F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
September 15, 2006
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
STATE AUTO INSURANCE
C OM PA N Y ,
Plaintiff-Appellant,
No. 05-6333
v. (D.C. No. CIV-05-0259-F)
(W .D. Okla.)
PA U L CLIFFO RD ; A +
PRODUCTIO N PAIN TIN G, IN C.,
Defendants-Appellees.
OR D ER AND JUDGM ENT *
Before B ROR B Y and EBEL, Circuit Judges, and KANE, ** District Judge.
In this insurance coverage dispute, Plaintiff State Auto Insurance Company
(State Auto) appeals the district court’s grant of summary judgment in favor of
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and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.
**
The Honorable John L. Kane, Senior District Judge, United States District
Court for the District of Colorado, sitting by designation.
Defendants Paul Clifford and A + Production Painting, Inc. (A+). W e exercise
jurisdiction under 28 U.S.C. § 1291 and affirm.
On July 21, 2004, Paul Clifford, proprietor of A+, was operating a
motorcycle owned by himself and his ex-wife, Gina, when he was struck by
another vehicle operated by W esley Duty. Clifford sustained significant and
progressive injuries from the collision. Although Duty was deemed at fault, his
minimal insurance coverage was insufficient to satisfy Clifford’s claims.
Consequently, Clifford submitted an uninsured/underinsured motorist (U M ) claim
to State Auto under a commercial auto insurance policy issued to his business,
A+.
State A uto ultimately denied the claim based on language in the policy’s
UM endorsement. 1 State A uto asserted that the endorsement excluded Clifford
from UM coverage because he was occupying a vehicle he owned at the time of
1
The endorsement language at issue provides:
The follow ing is added to W HO IS AN INSURED:
Any individual named in the Schedule and his or her “family
members” are “insured” while “occupying” or while a pedestrian
when being struck by any “auto” you don’t own except:
Any auto owned by that individual or by any “family member.”
Aplt. App. at 124.
-2-
the collision. Thereafter, State Auto sought a declaratory judgment confirming
that it was not obligated to pay UM benefits under the terms of the endorsement.
The district court reviewed the endorsement and concluded that it was
ambiguous because it was susceptible to at least two plausible meanings. Aplt.
App. at 195. The court further concluded that in light of the ambiguity, Clifford
had a reasonable expectation of coverage. Id. at 196. Accordingly, the district
court granted summary judgment in favor of Clifford and A+. Id.
This appeal followed.
In diversity cases, the substantive law of the forum state governs the
analysis of the underlying claims, but federal law controls the ultimate procedural
determination of the propriety of the district court’s grant of summary judgment.
Eck v. Parke, Davis & Co., 256 F.3d 1013, 1016 (10th Cir. 2001). Accordingly,
we apply Oklahoma law to the substantive issues on appeal, and we review the
district court’s grant of summary judgment de novo, Gwinn v. Awmiller, 354 F.3d
1211, 1215 (10th Cir. 2004).
State Auto argues on appeal that the district court erred in finding the
endorsement ambiguous because it failed to apply the policy definitions to the
endorsement terms and read those terms in context. However, our review of the
district court’s order leads us to conclude that this argument is without merit.
First, the district court endeavored to parse the policy endorsement, but was left
“struggling to understand which phrases modify which objects in the
-3-
[endorsement] as a whole.” Aplt. App. at 194. Next, the court attempted to read
the endorsement terms in context, but found that a lack of punctuation throughout
the endorsement made it “difficult to understand where phrases stop and start and
to what they pertain.” Id. Thereafter, the court applied the policy definition to
the word “you” as used in the endorsement, but found that doing so only
“complicat[ed] things even more” because other language in the endorsement and
the declarations page left room to question whether Clifford and his ex-wife w ere
“‘named insureds’ for purposes of this particular endorsement.” Id. at 195.
Hence, the court concluded that the policy is ambiguous because the endorsement
is susceptible to at least tw o plausible meanings. Id. Having thoroughly
reviewed the district court’s order, the parties’ briefs, the record on appeal, and
the pertinent law, we agree with the district court’s ruling and affirm for
substantially the same reasons as set forth in the district court’s order.
State Auto also contends the district court erred in finding that the
endorsement’s ambiguity created a question of fact concerning the reasonableness
of Clifford’s expectation of coverage. This argument is also without merit.
Reasoning that the endorsement’s title, language, and the policy declarations page
made it reasonable to conclude that Clifford was a named insured for purposes of
the UM endorsement, the court determined that Clifford had a reasonable
expectation of coverage. Aplt. App. at 195-96. This holding is consistent with
Oklahoma law and policy governing insurance coverage disputes. M ax True
-4-
Plastering Co. v. U.S. Fid. & Guar. Co., 912 P.2d 861, 865 (Okla. 1996)
(indicating “in cases of doubt, words of inclusion are liberally applied in favor of
the insured and words of exclusion are strictly construed against the insurer”).
Therefore, perceiving no error, we affirm the district court’s ruling for
substantially the same reasons as set forth in that court’s order.
The judgment of the district court is AFFIRMED.
Entered for the Court
W ade Brorby
Circuit Judge
-5-