F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
APR 17 1998
TENTH CIRCUIT
PATRICK FISHER
Clerk
STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY; STATE FARM FIRE
AND CASUALTY COMPANY,
Plaintiffs-Appellants, No. 97-5002
(N. District of Oklahoma)
v. (D.C. No. CV-96-892-C)
BILL McCALISTER, DEBBIE
McCALISTER,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before SEYMOUR, Chief Judge, LOGAN and MURPHY, Circuit Judges.
Plaintiffs State Farm Mutual Automobile Insurance Company and State
Farm Fire and Casualty Company (hereinafter collectively “State Farm”) appeal
the district court’s grant of summary judgment in favor of Bill and Debbie
McCalister. State Farm sued the McCalisters in September 1996, seeking a
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
declaration that a series of settlements entered into by State Farm and the
McCalisters constituted a full and final settlement of all of the McCalisters’
claims for uninsured/underinsured motorist coverage. The district court rejected
State Farm’s contentions and concluded that the settlement agreements clearly and
unambiguously released State Farm from liability only under the specific policies
referenced in the settlement agreements. On appeal, State Farm asserts that the
district court erred when it refused to consider extrinsic evidence in interpreting
the settlement agreements, even though the agreements are unambiguous on their
faces. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
This court reviews a decision granting summary judgment de novo, under
the same legal standard applicable in the district courts. See Miles v. Denver Pub.
Sch., 944 F.2d 773, 775 (10th Cir. 1991). Summary judgment is appropriate “if
the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247-48 (1986).
Because the parties are familiar with the facts surrounding this case and the
controlling issue on appeal is legal, this court sees no need to recite the facts
here. Relying on a 1973 decision of this court and a 1980 decision of the
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Oklahoma Supreme Court, State Farm contends that the district court was
obligated to review extrinsic evidence to determine the meaning of the settlement
agreements, even though those agreements are unambiguous on their faces. See
First Nat’l Bank v. Rozelle, 493 F.2d 1196, 1200 (10th Cir. 1973); Amoco Prod.
Co. v. Lindley, 609 P.2d 733, 741-42 (Okla. 1980). We agree that the referenced
cases appear to indicate that resort to extrinsic evidence is appropriate even when
the contract in question is unambiguous. The problem with State Farm’s reliance
on Rozelle and Amoco, however, is that the Oklahoma Supreme Court’s most
recent pronouncements on this issue clearly indicate that courts must not utilize
extrinsic evidence to interpret a contract when that contract is clear and
unambiguous on its face. For instance, the Oklahoma Supreme Court recently
held as follows:
Whether a contract is ambiguous so as to require extrinsic
evidence to clarify the doubt is a question of law for the courts. If
language of a contract is clear and free of ambiguity, the court is to
interpret it as a matter of law.
....
A contract must be considered as a whole so as to give effect
to all its provisions without narrowly concentrating upon some clause
or language taken out of context. The language in a contract is given
its plain and ordinary meaning unless some technical term is used in
a manner intended to convey a specific technical concept. The parol
evidence rule teaches that unless fraud or mistake is involved, pre-
contract negotiations and oral discussions are merged into, and
superseded by, the terms of an executed writing. The practical
construction of an agreement (to be derived from the acts and
conduct of the parties) is an available tool only in case ambiguity
appears to be present. Where, as here, a contract is complete in itself
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and, when viewed as a totality, is unambiguous, its language is the
only legitimate evidence of what the parties intended. That intention
cannot be determined from the surrounding circumstances, but must
be gathered from a four-corners’ examination of the instrument.
Lewis v. Sac & Fox Tribe of Okla. Hous. Auth., 896 P.2d 503, 514 (Okla. 1994)
(footnotes omitted); see also Founders Bank & Trust Co. v. Upsher, 830 P.2d
1355, 1361-62 (Okla. 1992) (“Intent is to be gathered from the entire instrument.
Where the language is clear and explicit, there is no need to resort to extrinsic
evidence to ascertain its meaning. Where a contract is complete in itself but, as
viewed in its entirety is unambiguous, its language is the only legitimate evidence
of what the parties intended.” (footnotes omitted)).
In a diversity case, this court is required to apply the most recent statement
of state law by the state’s highest court. See Vitkus v. Beatrice Co., 127 F.3d 936,
941-42 (10th Cir. 1997); Black v. Baker Oil Tools, Inc., 107 F.3d 1457, 1464
(10th Cir. 1997). Accordingly, our disposition of the issue raised by State Farm is
controlled by Sac & Fox Tribe and Founders Bank, rather than the much older
cases cited in State Farm’s brief. Sac & Fox Tribe and Founders Bank indicate
that the district court did not err when it refused to consider extrinsic evidence to
vary the terms of the settlement agreements at issue. Furthermore, because the
settlement agreements were clear and unambiguous and resort to extrinsic
evidence was not necessary, the district court did not err in denying State Farm an
evidentiary hearing on the McCalisters’ summary judgment motion. Sac & Fox
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Tribe, 896 P.2d at 514 (“If language of a contract is clear and free of ambiguity,
the court is to interpret it as a matter of law.”).
Having resolved that the district court did not err in refusing to consider the
extrinsic evidence advanced by State Farm, we AFFIRM for substantially those
reasons expressed by the district court in its thorough Order dated December 3,
1996.
ENTERED FOR THE COURT:
Michael R. Murphy
Circuit Judge
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