UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

________________ _________________ VICKIE BROOKS, Plaintiff - Appellant,

v. PHILADELPHIA INDEMNITY INSURANCE COMPANY, Defendant - Appellee. No. 21-6052 (D.C. No. 5:18- CV-00603-G) (W.D. Okla.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before TYMKOVICH , Chief Judge, MATHESON and PHILLIPS , Circuit Judges.

________________ _________________ This appeal arises from the denial of a Rule 59 motion for reconsideration arising from the district court’s entr y of summary judgment on Philadelphia Indemnity’s defense of non-coverage against an uninsured motorist claim. Vickie Brooks contends the court er red in applying Oklahoma and Tenth Circuit case law. We conclude that the distri ct court correctly applied Oklahoma law. Ms. Brooks breached the Philadelphia policy by settling an automobile accident claim with two other insurance companies before notifyi ng Philadelphia of personal injuries she suffered from the accident.

* This order and judgment is not bi nding precedent, except under the doctrines of law of the case, res judica ta, and collateral estoppel. It may be cited, however, for its persuasive value consiste nt with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### February 10, 2022 Christopher M. Wolpert Clerk of Court Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 12 BACKGROUND Ms. Brooks was driving a company vehicl e when an underins ured motorist hit her. 1 The accident allegedly caused both damage to the vehicle and personal injury to Ms. Brooks. At the scene of the accident , police created an acci dent collision report, which included the name of the insurer, Philadelphia, and Philadelphia’s insurance policy number. There is no indication that anyone but Ms. Brooks could have provided this information to the police, a nd the collision report was accessi ble to her at any time after the accident. She did not report a ny personal injuries to police. Ms. Brooks’s employer then reported th e accident to Philadelphia but did not claim any damages, either to the car or arising from Ms. Brooks ’s injuries. Thus, Philadelphia had no way of knowing that any i nvestigation was needed. Ms. Brooks also reported the accident to the underinsured moto rist’s insurer, State Farm, and her personal insurer, AAA. Ms. Brooks apparently then made a clai m to AAA and State Farm for personal injuries. She subsequently se ttled with AAA for $25,000 and St ate Farm for $50,000. In doing so, she released all interested parties from liability. This included anyone that Ms. Brooks knew had an interest in the claim, not just the parties to the contract. 2

1 The district court found that Ms. Brooks worked for Avalon Correctional Services, while Ms. Brooks st ates on appeal that her em ployer was First Enterprise Equipment. Because the partie s agree on the relevant insura nce contract, this is not a material fact.
2 Because we affirm for the same reasons as the district court, it is not necessary to consider whether Ms. Brooks ’s settlements separately destroyed Philadelphia’s obligation to pay her claim. Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 23 Months later, Ms. Brooks’s counsel sent a letter to Philadelphia asking for the policy, which included coverage for uninsure d or underinsured mo torists. When Ms. Brooks learned of the unde rinsured motorist coverage, she submitted a claim. Philadelphia did not respond to the claim. Ms. Brooks then sued Philadelphia in the district court. Philadelphia moved for summary judgment on the basis that, under Oklahoma law, Ms. Brooks’s settlements with AAA and State Farm obviated Philadel phia’s duty to pay her claims, arguing the settlements destroyed its ability to seek contri bution from the other insurance companies. The district court granted summary judg ment for Philadelphia, relying on an Oklahoma case holding that if an insured se ttles a claim without notice to his or her insurer, coverage is forfeited un der the insurance contract. See Porter v. MFA Mut. Ins.
Co. , 643 P.2d 302, 305 (Okla. 1982). Because Ms. Brooks entered into two settlements without notice to Philadelphia, the district court found that she ha d forfeited any claims under the policy. Thus, Philadelphia was not liable for any of Ms. Brooks’s damages. Ms. Brooks filed a motion for reconsidera tion in light of a Tenth Circuit case interpreting Porter : Phillips v. New Hampshire Ins. Co. , 263 F.3d 1215, 1222 (10th Cir. 2001). In Phillips , we held that “even if the UM ca rrier is legally barred from exercising its subrogation rights against the tort -feasor, it must still pay its insured unless it would be unfair in light of the insured’s knowing, affirmative, and prejudicial conduct.” Id. If an insured’s settlement is made without knowledge of a potential conflic t with the insured’s policy, the insured does not forfeit cove rage under the insurance contract. Id. Ms. Brooks argued that she was not specifically aware that the Philadelphia policy included Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 34 potentially applicable underinsured motorist coverage since she had never seen the policy. The district court found that this was not sufficient to make her settlements unknowing or involuntary unde r Phillips, and it denied her mo tion for reconsideration.
ANALYSIS Ms. Brooks argues that the distri ct court erred by misinterpreting Phillips

. 3 We agree with the district court in finding that Phillips does not apply to Ms. Brooks’s case. Under Oklahoma law, if an insured settles with and releas es a wrongdoer from liability for a loss before payment of the loss has been ma de by the insurer, the insurer’s right of subrogation against the wrongdoer is thereby destroyed. Also as a general rule an insured who deprives insurer, by se ttlement and release, of its right of subrogation against the wr ongdoer thereby provides insurer with a complete defense to an action on the policy. Porter v. MFA Mut. Ins. Co. , 643 P.2d 302, 305 (Okla. 1982) (footnotes omitted); see also Okla. Stat. tit. 36, § 3636(F)(1)-(2); Brambl v. GEICO General Ins. Co. , No. 10-CV-474-TCK-PJC, 2011 WL 5326076, at *2-3 (N.D. Okla. No v. 4, 2011) (“[T]he insured’s voluntary settlement with the tortf easor destroys the UM carrier’s subrogation rights and operates as a forfeiture of any UM Case coverage.”). Thus, an insured who enters into a settlemen t with a tortfeasor, without notic e to his own insurance company, forfeits any underinsured moto rist coverage. By settling, the insured destroys the

3 Ms. Brooks also argued that the distri ct court improperly found that she had knowledge of the policy when she did not know the relevant policy provision. This argument simply reframes Ms. Brooks’s argument under Phillips . Both turn on whether specific and actual notice is requi red. Because Ms. Brooks’s Phillips argument fails, her argument that the district court improper ly found an essential fact also fails. Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 45 insurer’s right of subrogation, or ability to sue in the shoes of the insured. 4 Under Porter , because Ms. Brooks entered into two settlement s with the tortfeasor’s insurers and did not give notice to Philadelphia, she forfeite d her claims under the Philadelphia policy. But in Phillips v. New Hampshire Insurance Co. , 263 F.3d 1215, 1222 (10th Cir. 2001), we identified an exception to the Porter rule that settlement without notice voids an insurer’s duty to pay. Th ere, the insured did not know whether her employer had an insurance policy on the vehicle. Noneth eless, she requested production of any automobile insurance po licies that the employer had. The employer did not respond to her interrogatories, and it failed to produce the insurance agreem ent until seven months after the insured had already entere d into a settlement agreement.
In Phillips , we held that an insured who was not able to obta in information, despite her best efforts, about whether th e vehicle was insured or which insurance company covered the ve hicle was not bound by Porter

. Id. (defining a “knowing” insured as one who “knew at the time the rele ase was signed that he/she was impairing any prospective subrogation ri ghts of his/her insurer”). On ly after Phillips had already

4 Ms. Brooks also contends there wa s no prejudice to Philadelphia due to the destruction of its subrog ation rights. She cites Phillips for this argument. In Phillips , the tortfeasor was judgment-proo f, so the court noted that ev en if the insured had given notice, there was no indication that the insu rance company could have collected. But Oklahoma courts have presumed that a tortfeasor has some assets, unless that presumption is contested or rebutted. See, e.g. , Porter v. MFA Mut. Ins. Co. , 643 P.2d 302, 305 (Okla. 1982) (finding that barring th e insurer “from exercising its lawful right of recourse” against the tortfeasor prejudices th e insurer, without discussion of whether the tortfeasor had any assets). Here, there is no argument that the tortfeasor is judgmentproof. Thus, it was not error to find that Ph iladelphia was prejudice d by its inability to sue. Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 56 settled did her employer finally respo nd that the vehicle was insured. Id. (“Ms. Phillips executed the release before even obtaining NHIC’s id entity or a copy of the policy.”). Because Phillips had no way of finding out whether the vehi cle had insurance coverage, the Phillips court found that her settlement could not have been a kn owing and voluntary breach of her notice obligation. Further, she had no way of prov iding the insurance company with notice of the settlement, as requi red by Oklahoma law. Thus, she did not forfeit her insurance coverage wh en she settled with the tortfeasor before she could have possibly known about the existe nce of the insurance policy. Ms. Brooks entered into two settlement agre ements without notice to Philadelphia. Under Porter , this negates Philadelphia’s duty to pa y her claim. 643 P.2d at 305. Ms. Brooks argues her settlements fall under the Phillips exception, since she did not have actual notice of the underinsured motorist cove rage. The district court found that Ms. Brooks was aware of the policy’s existence: The Collision Report was generated from an investigation made at the scene and identified Philadelphia as the insurer of Ms. Brooks’s work vehicle. She thus had actual notice of a potentially applicable insurance policy. Ms. Brooks, moreover, does not deny that she had actual knowledge of the identity of the insurer, Philadelphia, and the policy number. She argues in stead that she was not aware of the “details.” App. Br. at 9. Ms. Brooks could have obtained the policy provisions by contacting Philadelphia—which her counsel eventually did. She claims her initial failure to obtain this information makes her settlem ents unknowing under the logic of Phillips . We disagree. In Phillips , the insured used her best effort s but was not able to obtain her Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 67 policy in the face of recalcitrance by her em ployer. We emphasized that the insured “requested information about, and production of, any autom obile insurance policies her employer had in force, but her employer di d not respond [until after the settlement].” Phillips , 263 F.3d at 1218. Here, Ms. Brooks knew of th e policy but did not procur e and read its provisions until after the settlements. Ms. Brooks could have obtained the specific information by reaching out to Philadelphia, as her counsel eventually did. Ms. Brooks, unlike Phillips, could have obtaine d all the necessary information wi th a modicum of due diligence. Thus, her settlement was knowing and voluntary as explained in Phillips . Ms. Brooks does not fall under an excep tion to the general rule that her settlement voids Philadelphia’s duty to pay. For the reasons stated above, the distri ct court correctly denied Ms. Brooks’s motion to reconsider. Thus, we AFFIRM the decision of the district court.

Entered for the Court
Timothy M. Tymkovich Chief Judge Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 721-6052, Brooks v. Philadelphia Indemnity Insurance Company PHILLIPS , J. dissenting. Philadelphia had tw o required showings to meet its summary-j udgment burden: (1) that Ms. Brooks “knowingly and volu ntarily” destroyed Philadelphia’s subrogation rights with a settlement and release, and (2 ) that the release “actually prejudiced” Philadelphia. On the first point, I note that Philadelphia hasn’t maintained that Ms. Brooks knew that her employer’s automobile policy contained underinsured-motorist (“UM”) coverage for her. As the majority notes, “[w]hen Ms. Brooks learned of the underinsured motorist coverage, she submitted a claim.” Maj. Op. at 3. By then, she had settled and issued general releases. On the se cond point, Phila delphia hasn’t argued that it would have pursued the negligent driver or her insurer for subrogation—a minimum requirement to show actual (as opposed to th eoretical) prejudice. For these reasons, as elaborated on below, I respectfully dissent.
I. “Knowing and Voluntary”
In Porter v. MFA Mutual Insurance Co. , 643 P.2d 302, 305 (Okla. 1982), the Oklahoma Supreme Court stated the “general rule” that “an insured who deprives [an] insurer, by settlement and release, of its ri ght of subrogation against the wrongdoer thereby provides [the] insure r with a complete defense to an action on the policy.” Because Mr. Porter settled and released “the responsible party” (the negligent driver who injured him) from further lia bility before notifying his insurer (which covered UM benefits), he prevented his insurer “from exerci sing its lawful right of recourse against the responsible party[.]” Id. So the court held that Mr. Port er “was thereby precluded from Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 82 bringing action on the unins ured motorist policies.” Id. Importantly, Mr. Porter’s knowledge of the UM coverage as containe d in his policy was undisputed—he had earlier notified his insurer that he might make an UM claim on his policy. Id. at 303.
In Phillips v. New Hampshire Insurance Co. , 263 F.3d 1215 (10th Cir. 2001), we applied Porter ’s general rule to the facts of Phillips —we didn’t create an “exception” to
Porter ’s general rule as the majority says. See Maj. Op. at 5. Unlike in Porter , the claimant in Phillips didn’t know whether her employer had an insurance policy that covered her for UM benefits. Phillips , 263 F.3d at 1218. Trying to find out, she filed suit and served interrogatories asking about any such insurance. Id. In response, her employer stalled for eighteen months before answer ing the interrogatory and providing the insurance policy. See id. By then, the claimant had se ttled with the tortfeasor and provided a release. Id. In this circumstance, we held that she had not “knowingly and voluntarily” destroyed the insurer’s subrogation rights. Id. at 1223. The majority relies on these two cases to support its holding that Ms. Brooks “knowingly and voluntarily” destroyed Philade lphia’s subrogation rights despite her not knowing that the policy contained UM covera ge. It does so by pointing to information that was available to her in the police re port from the traffic accident. The report identified Philadelphia as the insurer of her employer’s automobile and listed the insurance-policy number. But neither Porter nor Phillips treats constructive knowledge of an insurance policy as the equivalent of actual knowledge. How can a claimant who doesn’t know whether a policy provides her UM coverage knowingly and voluntarily Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 93 destroy subrogation for UM-coverage payments? 1 Also noteworthy, to get to constructive knowledge, the majority spec ulates that “a modicum of due diligence” would have revealed to Ms. Brooks the presence of UM coverage. See Maj. Op. at 7. But we should remember that Philadelphia took months to produce the policy after the claimant asserted a claim for UM benefits. See id . And we should remember that on summary judgment, the non-movant gets the benefit of the doubt on disputed facts. Further, the majority fails to acknowledge Phillips ’s language saying that “in commercial/business policies that cover employe es, the UM/UIM insure r may also have a concomitant duty to inform an injured em ployee-insured who may be ignorant of potential coverage and contract terms of its ri ght to contractual or statutory subrogation if the insurer wishes to later elect to exercise that right .” 263 F.3d at 1224 (citing Sexton v. Cont’l Cas. Ins. , 816 P.2d 1135, 1138 (Okla. 1991), which notes that an insurer has a

1 I also disagree with the district c ourt’s handling of Philadelphia’s summaryjudgment burden. The district court stated that “while Plaintiff’s brief argues that Defendant’s status as a UM carrier was not kno wn to Plaintiff at the time she signed her release, this argument is not supported by a ffidavit or deposition te stimony or any other evidentiary material permitted under Rule 56 .” But Rule 56 doesn’t require Ms. Brooks to file such materials until Philadelphia had introduced admissible evidence that she knew about the UM coverage. It didn’t do so. Under our precedent, the summary-judgment burden shifts to the non-movant only onc e the movant meets its initial burden of establishing no material disputes of fact. See Reed v. Bennett , 312 F.3d 1190, 1195 (10th Cir. 2002); see also Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir. 1984) (“Where the moving party fails to meet its strict burden of proof, summary judgment cannot be entered even if the opposing party fails to respond to the motion.”). But here, Philadelphia failed to meet its burden of showing that Ms. Brooks had actual knowledge, so no affidavit fro m Ms. Brooks was needed. Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 104 duty to “aid its insured in the pres ervation of its subrogation rights”). 2 Here, Philadelphia knew that Ms. Brooks had been involved in an accident on an interstate highway in which another car had spun into the driver’s side of her car and spun it too. The accident was serious, and clearly more than a parallel-park ing mishap or some such. Yet Philadelphia made no attempt to inform Ms. Brooks of Ph iladelphia’s UM coverage or any interest it might have in pursuing subrogatio n against the negligent driver. Additionally, the majority fails to cr edit Oklahoma’s stated public policy underlying its UM laws . As we noted in Phillips , “[b]ecause [the Oklahoma] UM statute is remedial and mandates th e inclusion of UM coverage in motor vehicle insurance policies, it is to be liberally construed to accomplish the legislative purpose, that of providing coverage for injuries which woul d otherwise go uncompensated.” 263 F.3d at 1224 (quoting Forbes v. Shelter Mut. Ins. Co. , 904 P.2d 159, 162 (O kla. Civ. App. 1995)). And as further stated in Phillips , “[t]he central goal of [Okla. Stat. Ann. tit. 36 § 3636, Uninsured Motorist Coverage] is to protect victims injured by uninsured or underinsured motorists (or by insured motorists whose ca rriers become insolvent) by ensuring payment of damages.” Id. (citing Barnes v. Okla. Farm Bur. Mut. Ins. Co. , 11 P.3d 162, 173 (Okla. 2000)). Those policie s don’t square with the majority’s new constructive-knowledge rule.

2 The court next notes that “ [a]t the very least , the insurer has a duty to promptly produce a policy on request to an injured employee with a colorable claim under the policy so that the employee may ascertain wh ether he is covered and what responsibilities he has under the contract.” Phillips , 263 F.3d at 1224 (e mphasis added). Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 115 II. “Actual Prejudice” The district court committed another e rror requiring reversal of its summaryjudgment order. Philadelphia didn’t offer ev idence that it was “actually prejudiced” by Ms. Brooks’s releases. In Phillips , we predicted that “the Oklahoma Supreme Court would hold that [the UM in surer] may not rely on the Porter defense if it was not actually prejudiced by the signing of the release.” 263 F. 3d at 1222. We concluded that “[a]ctual, not just theoretical, prejudice is a necessary element of a Porter defense because only the insured’s conduct that causes injury to the insurer can be unfair.” Id. at 1223. And that “because [the UM insurer] did not allege any undisputed facts to establish that it was actually injured by Ms. Phillips’ conduct, it failed to satisfy its summary judgment burden.” Id. At the least, to meet its summary -judgment burden on actual prejudice, Philadelphia needed to show that it would ha ve pursued the tortfeasor (the negligent driver) for whatever UM benefits it ev entually decided to pay Ms. Brooks. 3 See Porter ,

3 See also State Farm Mut. Auto . Ins. Co. v. Green , 89 P.3d 97, 104 (Utah 2003) (“In order to show actual prejudice, it is not su fficient for an insurer to show that its right of subrogation has been extinguished. Rathe r, the insurer may deny coverage only if it would have had a realistic possibility of recovering from the tortfeasor had its subrogation right not been foreclosed by the in sured’s settlement with the tortfeasor. This requires an assessment of factors such as the assets held by the tortfeasor, the strength of the insurer’s subrogation claim (i.e., the stre ngth of the underlying tort claim), the expenses and risks of litigati ng the insured’s cause of action, and the extent of the victim’s damage.”); Hasper v. Center Mut. Ins. Co ., 723 N.W.2d 409, 416 (N.D. 2006) (same); Gibson v. State Farm Mut. Auto. Ins. Co ., 704 N.E.2d 1, 6 (Ohio Ct. App. 1997) (relevant factors include “the amount of asse ts held by the tortfeasor, the likelihood of recovery via subrogati on, and the expenses a nd risks of litigating the insured’s cause of action”); Kapadia v. Preferred Risk Mut. Ins. Co ., 418 N.W.2d 848, 852 (Iowa 1988) Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 126 643 P.2d at 305 (tying loss of subrogation rights to the claimant’s release of “a wrongdoer,” “the responsible party,” “the tortfeasor,” and “Sheltman”—the named negligent driver in that case). As Phillips notes, “the only time taking such action [seeking subrogation from a tortfeasor] would be profitable to the UM/UIM carrier is when the tort-feasor has assets beyond the liability limits (or settlement offer) of his insurance policy that may be collected after judgment.” Id. at 1225. Philadelphia made no showing on summary judgment that the neg ligent driver who injured Ms. Brooks had collectable assets worth its time and money to pursue. Addressing the collectability piece of “ac tual prejudice,” the majority recognizes that Phillips found a lack of actual prejudice to the insurer because the “tortfeasor was judgment-proof, so . . . even if the insured had given notice, there was no indication that the insurance company would have collected.” Maj. Op. at 5 n.4. But then, in my view, the majority takes a wrong turn—it contends th at “Oklahoma courts have presumed that a tortfeasor has some assets, unless that pr esumption is contested or rebutted,” and concludes that Brooks failed to rebut this presumption. Id. But neither Philadelphia nor the majority offers support for this “presumption,” and Phillips says otherwise. See 263 F.3d at 1223 (in discussing actual prejudice, the court stated that “because [the insurer] did not allege any undisputed facts to establish that it was actua lly injured by Ms. Phillips’ conduct, it failed to satisfy its summary judgment burden .” (emphases added)).

(insurer must demonstrate actual prejudice by showing it could have collected from tortfeasor under subrogation clause). Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 137 Moreover, Philadelphia didn’t avail itself of any such “presumpti on” in its summaryjudgment motion or a ppellate briefing. As mentioned, the “actual prejudice”- collectability question pertains to the tortfeasor, not the tortfeaso r’s insurance company that ha s already paid policy limits on the claim. See Op. Br. at 3 (“Ms. Brooks settled with the adverse driver’s carrier, State Farm, for his $50,000 liability limits[.]”); see also Chandler v. St ate Farm Auto. Ins. Co ., 598 F.3d 1115, 1119 (9th Cir. 2010) (“The c ourt then acknowledged that an insurer’s obligation runs . . . only to the extent of the policy limits.” (cleaned up)). Nor is the majority correct to point to the collectability of any payments made to Ms. Brooks by her own insurer, AAA. Once more, the UM insurer’s subrogation right applies only against the tortfeasor. See Porter , 643 P.2d at 305 (sub rogation rights only apply to the tortfeasor); see also Chandler , 598 F.3d at 1117 (“Subrogation is an equitable doctrine that permits an insurance compan y to assert the rights and remedies of an insured against a third party tortfeasor.”); Aviation & Gen. Ins. Co., Ltd. v. United
States , 882 F.3d 1088, 1102 (Fed . Cir. 2018) (Reyna, J., c oncurring) (“It is well established that subrogation is a common law doctrine based in equity that permits an insurer to take the place of the insured to pursue recovery from third-party tortfeasors responsible for the insured’s loss.”). And to show actual prejudice, Philadelphia must have shown that it would have pursued the tortfeasor had its subrogation rights not been compromised, which it simply didn’t do here. See State Farm , 89 P.3d at 104 (actual prejudice requires more than subrogation being extinguished—“the insurer may deny coverage only if it would have had a realistic possibility of recovering from the tortfeasor Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 148 had its subrogation right not been foreclosed by the insu red’s settlement with the tortfeasor.”). So as a second ground on wh ich the district court should have denied summary judgment, I rely on Philadelphi a’s failure to meet its burde n to show actual prejudice. Appellate Case: 21-6052 Document: 010110643610 Date Filed: 02/10/2022 Page: 15