Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-06186/USCOURTS-ca10-92-06186-0/pdf.json

Parties Involved:
International Insurance Company
Appellant
MIC Property and Casualty Insurance Corp.
Appellee

Document Text:

PUBLISH 

F 1 LL 1) United States Co~rt <?f Appeale. Terith Ctrcu1t 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

APR O 6 1993 

ROBERT L. HOECKER 

Clerk 

MIC PROPERTY AND CASUALTY INSURANCE 

CORP., a Michigan corporation, 

Plaintiff-Appellee, 

v. 

INTERNATIONAL INSURANCE COMPANY, an 

Illinois corporation, 

Defendant-Appellant. 

No. 92 - 6186 

Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. CIV-91-1344-C) 

Submitted on the briefs: 

Tim N. Cheek of Cheek, Cheek & Cheek, Oklahoma City, Oklahoma, for 

Defendant-Appellant. 

John F. Percival of Cooper & Zorn, Oklahoma City, Oklahoma, for 

Plaintiff-Appellee . 

Before LOGAN and MOORE, Circuit Judges, and BELOT,* District 

Judge. 

LOGAN, Circuit Judge. 

* The Hono r a b le Monti L. Belo t, Di strict Judge, United Sta t e s 

Distric t Court f o r the Distric t o f Kansas, sitting by d e signation. 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 1 
Defendant International Insurance Company (International) 

appeals the district court's grant of summary judgment in favor of 

plaintiff MIC Property and Casualty Insurance Corporation (MIC) . 

Summary judgment is appropriate only if there is no genuinely disputed material issue of fact and the moving party is entitled to 

judgment as a matter of law. Fed. R. Civ. P. 56 (c) . Reviewing 

the district court's decision de novo, Applied Genetics Int'l, 

Inc. v. First Affiliated Sec . • Inc . , 912 F.2d 1238, 1241 (10th 

Cir. 1990), and viewing the record in the light most favorable to 

the nonmoving party, Deepwater Invs .• Ltd. v. Jackson Hole Ski 

Corp., 938 F.2d 1105, 1110 (10th Cir. 1991), we reverse in part 

and affirm in part. 1 

I 

This action for contribution between insurance companies 

stems from the tragic drowning of a young boy, on June 3, 1987, 

while he participated in a "free swim" at Oklahoma State University (OSU), as part of the National Youth Sports Program (NYSP), 

an athletic activity sponsored by the National Collegiate Athletic 

Association (NCAA) . At the time of the accident, the NCAA had 

obtained from MIC a general liability insurance policy covering 

the NYSP, effective from June 1, 1987, to June 1, 1988. That 

policy included as named insureds the NCAA and those institutions 

hosting the youth program, including OSU. 

1 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); 10th Cir. R. 34.1 . 9. The case is therefore ordered submitted without oral argument. 

2 

Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 2 
Also in effect at the time of the accident was another comprehensive general liability policy that the NCAA had obtained 

from International, policy No. 2760. That policy was effective 

from June 23, 1986, to June 23, 1987, and included the NCAA as a 

named insured but not osu. 

The child's estate commenced litigation in state court 

against the NCAA and OSU, as well as the Oklahoma State Board of 

Regents, alleging that the negligence of these entities caused the 

boy's drowning. Both MIC and International received notice of 

this lawsuit. Although International denied coverage and declined 

to participate in the state tort litigation, MIC provided a 

defense to both OSU and the NCAA, ultimately settling the state 

litigation for $400,000. 

MIC then commenced this federal diversity action, seeking 

contribution from International toward the amount of the settlement. The parties agree that Oklahoma law governs the issues in 

this case. In granting MIC's motion for summary judgment , the 

district court determined that MIC was entitled to contribution 

from International for one-half of the amount of the settlement. 

The first issue presented is whether International's policy 

No. 2760 provided coverage for the NCAA's liability arising from 

the estate's negligence claims. That policy stated that International would "pay on behalf of [the NCAA] all sums which the 

insured shall become legally obligated to pay as damages because 

of bodily injury . .. to which this insurance applies." 

Appellant's App., doc. 4, ex. A at 6. The policy described "Athletic Programs - Amate ur" as the general liability hazard covered 

3 

Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 3 
by this insurance. Id. at 7. By its clear terms, therefore, this 

policy covered the accident at issue. 

International argues that coverage under the policy was limited to championship events and that the victim was not a participant in such an event. Although there were several endorsements 

to the policy that specifically referred to championship events, 

see Appellant's App., doc. 4, ex. A at 10 (applying $5,000 deductible for liability resulting from bodily injury or property damage 

to championship events); id. at 17, General Change Endorsement# 4 

(addressing coverage "[w]ith respect[] to CHAMPIONSHIP EVENTS 

coverage"); id. at 31, General Change Endorsement# 15 (amending 

coverage "[w]ith respect[] to Championship Events"), nothing in 

the language of the policy limited coverage exclusively to championship events. 

International nevertheless argues that it was the NCAA's 

intent, in purchasing policy No . 2760, to obtain liability coverage only for championship events. Absent an ambiguity, however, 

the intent of the parties must be derived solely from the language 

of the insurance contract. See Tipton v. Pike, 550 F. Supp. 191, 

194-95 (W.D. Okla. 1982) (applying Oklahoma law). The determination of whether policy language is ambiguous is a matter of law, 

see Dodson v. St. Paul Ins. Co., 812 P.2d 372, 376 (Okla. 1991), 

and therefore appropriate for a summary judgment determination. 

We agree with the district court that the language of policy No . 

2760 is not ambiguous. The policy must therefore be construed 

according to its terms as written. See Frank v . Allstate Ins. 

4 

Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 4 
Co., 727 P.2d 577, 579-80 (Okla. 1986); see also Morrison Assurance Co . v. City of Opa-Locka, 389 So. 2d 1079, 1080 (Fla . Dist. 

Ct. App. 1980) (per curia.ml (insured city claimed it had intended 

coverage for accident in question; although" [t]hat may well be a 

valid statement of the city's intent, ... absent ambiguity in 

the contract terms, a contract of insurance must be given effect 

as written" ) . 

International next argues that its policy did not provide 

coverage for the accident because the victim was not a participant 

in a contest or exhibition of an athletic or sports nature sponsored by the NCAA, as those terms are defined by the policy. This 

argument misses the mark, however, because the question of coverage under this policy does not turn upon whether or not the victim 

was a participant. 

As originally issued, policy No. 2760 provided liability coverage for sums that the NCAA became legally obligated to pay as a 

result of bodily injury or property damage, see Appellant's App . , 

doc. 4, ex. A at 6, except that "the insurance [did] not apply to 

bodily injury to any person while practicing for or participating 

in any contest or exhibition of an athletic or sports nature sponsored by the [NCAA]," id. at 12. That exclusion i ncluded a definition of participant. Subsequently, the parties amended the policy to defi ne participant, with regard to that exclusion, as "any 

person while practicing for or participating in any contest or 

exhibition of an athletic or sports nature sponsored by the [NCAA] 

including any person permitted to enter any restricted area of 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 5 
competition while occupied by competitors." Id. at 22, General 

Eudorsement # 10. 

In November 1986, however, in exchange for the payment of an 

additional premium, the parties amended policy No. 2760 to delete 

the exclusion for participants in its entirety. Id. at 30, General Change Endorsement# 18. 2 That endorsement also provided for 

coverage of a participant's legal liability, except for incidents 

involving bodily injury to an NCAA employee or involving one 

player participant against another "while practicing for or participating in any contest or exhibition of an athletic or sport 

nature sponsored by the [NCAA]." Id. at 30. As a result of this 

amendment, therefore, at the time of the accident, the policy 

covered the NCAA for sums for which it became legally obligated to 

pay as a result of bodily injury, regardless of whether or not the 

injury was suffered by a participant. Under its clear terms, 

therefore, International's policy No. 2760 provided coverage for 

the accident at issue in this case. 

II 

In light of this conclusion, the next issue presented is 

whether MIC was entitled to contribution from International toward 

the amount of the settlement. "In order for there to be contribution among insurers, the interest, as well as the risk and the 

subject matter [insured], must be identical." Great w. Casualty 

Co. v. Truck Ins. Exch., 358 F.2d 883, 886 (10th Cir. 1966) 

2 This endorsement was originally captioned General Endorsement 

# 15. Id. at 30. Because there were two different endorsements 

numbered 15, h owever, General Endorsement # 19 changed the 

endorsement# 15 at issue here to endorsement# 18. Id. at 36. 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 6 
{applying Oklahoma law) . The policies of both MIC and International provided the NCAA with comprehensive general liability 

coverage for bodily injury resulting from its amateur athletic 

programs. As to the NCAA, these two policies insured the same 

interest, subject matter, and risk. Cf. Arizona Joint Underwriting Plan v. Glacier Gen. Assurance Co., 631 P.2d 133, 134-35 

(Ariz. Ct. App. 1981) {requiring contribution between liability 

insurers when first policy insured nurse and professional corporation, second policy insured only nurse, and third policy insured, 

among others, nurse, two doctors and professional corporation; as 

to the nurse, all three policies insured identical interest, subject matter and risk). MIC was therefore entitled to contribution 

from International toward the settlement unless precluded for some 

other reason. 

International argues that it is not liable for contribution 

toward the settlement at this juncture because there has not yet 

been a determination of the liability of its insured, the NCAA. 

Further, International asserts that the settlement of the state 

court litigation was made only on behalf of OSU and not on behalf 

of the NCAA. 

In the state court pleadings, the victim's estate alleged 

that the negligence of both OSU and the NCAA caused the death of 

the child. International's policy No. 2760 provided that International "shall have the right and duty to defend any suit against 

the insured seeking damages on account of [covered] bodily inj ury 

o r property damage, even if any of the alle gations of the suit are 

g r oundless, false o r fraudulent . " Appellant's App., doc. 

7 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 7 
4, ex. A at 6. Because the state court pleadings alleged claims 

covered by policy No. 2760, International had a duty to defend its 

insured against that state action, see generally Texaco, Inc. v. 

Hartford Accident & Indem., 453 F. Supp . 1109, 1112 (E . D. Okla. 

1978), despite its refusal to do so. 

In exchange for the payment of $400,000 , the victim's estate 

agreed to dismiss and release its claims against both OSU and the 

NCAA. Appellant's App., doc. 9, ex. D. The settlement did not 

address the culpability of the parties nor did it specifically 

apportion the settlement amount between defendants. 

As a result of the settlement of the state court action, the 

NCAA became legally obligated to pay damages resulting from bodily 

injuries the victim had suffered during an amateur athletic program. International's policy No. 2760 covered such an obligation. 

Having refused to participate in the NCAA's defense and to take 

part in the settlement, despite its duty to defend its insured 

against these claims, International may not seek to litigate the 

issue of the parties' negligence at this late juncture. See Home 

Indem. Co. v. Mead Reinsurance Corp., 800 P . 2d 46, 48-49 (Ariz. 

Ct. App. 1990 ) (citing Pacific Indem. Co. v. Linn, 590 F . Supp. 

643, 650-51 (E.D. Pa. 1984), aff'd, 766 F.2d 754 (3d Cir. 1985)); 

cf. Traders & Gen. Ins. Co. v. Rudco Oil & Gas Co., 129 F.2d 621, 

626 (10th Cir. 1942) (when insurer denies coverage and refuses to 

defend insured and insured thereafter settles claims, insurec may 

then seek recovery against insurer and such recovery "is generally 

measured by the coverage under the policy and the reasonableness 

of the settlement" ) . 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 8 
International argues that if its policy did provide coverage 

for the NCAA's liability resulting from the estate's negligence 

claims, International's exposure is limited to excess coverage. 

Policy No. 2760, however, specifically provided that " [t]he insurance afforded by this policy is primary insurance, except when 

stated to apply in excess of or contingent upon the absence of 

other insurance." Appellant's App . , doc. 4, ex. A at 3 . There is 

nothing in the language of policy No. 2760 that would indicate 

that coverage of these claims was excess. 

III 

Finally, International, relying on the "other insurance" 

clause in policy No. 2760, challenges the district court's decision requiring International to contribute one-half of the settlement amount. The "other insurance" clause provides for two situations: 

When both this insurance and other insurance apply 

to the loss on the same basis, [International] 

shall not be liable under this policy for a greater proportion of the loss than that stated in the applicable 

contribution provision below: 

(a) Contribution by Equal Shares. If all of 

such other valid and collectible insurance 

provides for contribution by equal shares, the 

company shall not be liable for a greater proportion of such loss than would be payable if 

each insurer contributes an equal share until 

the share of each insurer equals the lowest 

applicable limit of liability under any one 

policy or the full amount of the loss is paid 

(b) Contribution by Limits. If any of such 

other insurance does not provide for contribution by equal shares, [International] shall 

not be liable for a greater proportion of such 

loss than the applicable limit of liability 

under this policy for such loss bears to the 

total applicable limit of liabil ity of all 

9 

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Appellate Case: 92-6186 Document: 010110200846 Date Filed: 04/06/1993 Page: 9 
valid and collectible insurance against such 

loss. 

Appellant's App., doc. 4, ex. A at 3. 

The parties do not dispute that the "other insurance," MIC's 

policy, did not contain an "other insurance" clause. Therefore, 

because the "other insurance does not provide for contribution by 

equal shares," International must contribute toward the settlement 

according to the proportion of its policy limits with the total 

insurance coverage available. The parties agree that International's policy limit is $250,000, while MIC's coverage limit is 

$500,000, for a total available coverage of $750,000. To determine the proper contribution of each party, we must also recognize 

that International insured only the NCAA, whereas MIC insured both 

the NCAA and OSU . Because the settlement agreement did not apportion the liability between the parties, we must assume that each 

alleged joint tortfeasor is equally responsible for the settlement 

amount. Thus, both International and MIC are responsible for the 

NCAA's portion, which is $200,000, but only MIC must pay the 

$200,000 owed by OSU . Applying the contribution by limits formula, International must contribute one-third of the NCAA's share, 

$66,667, and MIC must pay two-thirds of the NCAA's share and the 

entire share of OSU, a total of $333,333. 

The judgment of the district court, to the extent it requires 

International to contribute one-half of the settlement amount, is 

REVERSED, and the cause is REMANDED to the district court for proceedings consistent with this opinion. In all other respects, the 

d i stric t court ' s decision is AFFIRMED . 

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