Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-05173/USCOURTS-ca10-94-05173-0/pdf.json

Parties Involved:
Cathy T. May
Appellant
National Union Fire Insurance Company of Pittsburgh, Pennsylvania
Appellee
Nationwide Mutual Insurance Company
Not Party
Jesse Worsham
Appellant
Shanda Worsham
Appellant

Document Text:

• PUBLISH 

FILED 

United States Coun of Appeals Tentll Circuit 

UNITED STATES COURT OF APPEALS MAY 3 0 1996 

TENTH cmcurr 

CATHY T. MAY, individually and as administratrix ) 

of the estate of Timothy L May; deceased, and as ) 

parent and next of kin to Erin L. May, Caroline E. ) 

May and Luke J. May, minor children; JESSE ) 

WORSHAM, husband; and SHANDA WORSHAM,) 

wtte, ) 

) 

Plaintiffs-Appellants and Cross-Appellees, ) 

v. 

NATIONAL UNION FIRE INSURANCE 

COMPANY OF PITTSBURGH, 

PENNSYLVANIA, 

) 

) 

) 

) 

) 

) 

) 

Defendant-Appellee and Cross-Appellant, ) 

NATIONWIDE MUTUAL INSURANCE 

COMPANY, 

Defendant. 

) 

) 

) 

) 

) 

Nos. 94-5173 & 

94-5181 

PATRICK FISHER 

Oerk 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF OKLAHOMA 

(D.C. No. 92-C-859-B) 

Jeffrey A. Glendening (Ann Makela Schneider and Steven W. Simcoe with him on the briefs) of 

Barkley, Rodolf & McCarthy, Tulsa Oklahoma, for Plaintiffs-Appellants and Cross-Appellees. 

William D. Perrine (Michael F. Smith and Benton T. Wheatley with him on the brief) of Rhodes, 

Hieronymus, Jones, Tucker & Gable, Tulsa, Oklahoma, for Defendant-Appellee and Cross-Appellant. 

Before BALDOCK, BRORBY and LUCERO, Circuit Judges. 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 1 
BRORBY, Circuit Judge. 

This cases arises out of an automobile accident. It involves a dispute over whether and to 

what extent an auto liability insurance policy included uninsured motorist coverage. The district court 

found the policy included uninsured motorist coverage by operation of Oklahoma law and set the 

limits of coverage at the statutory minimum of$10,000 per person and $20,000 per occurrence. The 

plaintiffs appealed, claiming the coverage limits should be higher. The defendant insurance company 

also appealed, claiming the policy included no uninsured motorist coverage. After preliminarily 

determining the policy did include uninsured motorist coverage, we certified a question to the 

Oklahoma Supreme Court and asked the court to determine the proper limits of coverage. The 

Oklahoma Supreme Court recently responded to our question. May v. National Union Fire Ins. Co. 

of Pittsburgh, Penn., 1996 WL 162436 (Okla. April9, 1996). For the reasons given below, we now 

affirm the district court. 

L Factual & Procedural Background 

The parties submitted this case to the district court on cross-motions for summary judgment. 

The material facts are not disputed. In September 1991, an automobile operated by an intoxicated 

driver struck an automobile occupied by Timothy May and Jesse Worsham, killing Mr. May and 

seriously injury Mr. Worsham. 1 At the time of the accident, Messrs. May and Worsham worked for 

1 The intoxicated driver carried liability insurance at the statutory minimum under Oklahoma law, 

$10,000 per person and $20,000 per occurrence. The Worshams' and Mays' losses exceeded this coverage, and 

this policy is not at issue in this case. 

2 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 2 
Gold Bond Building Products ("Gold Bond"), a division of National Gypsum Company ("Gypsum"). 

Messrs. May and Worsham were acting in the scope of their employment for Gold Bond when the 

accident occurred, and Gold Bond owned or leased the automobile in which they were traveling. 

Effective January 1, 1988, National Union Fire Insurance Company of Pittsburgh, 

Pennsylvania ("National Union"), issued to Gypsum a business auto liability policy (the "Policy") 

providing $5 million in liability coverage. In March 1988, Gypsum's Director of Risk Insurance 

executed a valid written rejection of uninsured or underinsured motorist coverage for the company's 

vehicles in all jurisdictions permitting such a rejection, including Oklahoma. This rejection 

corresponded with Gypsum's and National Union's intent throughout the time period relevant to this 

case that the Policy not include uninsured motorist coverage. 

From 1988 through 1991, National Union annually reissued the Policy to Gypsum At 

Gypsum's request, the Policy as effective January 1, 1989, lowered the liability coverage from $5 

million to $3 million, where it stood at the time of Messrs. May's and Worsham's accident. After this 

change in the provisions of the Policy, National Union did not offer Gypsum uninsured motorist 

coverage, nor did it obtain a written rejection from Gypsum declining such coverage. At no time after 

the January 1989 renewal and up through the 1991 accident did National Union offer Gypsum 

uninsured motorist coverage or obtain from Gypsum a rejection of uninsured motorist coverage. 

The Policy was last renewed prior to the accident on January 1, 1991. This 1991 version of 

the Policy erroneously included an endorsement that pwported to add uninsured motorist coverage 

3 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 3 
for Gypsum's vehicles in Oklahoma. The endorsement expressly conflicted with the 1991 Policy's 

declarations sheet, which indicated Gypsum intended to purchase uninsured motorist coverage only 

in states mandating such coverage. 

The Mays and Worshams filed a complaint for declaratory judgment against National Union, 

asking the district court to determine the extent of uninsured motorist coverage to which they were 

entitled under the Policy. The parties filed cross motions for summary judgment, contending there 

were no disputes as to the material facts and the district court could decide all issues as a matter of 

law. The Mays and Worshams contended the erroneous endorsement to the 1991 Policy resulted in 

Oklahoma uninsured motorist coverage equal to the Policy's $3 million bodily injury liability limit. 

In the alternative, they argued uninsured motorist coverage in the amount of$3,000,000 should be 

imputed to the Policy by operation of Oklahoma law. National Union claimed the Policy did not 

include any uninsured motorist coverage, and that if it did include such coverage the limit of liability 

was $10,000. Finding no material facts at issue, the district court addressed the parties' legal 

contentions. The court concluded: ( 1) the Oklahoma uninsured motorist endorsement mistakenly 

attached to the 1991 Policy did not become part of the Policy and the terms of the endorsement had 

no effect on the dispute; (2) by operation of Oklahoma law, uninsured motorist coverage became 

imputed to the Policy; (3) National Union's liability for the imputed coverage equaled the Oklahoma 

statutory minimum of $10,000. Both parties appealed. According to the Mays and Worshams, 

though the district court properly imputed uninsured motorist coverage to the Policy by operation 

4 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 4 
of law, it erred by setting the amount of coverage at $10,000 instead of $3 million. 2 National Union 

contends the district court improperly imputed uninsured motorist coverage to the Policy. 

ll. Applicable Law & Standard of Review 

The district court's jurisdiction over this matter was based on diversity of citizenship. 28 

U.S.C. § 1332. A federal court sitting in diversity applies the substantive law of the forum state. 

Barrett v. Tallon, 30 F.3d 1296, 1300 (lOth Cir.l994). We review de novo the district court's 

determinations of state law. Salve Regina College v. Russell, 499 U.S. 225,231 (199l);Magnum 

Foods, Inc. v. Continental Casualty Co., 36 F.3d 1491, 1497 (lOth Cir. 1994). Because Oklahoma 

is the forum state in this dispute, we will apply the most recent statements of Oklahoma law by the 

Oklahoma Supreme Court. Woodv. Eli Lilly & Co., 38 F.3d 510, 513 (lOth Cir. 1994). If"no state 

cases exist on a point, we turn to other 'state court decisions, federal decisions, and the general 

weight and trend of authority."' Barnardv. Fireman's Fund Ins. Co., 996 F.2d 246, 248 (lOth Cir. 

1993) (quoting Armijo v. Ex Cam, Inc., 843 F.2d 406,407 (lOth Cir. 1988)). 

We review de novo the grant or denial of summacy judgment, applying the same standard used 

by the district court under Fed. R Civ. P. 56( c). Applied Genetics Int'l, Inc. v. First Affiliated Sec., 

Inc., 912 F.2d 1238, 1241 (lOth Cir. 1990). Summary judgment is appropriate when "there is no 

2 Recognizing that we might conclude the district erred by imputing coverage, the Mays and Worshams 

alternatively argue the erroneously included uninsured motorist endorsement operated to include such coverage 

in the Policy as effective January 1, 1991. As the Mays and Worshams have stated, we are free to disregard this 

alternative argument, because, as explained below, we conclude the district court properly imputed uninsured 

motorist coverage to the policy by operation of law. 

5 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 5 
genuine dispute as to any material fact and ... the moving party is entitled to a judgment as a matter 

oflaw." Fed. R. Civ. P. 56(c). 

m. Analysis 

We begin our analysis with National Union's contention the district court erred by concluding 

uninsured motorist coverage should be imputed to the Policy by operation law. 

As we have already discussed, the Policy as effective January 1, 1989, lowered the liability 

coverage from $5 million to $3 million. After this change in liability coverage, National Union did 

not offer Gypsum uninsured motorist coverage, nor did it obtain a written rejection from Gypsum 

declining such coverage. As we explain below, given these undisputed facts, the district court 

properly imputed uninsured motorist coverage to the Policy. 

Okla. Stat. tit. 36 § 3636, as it existed in 1989/ required in part that no automobile liability 

insurance policies "shall be issued, delivered, renewed, or extended in [Oklahoma]" unless the policy 

included uninsured motorist coverage. Okla. Stat. tit. 36 § 3636(A) & (B). The section provided, 

however, that insureds could reject uninsured motorist coverage: 

The named insured shall have the right to reject such uninsured motorist 

coverage in writing, and except that unless the named insured requests such coverage 

in writing, such coverage need not be provided in or supplemental to a renewal policy 

where the named insured had rejected the coverage in connection with a policy 

previously issued to him by the same insurer. 

3 The statute was amended in 1990. See Oklahoma Laws 1990, c. 297, § 4, eff. Sept. 1, 1990. The 

relevance of the § 3636 as amended in 1990 will become apparent below. 

6 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 6 
ld § 3636(F). 

Thus, § 3636 relieves an insurer of its duty to include uninsured motorist coverage in a policy 

if the insured rejects the coverage in writing. If an insurer, however, fails to offer uninsured motorist 

coverage and does not secure a written rejection of such coverage, uninsured motorist coverage is 

imputed to the policy by operation oflaw. Beauchamp v. Southwestern Nat'/ Ins. Co., 746 P.2d 673, 

676 (Okla. 1987). As § 3636(F) indicates, this rule does not apply to "a renewal policy" where the 

insured has already rejected uninsured motorist coverage. In other words, an insurer's failure, in 

connection with a renewal policy, to offer uninsured motorist coverage or obtain a written rejection 

of uninsured motorist coverage from the insured will not result in imputed coverage. See id at 675-

77. 

The Mays and Worshams contend that the change in liability coverage from $5 million to $3 

million in the 1989 Policy constituted a new policy that required National Union to offer uninsured 

motorist coverage and obtain a written rejection of such coverage from Gypsum. Given that National 

Union did not do these things, the Mays and Worshams assert the district court properly imputed 

uninsured motorist coverage to the Policy. National Union claims the 1989 Policy was merely a 

renewal and that it was not required to offer uninsured motorist coverage because Gypsum had 

already properly rejected uninsured motorist coverage in writing in 1988. We must decide whether 

the 1989 Policy constituted a renewal or a new policy. 

The Oklahoma Supreme Court provided guidance on this issue in Beauchamp, in which it 

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Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 7 
explained: 

In 36 O.S. 1981 § 3636(F), the Legislature has set forth a narrow 

pronouncement which relieves insurers from the burden of procuring a written 

rejection of uninsured motorist coverage whenever an existing policy is renewed. 

This pronouncement, however, must be viewed in the context of the explicitly 

announced legislative policy set forth at 36 O.S.1981 § 3636(A) which is that 

uninsured motorist coverage must be offered with each policy of insurance. To give 

full effect to the overall policy of section 3636 the provision of subsection (F) must 

'be viewed as strictly limited to true renewals of existing insurance policies, that is, 

situations where such renewals are made without effecting a material change or 

departure from the provisions of the original policy. 

ld at 676. 

Given the Oklahoma Supreme Court's admonition to read§ 3636(F) narrowly, we conclude 

that the change in liability coverage from $5 million to $3 million in 1989 "effect[ed] a material 

change or departure from the provisions" of the Policy as originally written in 1988. !d.; see Hartford 

Accident & lndem. Co. v. Sheffield, 375 So.2d 598, 600 (Fla. Dist. Ct. App. 1979) (holding that 

when a policy is reissued with significantly lower liability coverage and premiums it is a new policy 

and not merely a renewal) (cited without disapproval in Beauchamp, 746 P.2d at 675 n.2). In fact, 

in its response to our certified question in this case, the Oklahoma Supreme Court agreed that the 

change in liability coverage in 1989 took the 1989 Policy out of§ 3636(F)'s renewal exception: "We 

agree with the federal court that the $2,000,000.00 decrease iii liability coverage was a 'material 

change' ofNational Gypsum's policy as contemplated by Beauchamp. A material change or departure 

from the provisions of an original policy is tantamount to the issuance of a new policy under 36 0. S. 

§ 3636." May, 1996 WL 162436 *1 n. 2. 

8 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 8 
Since the 1989 Policy was tantamount to a new policy, National Union was required by 

§ 3636 to offer uninsured motorist coverage and obtain from Gypsum a written rejection of such 

coverage. Okla. Stat. tit. 36 § 3636. National Union did not satisfy these duties; therefore, the 

district court properly concluded that uninsured motorist coverage should be imputed to the Policy 

by operation oflaw. Beauchanzp, 746 P.2d at 676. 

National Union makes much of the fact that "[t]he intent of the parties here demonstrates that 

Nation Gypsum wanted to reject [uninsured motorist] coverage in all jurisdictions where rejection 

is permitted." Though National Union accurately descnbes Gypsum's intent with respect to uninsured 

motorist coverage, National Union has not persuaded us that the insured's subjective intent has any 

bearing on the issue of imputed coverage. As the Oklahoma Supreme Court has explained: 

[1]he burden of proof is upon the insurer to come forward with a written rejection in 

order to relieve the insurer from its duty to provide the statutory uninsured motorist 

coverage. Allegations of oral offers of uninsured motorists coverage fall short of the 

tenor of proof required by 36 O.S. 1981 § 3636, for there is but one statutorily 

sanctioned method by which the mandatory uninsured motorist coverage provided for 

persons insured under a liability policy may thereafter be rejected. 

Moon v. Guaranty Ins. Co., 764 P.2d 1331, 1335 (Okla. 1988) (emphasis added). 

We now tum to the issue ofhow much coverage should be imputed to the Policy. The Mays 

and Worshams claim the limits of the imputed coverage should equal the limits of the Policy's liability 

coverage, or $3 million. National Union contends the limits should be set at the statutory minimum 

for uninsured motorist coverage, or $10,000 per person and $20,000 per occurrence. See Okla. Stat. 

tit. 36 § 3636(B); Okla. Stat. tit. 47 § 7-204(a). In response to our certified question, the Oklahoma 

9 

Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 9 
Supreme Court resolved this issue in favor of National Union. Below we excerpt a substantial 

portion of the Oklahoma Supreme Court's opinion: 

As a preliminary issue, we must determine whether§ 3636 as amended in 

1990, rather than the pre-1990 version, governs the insurance policy in this case. 

National Gypsum's policy was issued in 1988 and was renewed annually. The last 

renewal prior to the September 1991 accident occurred on January 1, 1991. Title 36 

O.S. Supp.1990 § 3636, which embraced the 1990 amendments, took effect on 

September 1, 1990. In Cofer v. Morton, 784 P.2d 67, 70 (Okla.1989), this Court held 

that "[r]ights of recovery under the Uninsured Motorist Act[§ 3636] are governed 

by the statute in effect on the date of issuance or last renewal of the policy against 

which an uninsured motorist claim is made." Accord McSorley v. Hertz Corp., 885 

P.2d 1343, 1344 n. 1 (Okla.1994); Uptegraft v. Home Ins. Co., 662 P.2d 681, 684 

n. 2 ( Okla.1983 ). As previously set forth, UM coverage was imputed to National 

Gypsum's policy before the 1990 changes to§ 3636. However, the plaintiffs' rights 

of recovery are governed by the statute in effect on the date of the last renewal of 

that policy. The version of§ 3636 in effect on the date of the policy's last renewal on 

January 1, 1991, was 36 O.S. Supp.1990 § 3636. Thus, the amount ofUM benefits 

the plaintiffs may recover under the policy is governed by the amended version of the 

statute. 

Prior to its amendment in 1990, § 3636 provided inter alia that every 

automobile liability insurance policy issued in Oklahoma must include provisions for 

UM coverage; that UM coverage must be in an amount not less than $10,000 per 

person and $20,000 per accident; that insurers must offer increased limits of UM 

coverage not to exceed the policy's liability limits; and that insureds had the right to 

reject UM coverage in writing. This statute was interpreted in Moser v. Liberty Mut. 

Ins. Co., 731 P.2d 406 (Okla. 1986), as follows: 

This Court has stated that the intent of the uninsured motorist 

legislation is to afford to one insured under his own liability insurance 

policy the same protection in the event he is injured by an uninsured 

motorist as he would have had if the negligent motorist had carried 

liability insurance. In subsection (B) of section 3636, it is provided 

that the uninsured motorist coverage provided as a part of a liability 

policy shall not be less than that required under 47 O.S.1981 § 7-204, 

with the insured to have the option to purchase increased limits of 

liability not to exceed the limits provided for bodily injury liability 

under the policy. Section 7-204 sets the minimum limits of liability 

coverage required to be carried by all owners of vehicles registered in 

the State of Oklahoma. 

10 

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The pwpose of the uninsured motorist provision, when viewed 

in light of the requirement that it provide minimum standards of 

protection, is that it place the insured in the same position he would 

have been in if the negligent uninsured motorist had complied with 

Oklahoma laws concerning financial responsibility. 

ld at 408 (footnotes omitted). Accord McSorley v. Hertz Corp., 885 P.2d 1343, 

1348 (Okla. 1994);Mann v. Farmers Ins. Co., 761 P.2d 460 (Okla. 1988). Similarly, 

in Cofer v. Morton, 784 P.2d 67, 71 (Okla. 1989), we stated, "The intent ofthe 

legislature as mandated in § 3636(F) is to have a statutory minimum of uninsured 

motorist coverage in all automobile liability insurance policies unless these minimum 

amounts are rejected in writing .... " 

The 1990 amendments to§ 3636 made minor changes to subsections (B) and 

(F) in ways not relevant here and added subsections (G), (H) and (I). Subsections (G) 

and (I) are not at issue in this case. The plaintiffs rely on the language of subsection 

(H) for their argument that imputed UM coverage should be equal to liability limits. 

Subsection (H) states in relevant part: 

H The offer of the coverage required by subsection B of this section 

shall be in the following form which shall be filed with and approved 

by the Insurance Commissioner. The form shall be provided to the 

proposed insured in writing separately from the application and shall 

read as follows: 

OKLAHOMA UNINSURED MOTORIST COVERAGE LAW 

Oklahoma law gives you the right to buy Uninsured Motorist 

coverage in the same amount as your bodily injury liability coverage. 

THE LAW REQUIRES [US] TO ADVISE YOU OF TillS 

VALUABLE RIGHT FOR THE PROTECTION OF YOU, 

MEMBERS OF YOUR FAMILY, AND OTHER PEOPLE WHO 

MAY BE HURT WHILE RIDING IN YOUR INSURED VEHICLE. 

YOU SHOULD SERIOUSLY CONSIDER BUYING TillS 

COVERAGE IN THE SAME AMOUNT AS YOUR LIABILITY 

INSURANCE COVERAGE LIMIT.... THE COST OF TillS 

COVERAGE IS SMALL COMPARED WITH THE BENEFITS! 

36 O.S. Supp.1990 § 3636(H) (emphasis in original). 

Plaintiffs assert that the language in subsection (H) which urges insureds to 

purchase UM coverage in the same amount as their liability coverage indicates a 

change in the legislative intent ascribed to § 3636 by our pre-1990 cases. We 

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... 

disagree. The fundamental rule of statutory construction is to ascertain and, if 

poSSJ.ole, give effect to the intention and purpose of the Legislature as expressed in a 

statute. Ledbetter v. Oklahoma Bev. Laws Enforcement Comm'n, 764 P.2d 172, 179 

(Okla.1988). In so doing, "relevant provisions must be considered together, where 

possible, to give force and effect to each other." ld Upon review of§ 3636 in its 

entirety, we do not believe that the addition of subsection 3636(H) signified a change 

in the legislative intent previously ascn"bed to the statute. 

The 1990 amendments did not alter in any significant respect the basic 

components of the statute as outlined above. The statute continues to require that 

every liability insurance policy contain a provision for UM coverage, that UM 

coverage be offered in amounts between the statutory minimum and the liability limits 

of the policy, and that the insured has the right to reject UM coverage in writing. We 

deduce that the newly enacted subsection (H) was created to accomplish two 

objectives. Primarily, subsection (H) mandates that a standardized written form 

"shall" be used by every insurer in connection with an offer ofUM coverage. The 

particular form to be used is included in the provision. This legislative mandate 

appears to have been an appropriate response to the multitude of Oklahoma cases 

that addressed, under a pre-1990 version of § 3636, insurers' failure to offer UM 

coverage or obtain written rejection thereof Subsection (H) also has the objective 

of encouraging insureds, via the mandatory form, to purchase UM coverage in the 

same amount as their bodily injury liability limits. In short, the amendment mandates 

the use of a standardized form and encourages the purchase of maximum UM 

coverage. Encouragement and mandate are two entirely different things. Neither the 

pre-1990 nor amended versions of§ 3636 dictate the result plaintiffs seek here. 

In his separate opinion in State Farm Mut. Auto. Ins. Co. v. Wendt, 708 P.2d 

581 (Okla.1985), Justice Opala descn"bed the purpose of§ 3636 as it existed in 1981. 

We believe that his intetpretation applies with equal force to the version of§ 3636 in 

effect today: 

The UM statute does indeed contemplate that insureds may need 

additional coverage. This is doubtless why insurance companies are 

required to offer increased limits of liability.... If no UM coverage at 

all is desired, named insureds have the right to reject it in writing. 

UM protection is, then, only conditionally mandated. Its 

effectiveness as a public benefit measure is initially controlled by 

actions of the named insured of the policy. 

While the general public is shielded against financially 

irresponsible motorists by the public liability coverage that is 

mandated by the Financial Responsibility Act [47 O.S. § 7-204], the 

UM statute is designed to compel insurers to provide protection only 

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Appellate Case: 94-5173 Document: 01019279335 Date Filed: 05/30/1996 Page: 12 
for that insured who wishes not to reje9t the minimum protection 

against loss occasioned by an uninsured motorist. In short, the former 

act commands vehicle owners to maintain public liability protection, 

while the latter act -- a mandate to insurers -- directs that, absent the 

insured's written rejection, an automobile policy must include 

minimum UM coverage. The lone, though doubtless the most 

revealing, nexus between the two enactments is found in the mention 

made in§ 3636(B) of the minimum amount of liability coverage that 

is mandated by the financial responsibility law. This reference plainly 

demonstrates a legislative intent to confine the public policy mandate 

for the statutory UM coverage level to no more than the minimum 

amount of insurance prescribed by law for public liability protection. 

[Wendt, 708 P.2d at 588 (Opala, J., concurring in part and dissenting in part) 

(emphasis in origina~ footnotes omitted).] 

An insurance coverage contract required by § 3636 must be hoerally construed 

in favor of the object to be accomplished. State Farm Auto. Ins. Co. v. Greer, 777 

P.2d 941, 942 (Okla. 1989). However, once it appears that the legislative purpose 

of§ 3636 has been served, the statute's mandate is satisfied. Moser v. Liberty Mut. 

Ins. Co., 731 P.2d 406, 409 (Okla. 1986). See also Equity Mut. Ins. Co. v. Spring 

Valley Wholesale Nursery, Inc., 747 P.2d 947, 953 (Okla. 1987). "Consequently, 

freedom-of-contract principles control as to any vehicle coverage in excess of that 

required by statute." Equity Mut., 747 P.2d at 953 (footnote omitted, emphasis in 

original). 

As previously stated, the legislative intent underlying § 3636 is that every 

automobile liability insurance policy issued in this state have a statutory minimum of 

uninsured motorist coverage unless that minimum amount is rejected in writing. That 

objective was not altered by the 1990 amendments to the statute. Where an insurer 

fails to offer in writing or obtain a written rejection of UM coverage such that UM 

coverage is imputed to an insured's policy as a matter of law, we hold that the 

mandate of§ 3636 is satisfied by imputation ofthe minimum limits ofUM coverage 

required by statute. To impute a higher amount ofUM coverage would go beyond 

the mandate of§ 3636. 

In the present case National Union, in violation of§ 3636, failed to offer or 

secure a written rejection of UM coverage after National Gypsum effectuated a 

material change in its insurance policy. Thus, UM coverage was imputed to the 

policy as a matter oflaw. The amount of the imputed coverage is dictated by 36 O.S. 

Supp.1990 § 3636(B) and 47 O.S.1991 § 7-204(a) and equals the statutory minimum 

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of UM coverage prescribed by law for public liability protection: $10,000.00 per 

person and $20,000.00 per accident. 

May, 1996 WL 162436 *2-6 (footnotes omitted). 

For the reasons given above, the judgment of the district court is AFFIRMED. 

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