F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
June 20, 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
JAIMEE LEE MENA,
Plaintiff-Appellant,
v.
No. 04-8022
SAFECO INSURANCE COMPANY
and GENERAL INSURANCE
COMPANY OF AMERICA,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Wyoming
(D.C. No. 03-CV-1043-B)
C. John Cotton, Cotton Law Office, Gillette, Wyoming for the Plaintiff-
Appellant.
Judith Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming for the
Defendants-Appellees.
Before KELLY, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and
LUCERO, Circuit Judge.
LUCERO, Circuit Judge.
The case before us arises under our diversity jurisdiction. Jaimee Lee
Mena, the plaintiff below, filed a complaint against defendants General Insurance
Company of America and SAFECO Insurance Company (“Safeco”), arguing that
her Safeco automobile insurance policy entitles her to aggregate or “stack” the
underinsured motorists coverage under the policy. Mena was insured under a
single policy covering three vehicles, and sought a declaratory judgment that
would allow her to stack her underinsured motorists coverage for each vehicle to
compensate for bodily injuries suffered in an automobile accident. After
tendering the underinsured motorists limit for a single vehicle, Safeco denied
additional coverage. On cross motions for summary judgment the district court
denied Mena’s claim of additional coverage and granted summary judgment to the
defendants. Having reviewed the policy in accordance with Wyoming law, we
agree with the district court and AFFIRM the grant of summary judgment to
Safeco.
I
Mena suffered serious injuries in an automobile accident while riding as a
passenger in a vehicle operated by her son. She insured the vehicle in which she
was riding, along with two other vehicles, under a single policy issued by Safeco.
The policy provided coverage for bodily injury, medical payments, automobile
damage, and losses involving uninsured and underinsured motorists. Under the
policy’s terms, Mena was eligible to recover (and has recovered) $25,000 in
bodily injury liability. The policy also provides underinsured motorists coverage
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of $100,000 per person for each of the three covered vehicles. Safeco has
tendered $100,000 to Mena as payment pursuant to the underinsured motorists
provision, bringing its total payment to $125,000 for the collision.
Mena sued Safeco in state court seeking a declaration that she is entitled to
receive up to $300,000 in underinsured motorists coverage, representing $100,000
for each of the three vehicles covered by the policy. She also sought damages and
attorney’s fees. Following removal to federal court, both sides filed cross
motions for summary judgment. The principal issue before the court was whether
Mena was entitled to stack the underinsured motorists coverage on each of the
three vehicles. After reviewing the policy, the court concluded that the policy
unambiguously prohibits stacking underinsured motorists coverage, granted
Safeco’s motion for partial summary judgment, and dismissed the case with
prejudice. Mena appeals.
II
We apply Wyoming law to the question of whether Mena is entitled to stack
the underinsured motorists coverage on the three vehicles covered by the policy.
Cooperman v. David, 214 F.3d 1162, 1164 (10th Cir. 2000) (“a federal court
sitting in diversity must ascertain and apply state law to reach the result the
Wyoming Supreme Court would reach if faced with the same question.”). Our
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review of Wyoming law and the policy’s language leads us to conclude that she is
not entitled to stack her underinsured motorists coverage.
A
The Wyoming Supreme Court has longstanding jurisprudence answering
whether insureds are entitled to stack uninsured motorists coverage based on
public policy gleaned from Wyoming’s Uninsured Motor Vehicle Coverage Act,
which requires carriers to make available uninsured motorists coverage to their
insureds. However, the court has only recently confronted the issue of whether
insureds are entitled to stack underinsured motorists coverage, an issue not
addressed by Wyoming statute. The supreme court’s first foray into the field of
uninsured motorists coverage stacking came in Ramsour v. Grange Ins. Assoc.,
541 P.2d 35 (Wyo. 1975). In Ramsour, the plaintiff was driving a rental car
covered by a policy including an uninsured motorists limit when she collided with
an uninsured motorist. Ramsour had a separate policy with a different insurance
company that also contained uninsured motorists coverage. Although both
policies contained “other insurance excess-escape clauses,” Ramsour sued both
insurers and claimed that she was entitled to payment of the total uninsured
motorists limit under both policies. The court began by reviewing Wyoming
public policy, which requires by statute all automobile insurance policies to
provide insureds the option of purchasing uninsured motorists coverage. Because
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“a premium has been paid for each of the endorsements and coverage has been
issued,” id. at 38, and because at least one insurance company would avoid
providing such coverage if stacking were forbidden, the court concluded that
enforcing the “escape clause” and limiting Ramsour to the limit contained in one
policy would be “repugnant” to Wyoming public policy. Id. at 39. 1
In Commercial Union Ins. Co. v. Stamper, 732 P.2d 534 (Wyo. 1987), the
court confronted a related question, which it articulated as: “whether an insured,
under a single automobile insurance policy encompassing several vehicles may
‘stack’ or ‘pyramid’ uninsured-motorists . . . provisions for recovery of injury and
medical expenses sustained in an accident involving one of the covered vehicles.”
Id. at 534-35 (emphasis in original). The plaintiff had a single policy covering
three vehicles, each with the same limit of uninsured motorists coverage.
Reviewing the same uninsured motorists statute at issue in Ramsour, the court
concluded that Stamper’s coverage for a single vehicle under the policy “met the
statutory requirement as a minimum coverage, and there is no stated statutory
public policy requiring aggregating . . . .” Id. at 537. The court held that
Ramsour was not controlling because Ramsour involved “aggregation of benefits
found in separate insurance policies, whereas this case involves a single insurance
1
We stress that, unlike the present case, Ramsour involved multiple
policies.
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policy.” Id. at 538. Because public policy did not require uninsured motorists
“benefits in one policy to be aggregated in all cases where an insured has an
unfortunate automobile accident with an uninsured motorist,” the court turned “to
the language of the insurance policy itself to establish the existence of any
limitations of liability.” Id. Reading Ramsour and Commercial Union together, it
appears that the Wyoming Supreme Court treats inter-policy stacking quite
differently from intra-policy stacking, and holds that public policy considerations
informing rules governing the former do not necessarily establish rules applicable
to the latter.
Wyoming’s uninsured motorists jurisprudence guided the state supreme
court when it confronted, for the first time, a case involving stacking of
underinsured motorists provisions in Aaron v. State Farm Mut. Auto. Ins. Co., 34
P.3d 929 (Wyo. 2001). In Aaron, plaintiffs “were the holders of five separate
policies of motor vehicle insurance,” they “paid a separate premium for
[underinsured motorists] coverage in each of the policies,” and they argued “that
the policies could be ‘stacked’ as they were entitled to personal insurance
protection provided by each of the five policies.” Id. at 930-31. For the first time
the court defined “stacking,” which it described as “the phenomenon of insureds
or claimants against them adding all available policies together to create a greater
pool in order to satisfy their actual loss.” Id. at 931 n.1, quoting 12 Lee R. Russ
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& Thomas F. Segalla, Couch on Insurance 3D, § 169:4 (1998). Proceeding with
that definition, the court first concluded that there was no “public policy that
would prohibit the aggregation of coverage by an insured who has purchased
multiple insurance policies,” and, after reviewing Ramsour and Commercial
Union, determined that “this court has generally approved the ‘stacking’ of
multiple insurance coverages . . . .” Id. at 932.
Based on these principles, the court established the rule that courts should
deny “aggregation of uninsured or underinsured motorist coverage from separate
policies for which separate premiums have been paid” only if the policies contain
anti-stacking provisions detailed “clearly and unambiguously in terms that a
lay-insured of ordinary intelligence could easily comprehend.” Id. The court
announced a presumption that “the payment of additional separate premiums . . .
was intended to purchase additional ‘stackable’ coverage commensurate with the
insured’s damages.” Id. at 933. Therefore, Aaron created a rule that where a
plaintiff has paid separate premiums for separate policies containing underinsured
motorists limits, underinsured motorists coverage will be stacked unless the
policies contain clear and unambiguous anti-stacking provisions.
Contrary to the conclusion of the court below, the Aaron rule is
inapplicable to this case. By its terms, the rule applies to inter-policy stacking
cases, and the Wyoming Supreme Court has determined that rules applying to
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inter-policy stacking do not necessarily extend to intra-policy stacking. See id. at
933 n.5 (“in our decision in Commercial Union the court was careful to
emphasize that the insured was attempting to stack multiple forms of coverage
within a single insurance policy.”). Additionally, the rule applies only in cases
involving “separate policies for which separate premiums have been paid.” Id. at
932 (emphasis added).
In this case, the record reveals that Mena pays a single premium for a
single Safeco policy. The declaration sheet shows a charge for a “total premium
for all vehicles” of $975.30. Under Wyoming law, it does not alter the analysis
that the declaration sheet breaks down the total premium by vehicle, and then
within each vehicle by form of coverage. See Commercial Union, 732 P.2d at 540
(rejecting plaintiff’s argument that he paid separate premiums because, even
though “an attached Fleet Schedule breaks down the premium to be paid by each
vehicle under each provision, a total under each provision is arrived at in
computing the total policy payments” and “[t]he declarations sheet shows a total
premium of $16 for uninsured-motorists insurance”). We view this matter as an
intra-policy stacking case involving the payment of a single premium. Therefore
the Aaron rule does not apply.
Rather than presuming that the Safeco policy permits stacking absent clear
and unambiguous anti-stacking language as would be required by Aaron, “we will
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defer to the language of the insurance policy itself” to determine if it permits
intra-policy stacking. Id. at 538. When interpreting the policy, we must adhere to
the following tenets of insurance agreement construction established by the
Wyoming Supreme Court: (1) words must be given their common and ordinary
meaning, and courts may not torture policy language to create an ambiguity; (2)
the parties’ intention, ascertained from the policy language when viewed in the
light of what the parties must reasonably have intended, receives primary
consideration; (3) the policy must not be construed so strictly as to contradict the
policy’s general object; (4) courts may not rewrite lawful policy terms; (5) absent
ambiguity, courts must enforce the policy according to its terms and not engage in
construction; (6) if the policy is ambiguous, courts must construe the contract
liberally in favor of the insured and strictly against the insurer. See Aaron, 34
P.3d at 933. Applying these canons of construction, and reviewing the grant of
summary judgment de novo, viewing the evidence and drawing reasonable
inferences in the light most favorable to the nonmoving party, we conclude that
the policy at issue does not permit intra-policy stacking. See Cooperman, 214
F.3d at 1164 (discussing the standard of review).
B
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The subject policy is divided into six parts pertaining to liability coverage,
medical payments coverage, uninsured/underinsured motorists coverage, auto
damage coverage, insured’s duties after a loss, and general provisions. Part C,
which concerns underinsured motorists coverage, contains a subsection entitled
“Limit of Liability” and provides as follows:
The limit of liability shown in the Declarations for “each person” for
Uninsured/Underinsured Motorists Coverage is our maximum limit of
liability for all damages including damages for care, loss of services
. . . arising out of bodily injury sustained by any one person in any
one accident.
Subject to this limit for “each person,” the limit of liability shown in
the Declarations for “each accident” for Uninsured/Underinsured
Motorists Coverage is our maximum limit of liability for all damages
for bodily injury resulting from any one accident. This is the most
we will pay regardless of the number of: . . . 3. Vehicles or premiums
shown in the Declarations. (emphasis in original).
In the Declarations, the limit of liability shown for “each person” is
$100,000. Part C unambiguously states that $100,000 is the maximum limit of
underinsured motorists liability for all damages arising out of bodily injury
sustained by any one person in any one accident, regardless of the number of
vehicles or premiums shown in the Declarations. Complying with this provision,
Safeco tendered $100,000 to Mena for damages arising out of the bodily injuries
she suffered.
Mena contends, however, that the policy is ambiguous, and that construing
it liberally in her favor, we should conclude that she is entitled to up to $300,000
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in underinsured motorists coverage. She raises two arguments in support. 2 First,
she contends that Part F of the policy, containing general provisions, creates an
ambiguity with respect to Part C, and should leave us in doubt as to whether the
policy in fact authorizes intra-policy stacking of underinsured motorists coverage.
Part F provides:
If this policy insures two or more autos or if any other auto insurance
policy issued to you by us applies to the same accident, the maximum
limit of our liability shall not exceed the highest limit applicable to
any one auto.
1. This provision does not apply to Uninsured/Underinsured
Motorists Coverage.
2
Mena also argues that because the district court for the District of
Montana decided against Safeco in a case raising similar issues, res judicata and
collateral estoppel apply to this case. See Moore v. Safeco, 954 F. Supp. 209 (D.
Mont. 1997). The parties in the litigation before us are not identical to the parties
in Moore; therefore res judicata does not apply. See Brown v. Dep’t of Corr., 108
P.3d 498, 500 (Mont. 2005) (“the parties or their privies must be the same” for res
judicata to apply). Moreover, because Moore applied Montana law to the policy
in question and we apply Wyoming law, the issues in the two cases are not
identical, thus making collateral estoppel inapplicable. Estate of Watkins v.
Hedman, Hileman & Lacosta, 91 P.3d 1264, 1272 (Mont. 2004) (collateral
estoppel requires that “the identical issue raised was previously decided in a prior
adjudication”). For the same reasons set forth in Montana state law, federal
common law would foreclose Mena’s res judicata and collateral estoppel
arguments. See Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1520 (10th Cir.
1990); but see Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508
(2001) (holding that, when deciding what claim-preclusive effect to give a
judgment of a federal court sitting in diversity, the “federally prescribed rule of
decision [is] the law that would be applied by state courts in the State in which
the federal diversity court sits.”).
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Mena asserts that this language constitutes a clear anti-stacking provision
that, by its terms, does not apply to underinsured motorists coverage. Although
Safeco disputes that characterization, and explains the policy language
differently, even accepting Mena’s version, she has not shown that the policy in
any way authorizes stacking of underinsured motorists coverage. Liberally
construed in Mena’s favor, this provision of Part F states that the maximum limit
of liability for bodily injury or medical payment coverage is the highest limit
applicable to any one auto, but that the provision does not apply to underinsured
motorists coverage. Part F does not authorize, ambiguously or otherwise,
stacking of underinsured motorists coverage; at most, it is an anti-stacking
provision, applicable to both inter- and intra-policy stacking, that does not apply
to uninsured or underinsured motorists coverage. Part C, however, contains clear
and unambiguous anti-stacking language applying solely to underinsured and
uninsured motorists coverage of multiple vehicles within the same policy. Part F
leaves open whether stacking underinsured motorists coverage is forbidden with
regard to intra-policy stacking; Part C answers that question unambiguously in the
affirmative.
Secondly, Mena contends that when Part C refers to “[t]he limit of liability
shown in the Declarations for ‘each person’ for Uninsured/Underinsured
Motorists Coverage,” it is ambiguous whether the language refers to the “each
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person” limit for a single vehicle or to the sum of the three “each person” limits
stacked together. On the declarations sheet, there is a column entitled “Limits”
for each vehicle covered by the policy. For each of the vehicles, the limit for
“Underinsured Motorists: Bodily Injury” is “$100,000 each person.” It is clear
that the “each person” limit of liability shown in the Declarations for
underinsured motorists coverage is $100,000. Adopting Mena’s view would
require us to “torture” the policy’s language. St. Paul Fire & Marine Ins. Co. v.
Albany County Sch. Dist., 763 P.2d 1255, 1258 (Wyo. 1988) (“the language of an
insurance policy will not be ‘tortured’ in order to create an ambiguity”). We are
buttressed in our conclusion by the fact that Part C provides that the “each
person” limit “is the most we will pay regardless of the number of . . . [v]ehicles
or premiums shown in the Declarations.” Such language would be absurd if the
“each person” limit meant the combined coverage for all three vehicles. 3
III
The insurance policy at issue does not authorize intra-policy stacking of
underinsured motorists coverage. We therefore AFFIRM the district court’s
3
Because Safeco did not unreasonably or without cause refuse to pay, or
delay payment of, the full amount it owed Mena, the district court correctly
dismissed the case with prejudice notwithstanding Mena’s claim for attorney’s
fees. See State Farm Mut. Auto. Ins. Co. v. Shrader, 882 P.2d 813, 834-35 (Wyo.
1994).
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order granting summary judgment to the defendants. We also DENY Appellant’s
motion for certification of questions to the Wyoming Supreme Court. 4
4
Mena urges that we certify the following two questions: “(1) Is the
presumption of stacking of underinsured coverages adopted in Aaron v. State
Farm, 34 P.3d 929, 933 (Wyo. 2001) an irrebutable presumption?” and “(2) If the
presumption is rebuttable, what evidentiary standards apply to a carrier’s attempts
to overcome the presumption?” Because the presumption established by Aaron
does not apply to this case, the answers to these questions are irrelevant to our
disposition of this appeal.
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