Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02688/USCOURTS-ca10-88-02688-0/pdf.json

Parties Involved:
Sandy Davis
Appellant
Ted Davis
Appellant
Transamerica Insurance Company
Appellee

Document Text:

FILED 

United States Court of Appeals Tenth Circuit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT SEP 12 1991 

ROBERT L. HOECKER 

TED DAVIS and SANDY DAVIS, 

individually and as parents 

of Patricia Lynn Davis, a 

minor, deceased, 

Plaintiffs-Appellants, 

v. 

TRANSAMERICA INSURANCE 

COMPANY, 

Defendant-Appellee. 

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Clerk . 

No. 88-2688 

(D.C. Civil No. 88-379-P) 

(W.D. Okla.) 

ORDER AND JUDGMENT* 

Before HOLLOWAY, Chief Judge, SETH and McWILLIAMS, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); Tenth Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 88-2688 Document: 010110090149 Date Filed: 09/12/1991 Page: 1 
This is an action against an insurance carrier, Transamerica 

Insurance Company, seeking to collect under the uninsured motorist 

provisions of a commercial policy. The policy was a Garage 

Liability policy issued to Ted Davis Yamaha, Inc. which was a 

family owned and operated corporation but a separate legal entity. 

The daughter of the owners was killed in an automobile accident 

with an uninsured motorist while riding in a car not owned by the 

corporation or the family members, and driven by an unrelated 

third person. The daughter worked for the company part-time, but 

received no regular compensation, was not a shareholder, and was 

not an officer. 

The trial court entered summary judgment for the defendant 

concluding that the policy was not ambiguous and there was no 

coverage by the policy for the accident described in plaintiff's 

complaint. The court also entered summary judgment on plaintiff's 

cause of action asserting bad faith on the part of the insurance 

company. 

The policy provides coverage as an "insured" for a person in 

a "covered auto," but the car in which the daughter was riding was 

not within that definition. The policy also defines an "insured" 

as "you or any family member." It defines "a family member," as 

might be expected, in a way with no applicability whatever to a 

corporate "you. " 

The policy was on a state approved form designed to be used 

for any type of business utility by checking an appropriate box; 

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Appellate Case: 88-2688 Document: 010110090149 Date Filed: 09/12/1991 Page: 2 
thus "Individual," "Corp.," "Partnership," "Joint Venture" and 

"Other." The "Corp." box had been checked. 

The authorities generally hold that in these circumstances 

the uninsured motorist coverage does not apply to family members 

of the corporate officer, and the "family member" of "you" 

language is disregarded. See Sears v. Wilson, 704 P.2d 389 (Kan. 

App.), where similar policy provisions were considered. See also 

for rejection of inconsistent language, Okla. Stat. Ann. tit. 15, 

§ 169, Contracts. 

The policy language is construed against the insurer, but 

when this is done, the policy here concerned does not contain 

ambiguities and its construction is a matter of law. It expressly 

covers any person who has suffered injuries while in a "covered 

auto." It thus serves a policy purpose, a corporate purpose, and 

is not without substance. The Oklahoma courts have directed that 

the construction of an insurance policy be a "natural and 

reasonable one, fairly construed to effectuate its purpose." 

American Iron & Machine Works Co. v. Ins. Co. of North America, 

375 P.2d 873, 875 (Okla.). 

The plaintiffs urge the application of a federal case arising 

in Oklahoma, Aetna Y...!.. Craig, CIV-81-1720-T (Okla.). However, the 

court there stated that there was no definition of a "family 

member" in the policy. This was a significant factor in that 

court's construction. This factor, of course, is not present in 

the case before us. 

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Appellate Case: 88-2688 Document: 010110090149 Date Filed: 09/12/1991 Page: 3 
There were no Oklahoma decisions on point. Plaintiffs had 

urged consideration of Cothren v. Emcasco Ins. Co., 555 P.2d 1037 

(Okla.). We do not consider it applicable as there the issue of 

coverage for uninsured motorist benefits was under a policy 

already covering an insured. In addition the policy was a family 

policy. The trial court referred to a large number of cases from 

other jurisdictions which reached the conclusion it did. We agree 

with the conclusions reached by the trial court as to what the 

state law would be in its jurisdiction. 

We also agree with the summary judgment entered on the bad 

faith cause of action. 

Chief Judge Holloway may file a separate opinion. 

AFFIRMED. 

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Entered for the Court 

Oliver Seth 

Circuit Judge 

Appellate Case: 88-2688 Document: 010110090149 Date Filed: 09/12/1991 Page: 4