Case Title: BP AMERICA, INC. v. STATE AUTO PROPERTY & CASUALTY INSURANCE CO.

Citation: 

Docket Number: 102299

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2005-09-20T00:00:00Z

Document:
BP AMERICA, INC. v. STATE AUTO PROPERTY & CASUALTY INSURANCE CO.  BP AMERICA, INC. v. STATE AUTO PROPERTY & CASUALTY INSURANCE CO. 2005 OK 65 148 P.3d 832 Case Number: 102299 Decided: 09/20/2005 THE SUPREME COURT OF THE STATE OF OKLAHOMA BP AMERICA, INC., Plaintiff/Appellant, v. STATE AUTO PROPERTY & CASUALTY INSURANCE COMPANY, Defendant/Appellee. CERTIFIED QUESTIONS OF LAW FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA ¶0 The United States District Court for the Northern District of Oklahoma certified two first impression questions of Oklahoma law under the Revised Uniform Certification of Questions of Law Act, "Whether, under Oklahoma Law, the term 'any insured' in an 'Auto Exclusion' clause of a commercial general liability policy excludes from coverage all automobile occurrences attributable to any of the insureds?" The tribunal also questions: "Whether, under Oklahoma Law, the inclusion of both an 'Auto Exclusion' clause and a 'separation of insureds' clause in a commercial general liability policy creates an ambiguity in the contract?" We answer the initial question, "yes", and, under the facts presented, the second question, "no". CERTIFIED QUESTIONS ANSWERED. James C. Lang, G. Steven Stidham, Brian S. Gaskill, SNEED LANG, P.C., Oklahoma City, Oklahoma, for the plaintiff/appellant. Lawrence R. Murphy, Jr., Pansy Moore-Shrier, ROBINETT & MURPHY, Tulsa, Oklahoma, for the defendant/appellee. WATT, C.J.: ¶1 The United States District Court for the Northern District of Oklahoma certified two first impression questions of Oklahoma law to this Court under the Revised Uniform Certification of Questions of Law Act, "1. Whether, under Oklahoma Law, the term 'any insured' in an 'Auto Exclusion' clause of a commercial general liability policy excludes from coverage all automobile occurrences attributable to any of the insureds?; and 2. Whether, under Oklahoma Law, the inclusion of both an 'Auto Exclusion' clause and a 'separation of insureds' clause in a commercial general liability policy creates an ambiguity in the contract?" We answer the initial question, "yes". Our answer to the second question is "no". Our first determination: is supported by the plain language of the commercial general liability policy (general liability policy) clearly excluding all coverage for automotive incidents involving any insured; CERTIFIED FACTS ¶2 In June of 2001, the plaintiff/appellant, B.P. America, Inc. (insured/BP), entered into a construction contract with Doyal W. Rowland Construction, Inc. (Rowland). Besides being obligated under the contract to do certain construction work, the contract also required B.P. to obtain $1,000,000.00 in general liability coverage and automotive liability insurance.3 ¶3 As required under the construction contract, the defendant/appellee, State Auto and Casualty Insurance Company ¶4 On July 23, 2002, a multi-car accident occurred involving a dump truck driven by a Rowland employee. Three individuals were fatally injured and a fourth sustained significant injuries. Multiple lawsuits were filed as a result of the accident. In different combinations, the suits named the employee, Rowland, BP and the insurer as defendants. All the personal injury and wrongful death lawsuits were settled with the insurer contributing $1,000,000.00 to the settlement pursuant to the automotive liability policy. ¶5 On June 16, 2004, the insured filed suit against the insurer in federal court seeking recovery under the general liability policy. Recognizing that the lawsuit involved issues of first impression Oklahoma law, the federal court certified questions to this Court pursuant to the Revised Uniform Certification of Questions of Law Act, WELL-SETTLED OKLAHOMA STANDARDS FOR INSURANCE CONTRACT CONSTRUCTION ¶6 Insurance policies are contracts DISCUSSION ¶7 a. Usage of the term "any insured" in an exclusionary clause clearly and unambiguously indicates that coverage will be denied to all insureds -- even innocent parties. ¶8 The exclusionary clause provides in pertinent part: ". . . 2. Exclusions This insurance does not apply to: . . . g. Aircraft, Auto Or Watercraft 'Bodily injury' or 'property damage' arising out of the ownership, maintenance, use or entrustment to others of any . . . 'auto' . . . owned or operated by or rented or loaned to any insured. Use includes operation and 'loading or unloading'. . . ." ¶9 The insured maintains that the language is not so clear as to be unambiguous and that "any" should be read, not in the sense of "all", but as "the". Under this interpretation, the insured contends that only negligent insureds should be denied coverage. The insurer asserts that the exclusion clearly and unambiguously negates coverage to all insureds when any individual insured's actions fall within the exclusionary clause. It argues that the provision cannot be interpreted to allow coverage to an innocent insured when all automotive liability coverage of any insured is specifically disallowed. ¶10 The overwhelming number of courts, addressing policy language similar to that at issue here, determines, as a matter of law, that the term "any insured" in an exclusionary clause is unambiguous and expresses a definite and certain intent to deny coverage to all insureds -- even to innocent parties.17 These jurisdictions recognize that to impose liability on the insurer would raise coverage where none was intended and no premium was collected.18 Furthermore, the majority acknowledges that only by ignoring the plain language of the contract relating to "any insured" will an ambiguity be created.19 Insureds have not been allowed to avoid the clear application of exclusions relating to "any insured" by conjuring up ambiguities nor have they convinced courts to apply tortured interpretations to create them.20 One court has clearly instructed insurers that exclusions will be upheld where the clause refers to "any insured" as opposed to "a insured", "an insured" or "the insured".21 ¶11 As does the majority, this Court upholds coverage exclusions where policy language is clear and unambiguous. ¶12 In Bituminous Casualty Corp. v. Cowen Construction, Inc., ¶13 We again addressed exclusions under a general liability policy in Dodson v. Saint Paul Ins. Co., ¶14 We upheld an automotive liability exclusion in a homeowner's policy in Phillips v. Estate of Greenfield, ¶15 We find the reasoning of the majority persuasive. It is also consistent with this Court's interpretative position on general liability insurance contracts expressed in Cowen and Dodson ¶16 The first certified question is answered in the affirmative. We hold that, under Oklahoma Law, the term 'any insured' in an 'Auto Exclusion' clause of a commercial general liability policy excludes from coverage all automotive occurrences attributable to any of the insureds. ¶ 17 b. The inclusion of a severability clause in an insurance policy does not render an otherwise clear and unambiguous exclusionary clause questionable. ¶18 The commercial policy's severability clause is denoted as "Separation of Insureds" providing: "Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately as to each insured against whom claim is made or 'suit' is brought." ¶19 The insured argues that, even if the exclusionary clause is clear when read in isolation, the insurer's inclusion of a severability of interests provision renders it ambiguous. The assertion rests on an argument that if, under the severability clause, each insured is treated as having a separate policy, only the negligent insured should be denied coverage. In contrast, the insurer insists that, by ignoring the term "any insured" in the exclusionary clause and imposing coverage where none was intended, otherwise clear and unambiguous policy provisions are rendered meaningless. ¶20 Severability clauses are intended to spread protection, to the limits of coverage, among all the named insureds. Some courts determine that the existence of an exclusion coupled with a severability clause raises an ambiguity extending coverage to innocent insureds under the policy. ¶21 Other courts note that utilization of the term "any insured" in the presence of a severability clause does not create an ambiguity giving rise to insurance coverage where the exclusion is clear. ¶22 The majority/minority split is not as dramatic on this issue as it is in relation to interpretation of the exclusionary provision. Nevertheless, clearly most courts addressing the issue of whether a severability clause will render a clear and unambiguous exclusionary provision doubtful determine that the clear language of the exclusion must prevail. ¶23 In the context of exclusionary language relating to "any insured", the majority determines that the severability clause's only effect is to alter the meaning of the term "the insured" to reflect who is seeking coverage. ¶24 Here, the first indication that automotive coverage was never anticipated under the general liability policy is the contract between the insured and Rowland. The contract specifically required two policies: one for general liability insurance and the second for automotive liability insurance. The contract is also instructive in that it recognized the general liability policy would contain some exclusions from coverage. The only exclusion that the contract specifically provides shall be deleted from the general liability policy is one for watercraft operation, if work is to be done over navigable waters. It does not require that the automotive liability exclusion be deleted. ¶25 The second indication that automotive liability coverage was not intended to be included in the general liability policy appears on the series one contractor's general liability policy common declaration's page. Premiums were collected for commercial general liability coverage and an item delineated as "contractors special coverage". There is no premium listed for automotive liability coverage. ¶26 The third clue that no automobile liability coverage was intended under the general liability insurance contract is seen in the policy on a page denominated as "Commercial General Liability Coverage Form". It specifically provides that various provisions in the policy restrict coverage. It then lists the coverages for bodily injury and property damage and the exclusions. The automotive liability exclusion appears as §2(g). ¶27 The position taken by those jurisdictions recognizing that a clear and unambiguous exclusion should not be negated by a severability clause is most consistent with the manner in which this Court views policy exclusions. Wynn v. Avemco Ins. Co., ¶28 We have already determined that the automotive liability exclusion is clear and contains no ambiguity. The contract between the insured and Rowland anticipated that there would be two policies purchased -- one for general liability and one for automotive liability. ¶29 We answer the second certified question in the negative. Under the facts presented, where the exclusion is clear and unambiguous and there is no indication that automotive liability coverage was intended in the general liability policy, the inclusion of both an "Auto Exclusion" clause and a "separation of insureds" clause in a commercial general liability policy will not create an ambiguity in the contract. CONCLUSION ¶30 Upholding the vehicle exclusion in the general liability policy does not burden the insured with an unjust result. The liability limits of the automotive policy have been paid, and there is no evidence that a specific premium was collected for automotive coverage in the general liability policy. CERTIFIED QUESTIONS ANSWERED. WATT, C.J., WINCHESTER, V.C.J.,HARGRAVE, OPALA, KAUGER, TAYLOR, COLBERT, JJ. - CONCUR. LAVENDER, J. - CONCUR IN RESULT. EDMONDSON, J. - NOT PARTICIPATING. FOOT