Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-06072/USCOURTS-ca10-92-06072-0/pdf.json

Parties Involved:
Kim Payne
Appellant
Mark Payne
Appellant
State Farm Fire and Casualty Company
Appellee

Document Text:

F IL L D 

Unit:A?<i States Co~rt qf Appeals 

Tenth C1rcu1t 

UNITED STATES COURT OF APPEALS DEC 11 1992 

FOR THE TENTH CIRCUIT ROBERT L. HOECKER 

Clerk 

STATE FARM FIRE AND CASUALTY COMPANY, 

Plaintiff-Appellee, 

v . 

MARK PAYNE and KIM PAYNE, husband 

and wife, 

Defendants-Appellants. 

ORDER AND JUDGMENT* 

Nos. 91-6306 

& 

92-6072 

(D.C. No. CIV-90-1786-R) 

(W.D . Okla.) 

Before SEYMOUR, ANDERSON, and BALDOCK, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of these appeals. See Fed. R. App . P . 

34 (a); 10th Cir. R. 34. 1. 9. The cases are therefore ordered 

submitted without oral argument. 

Defendants Mark and Kim Payne appeal from an order of the 

district court granting plaintiff State Farm Fire & Casualty Co.'s 

motion for summary judgment (No. 91-6306), and from an order 

* 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: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 1 
denying their motion for relief from judgment (No. 92-6072 ) . 

Because we conclude there is a genuine issue of material fact, we 

vacate the district court's grant of summary judgment and remand 

for further proceedings. 

State Farm brought a declaratory judgment action against the 

Paynes seeking a determination that it was not liable for fire 

loss under a homeowner's policy it had issued to the Paynes. 

State Farm alleged that the Paynes breached the insurance contract 

by failing to cooperate in the investigation of the fire because 

they did not produce their public adjuster, Bill Gibson, for an 

examination under oath. The Paynes denied that they had the power 

to produce Gibson for an examination. State Farm filed a motion 

for summary judgment asserting the Paynes had a duty to produce 

Gibson and their failure to do so resulted in forfeiture of the 

right to any payment unde r t he policy. 

The district court granted summary judgment. Because the 

Paynes did not request that Gibson submit to an examination, the 

court found that the Paynes breached the insurance contract, 

forfeiting any right to payment under the policy . The Payne s 

appealed (No. 91 - 6306 ) .

1 

We review the grant of summary judgment de novo, applying the 

same legal standard used by the district court pursuant to 

Fed. R. Civ. P. 56(c) . Applied Genetics Int'l. Inc. v. First 

Affiliated Sec .• Inc., 912 F.2d 1238, 1241 (10th Cir. 1990 ) . 

1 Subseque ntly, the Paynes file d a motion for relief from 

judgment. The district court denied the motion, and the Payne s 

f iled a seco nd n o tic e o f appeal (No . 92 -6072 ) . This c ourt 

consolidated the appeals. 

2 

Appellate Case: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 2 
After reviewing the record in the light most favorable to the 

party opposing summary judgment, Deepwater Invs., Ltd. v. Jackson 

Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir. 1991), we will 

uphold a grant of summary judgment when there is no genuine issue 

of material fact and the moving party is entitled to judgment as a 

matter of law . Russillo v. Scarborough, 935 F . 2d 1167, 1170 (10th 

Cir. 1991) . 

The movant has the burden of showing beyond a reasonable 

doubt that it is entitled to summary judgment. Hicks v. City of 

Watonga, 942 F.2d 737, 743 (10th Cir. 1991). If this burden is 

met, the burden shifts to the opposing party to show a genuine, 

material issue for trial. Bacchus Indus .• Inc. v. Arvin Indus., 

Inc., 939 F.2d 887, 891 (10th Cir. 1991). 11 [S]ummary judgment 

will not lie if the dispute about a material fact is 'genuine,' 

that is, if the evidence is such that a reasonable jury could 

return a verdict for the nonmoving party." Anderson v. Liberty 

Lobby, Inc . , 477 U.S. 242, 248 (1986). 

The Paynes argue the district court erred in ordering summary 

judgment against them because there is a genuine issue of fact 

whether they had the power to produce Gibson for an examination 

within the meaning of the insurance policy. The insurance policy 

required the Paynes to produce for examination, upon State Farm's 

request, those they had the power to produce . The relevant 

portion of the policy provides : 

2 . Your Duties After Loss. After a loss to which this 

insurance may apply, you shall see that the following 

duties are performed: 

3 

Appellate Case: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 3 
d. as often as we reasonably require: 

4. produce employees, members of the 

insured's household or others for examination under oath 

to the extent it is within the insured's power to do so 

Appellant's App. doc. 1 at 11. Based on this policy language, the 

district court held the Paynes had a duty to request that Gibson 

appear for an examination under oath. Nothing in the policy, 

however, requires that the Paynes request Gibson to appear if they 

have no power over him. At best, it can be argued that the policy 

language ambiguously requires such a request. 

When policy language is ambiguous, it should be interpreted 

against the party causing the uncertainty. Premier Resources. 

Ltd. v. Northern Natural Gas Co., 616 F.2d 1171, 1178 (10th Cir. ) , 

cert. denied, 449 U.S . 827 (1980). In this case, State Farm 

drafted the policy language . It did not draft the policy to 

require insureds to "request" others to appear for examinations. 

Any ambiguity must be interpreted against State Farm. We 

therefore hold that the policy does not include a requirement that 

the Paynes request Gibson to appear for an examination. 

Under the policy language, the only relevant question is 

whether the Paynes had the actual power to produce Gibson for an 

oral examination. State Farm argued in its motion for summary 

judgment that the Paynes did in fact have the power to produce 

Gibson for an oral examination. The Paynes countered that they 

did not have the power to produce Gibson and, at the least, that 

they presented a genuine issue of material fact concerning their 

power to produce Gibson for an examination. We agree. 

4 

Appellate Case: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 4 
In his affidavit, Gibson stated that he was not an employee 

of the Paynes, but was instead employed by Gibson Public 

Adjusting, Inc. Appellants' App. doc. 7, ex. B. He also stated 

that the Paynes had no control over the details and ultimate 

result of his work. Moreover, the Paynes stated in their 

interrogatories that they "requested [Gibson] to do what was 

normal and usual under the circumstances." Appellee's Supp. App . 

doc . BB at 5. In a letter from the Paynes' counsel to State 

Farm's counsel, the Paynes asserted that Gibson was not an 

employee of the Paynes and they did not have the power to produce 

him. Appellant's App. doc. 8, ex. A. The policy does not 

specifically define power, and we conclude the Paynes set forth 

specific facts showing a genuine issue of fact on this issue. See 

Shebester v. Triple Crown Insurers, 974 F.2d 135, 139 (10th Cir. 

1992) . 

Irrespective of the Paynes' power to produce Gibson, Oklahoma 

courts do not look favorably on forfeitures under insurance 

policies. George v. Connecticut Fire Ins. Co., 201 P. 510, 512 

(Okla. 1921); see also Agricultural Ins. Co. v. Iglehart, 386 P.2d 

145, 147-48 (Okla. 1963) (insured given reasonable amount of time 

to sign transcript of examination under oath after failure to sign 

despite repeated demands by insurer; failure to sign did not 

amount to forfeiture because signing was not condition precedent 

to insured's bringing action under policy). If the Paynes have 

the power to produce Gibson, their failure to do so would not 

result in a forfeiture under Oklahoma law. Rather, they must be 

given an opportunity to cure by producing Gibson. 

5 

Appellate Case: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 5 
The Paynes have raised several other issues on appeal. In 

light of our determination that they have raised a genuine issue 

of material fact concerning their power to produce Gibson, we need 

not address these issues. The judgment of the United States 

District Court for the Western District of Oklahoma is VACATED, 

and the action is REMANDED for further proceedings. 

Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

6 

Appellate Case: 92-6072 Document: 010110152127 Date Filed: 12/11/1992 Page: 6