's definitional exclusion for contracts issued by companies with net assets over $100,000,000 (see §141.217(e)) does not make §141.24(b) a special law because §141.24(b) expressly removes the tort cause of action for all such warranties, including those excluded from the Act's definition.

The court granted ACM's petition for a writ of prohibition, precluding enforcement of the district court's order denying partial summary judgment (the opinion references the district court's March 5, 2024 ruling and an agreed interlocutory order entered June 5, 2024) and remanded the case for further proceedings consistent with the opinion.

A dissenting justice argued that §141.24(b) operates as an unconstitutional special law that immunizes a subset of insurers from tort liability and cautioned against issuing an extraordinary writ to forestall only part of a multi‑claim lawsuit. The dissent noted historically settled law recognizing an insurer's duty of good faith and fair dealing and criticized the majority for assuming original jurisdiction to prevent partial proceedings below; the dissent also observed that petitioner had an adequate remedy by appeal after final judgment.

The opinion situates the 2012 Act as a legislative response to McMullen and related cases and cites the Service Warranty Act's drafting and subsequent industry and regulatory discussion. The transcript of the opinion identifies counsel for ACM (Andrew A. Schenck and William C. Searcy, Eller and Detrick, P.C., Tulsa) and counsel for the real parties in interest (Christed Ledford, Ledford Law Firm, Owasso). The court's decision is recorded as America's Car Mart Incorporated v. Honorable Damon Cantrell, Case No. 122,581, decided Oct. 14, 2025; the court granted the writ of prohibition and remanded to the district court for further proceedings.

The practical effect, as stated by the majority, is that plaintiffs seeking tort damages for bad faith based on a contract that falls within the Service Warranty Act may be limited to contract-based remedies rather than tort remedies where §141.24(b) applies.

The Supreme Court's order grants the writ of prohibition and returns the matter to the district court to proceed in conformity with the state's high court's statutory interpretation.