UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

NATIONWIDE MUTUAL INSURANCE 

COMPANY, 

 Plaintiff - Appellee, 

v. 

WAYNE A. PRATER; TONYA PRATER, 

 Defendants - Appellants, 

and 

KID’S KINGDOM FITNESS & FUN, 

INC.; LARRY W. ROGERS; LORNA D. 

ROGERS; SERENITY CREEK 

ENTERPRISES, LLC, 

 Defendants. 

No. 14-6110 

(D.C. No. 5:13-CV-00391-R) 

(W.D. Okla.) 

_________________________________ 

ORDER AND JUDGMENT*

_________________________________ 

Before BRISCOE, Chief Judge, EBEL and TYMKOVICH, Circuit Judges. 

_________________________________ 

Defendants-Appellants Wayne and Tonya Prater appeal the district court’s 

grant of summary judgment to Plaintiff-Appellee Nationwide Mutual Insurance 

Company [“Nationwide”]. The district court held that Nationwide had no duty to 

defend Defendant Kid’s Kingdom Fitness & Fun, Inc. [“Kingdom”] against the 

 *

 This order and judgment is not binding precedent, except under the doctrines 

of law of the case, res judicata, and collateral estoppel. It may be cited, however, for 

its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals

Tenth Circuit 

August 7, 2015

Elisabeth A. Shumaker 

Clerk of Court

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Praters’ suit for injuries that Wayne Prater suffered at a birthday party at Kingdom. 

We have jurisdiction under 28 U.S.C. § 1291 and AFFIRM. 

I. FACTS 

The Praters accompanied their children to a birthday party at Kingdom, a 

gymnastics facility. After joining the children and other parents in gymnastics 

activities, Wayne Prater jumped from a platform into a foam pit. He broke his back 

and was paralyzed from the waist down. The Praters1

 then filed suit against Kingdom, 

Serenity Creek Enterprises, LLC (which owns the building and property where 

Kingdom operated), and Larry and Lorna Rogers (who co-owned Kingdom), alleging 

negligence. Nationwide agreed to defend the suit, subject to a full reservation of 

rights, but contended that because Prater’s injuries occurred during a birthday party, 

and because the policy it issued Kingdom did not cover birthday parties, the injury 

and ensuing litigation were not covered by the policy. 

Nationwide sought a declaratory judgment stating that Kingdom’s insurance 

policy does not cover Prater’s claim, and therefore that Nationwide has no duty to 

defend against Prater’s lawsuit or to indemnify its insured against damages resulting 

from that suit. After the accident, Nationwide sent a letter to Kingdom stating that 

Kingdom’s insurance policy did not cover the claim for Prater’s injuries. The policy 

Kingdom purchased was sold as “gymnastics and cheerleading insurance,” and the 

application form required Kingdom to answer questions about which specific 

 1

 For simplicity, we sometimes use “Prater” or “the Praters” to refer to Wayne 

and Tonya Prater collectively. 

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gymnastics-related activities it engages in. The four-page form included a half-page 

section for “Ancillary Activities and Birthday or Social Party Coverage” that stated: 

Please select all of the activities you may have and report the total 

number of registered members and/or the number of separately enrolled 

participants in each of the activities listed below. The total number of 

birthday or social parties you may have at your facility on an annual 

basis should be reported. 

Aplt. App. 648. This form had a box labeled “Birthday or Social Parties (Report # of 

parties annually).” Kingdom neither selected that box nor listed the annual number of 

parties it hosted. 

The district court, on cross-motions for summary judgment, granted 

Nationwide’s motion for summary judgment and denied the Praters’ motions for 

summary judgment because 

the insurance policy in question provides that there is no coverage for 

birthday parties unless the insured has reported birthday parties as part 

of its operations, the insurer has approved coverage for birthday parties, 

and the applicable premium for birthday party coverage has been paid 

by the insured. Because the evidence in this case establishes that none 

of these things happened prior to Defendant Wayne Prater’s injuries, 

which occurred during a birthday party held at Defendant Kid’s 

Kingdom, the insurance policy in question does not cover the claim for 

Defendant Wayne Prater’s injuries. 

Aplt. App. 1096–97. 

II. POLICY EXCERPTS 

The relevant provisions of Kingdom’s insurance policy are excerpted below 

and categorized according to whether they are definitions, coverage provisions, 

limitations, or exclusions. 

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A. Definitions 

“Bodily injury” means “bodily injury . . . sustained by a person . . . .” Aplt. 

App. 48. 

“Occurrence” means “an accident . . . .” Aplt. App. 50. 

“Participant” means “a person practicing, instructing or participating in any 

physical exercises or games, sports, or athletic contests . . . .” Aplt. App. 64. 

“Suit” means “a civil proceeding in which damages because of ‘bodily 

injury’ . . . to which this insurance applies are alleged.” Aplt. App. 51. 

“Wrongful act” means “any negligent act, negligent error, negligent omission, 

or negligent breach of duty in the discharge of covered activities or operations of the 

named insured. Any negligent act, negligent error, negligent omission, or negligent 

breach of duty arising out the same or related facts, circumstances, situations, 

transactions or events shall be deemed as arising out of the same ‘wrongful act.’” 

Aplt. App. 73. 

B. Coverage Provisions 

Commercial General Liability Coverage Form2

 SECTION I – COVERAGES 

 COVERAGE A BODILY INJURY . . . LIABILITY 

1. Insuring Agreement 

 2

 Aplt. App. 37. 

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a. We will pay those sums that the insured becomes legally obligated to 

pay as damages because of “bodily injury” . . . to which this insurance 

applies. We will have the right and duty to defend the insured against 

any “suit” seeking those damages. However, we will have no duty to 

defend the insured against any “suit” seeking damages for “bodily 

injury” . . . to which this insurance does not apply. We may, at our 

discretion, investigate any “occurrence” and settle any claim or “suit” 

that may result. . . . 

b. This insurance applies to “bodily injury” . . . only if: 

(1) The “bodily injury” . . . is caused by an “occurrence” . . . ; 

(2) The “bodily injury” . . . occurs during the policy period . . . . 

 

Professional Liability Coverage3

This endorsement modifies insurance provided under the following: 

 COMMERCIAL GENERAL LIABILITY COVERAGE FORM 

A. Insurance does not apply to Professional Liability under the 

COMMERCIAL GENERAL LIABILITY COVERAGE PART except as 

provided in Coverage G. 

 B. The following is added to SECTION I – COVERAGES: 

 COVERAGE G – PROFESSIONAL LIABILITY 

 1. INSURING AGREEMENT 

a. We will pay those sums that the insured becomes legally 

obligated to pay as damages because of a “wrongful act” to 

which this insurance applies. We will have the right and 

duty to defend the insured against any “suit” seeking those 

damages. However, we will have no duty to defend the 

insured against any suit seeking damages for “wrongful 

acts” to which this insurance does not apply. We may, at 

our discretion, investigate any “wrongful act” and settle 

any claim or “suit” that may result. . . . 

 3

 Aplt. App. 72. 

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Legal Liability to Participants4

This endorsement modifies insurance provided under the following: 

 COMMERCIAL GENERAL LIABILITY COVERAGE FORM 

A. Additional Exclusions 

1. SECTION I – COVERAGES, COVERAGE A BODILY 

INJURY . . . LIABILITY, 2. Exclusions, The following is added: 

 q. Participants 

 “Bodily Injury” to a “participant” 

B. SECTION I – COVERAGES, The following is added: 

COVERAGE D – LIABILITY TO “PARTICIPANTS” 

1. Insuring Agreement. 

a. We will pay those sums that the insured becomes legally obligated to pay 

as damages because of “bodily injury” to any “participant”. We will have 

the right and duty to defend the insured against any “suit” seeking those 

damages. However, we will have no duty to defend the insured against any 

“suit” seeking damages for “bodily injury” to which this insurance does not 

apply. We may, at our discretion, investigate any “occurrence” and settle 

any claim or “suit” that may result. . . . 

C. Limitations 

Limitation of Coverage to Designated Premises, Activities or Operations5

This endorsement modifies insurance provided under the following: 

 ALL LIABILITY COVERAGES 

This insurance applies only to: 

1. The ownership, maintenance or use of the premises shown in the 

Schedule and operations necessary or incidental to those premises; or 

2. The activities or operations shown in the Schedule. 

 4

 Aplt. App. 63–64. 

5

 Aplt. App. 66. 

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SCHEDULE 

Premises:[6] 

Activities or Operations: 

 Your covered operations consist of premises, operations and activities 

involving registered participants for those sport(s) and/or activity(s) under 

your direct supervision or organized by you and which you have reported to 

the company along with any ancillary event or activity held directly with that 

sport(s) or activity(s) at your location(s) or at approved off-site locations on 

your behalf. 

 

If reported, approved and the applicable premium has been paid, covered 

operations include birthday/social party(s) supervised by you and related to the 

above described operations and activities. 

If reported, approved and the applicable premium has been paid, covered 

operations also include hosted meets, competitions or events supervised and 

organized by you in which both registered and non-registered participants 

participate. 

D. Exclusions 

Exclusion – Designated Operations7

This endorsement modifies insurance provided under the following: 

 COMMERCIAL GENERAL LIABILITY COVERAGE FORM 

SCHEDULE 

Description of Designated Operation(s): 

. . . 

Your operations as a sports complex or multi-purpose facility, except for those 

sport(s) and/or subsidiary activities you have reported, paid for, and that have 

been approved by the program administrator; 

. . . . 

 6

 The “Premises” section is left blank. A separate “Limitation of Coverage to 

Designated Premises, Activities or Operations” form, Aplt. App. 68, lists 

“Swimming pool premises – As reported and on file with the company” under 

“Premises,” while leaving the “Activities or Operations” section blank. 

7

 Aplt. App. 53. 

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This insurance does not apply to the operations described in the Schedule of 

this endorsement, regardless of whether such operations are conducted by you 

or on your behalf or whether the operations are conducted for yourself or for 

others. . . . 

III. STANDARD OF REVIEW 

We review the district court’s order granting summary judgment de novo. See 

Koch v. City of Del City, 660 F.3d 1228, 1237 (10th Cir. 2011). Summary judgment 

is appropriate only if “the movant shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. 

P. 56(a). In making that determination, a court must view the evidence in the light 

most favorable to the nonmoving party. Koch, 660 F.3d at 1238. 

Because this court is sitting in diversity, we interpret the insurance policy in 

accordance with the law of Oklahoma, the forum state. See Sapone v. Grand Targhee, 

Inc., 308 F.3d 1096, 1100 (10th Cir. 2002). “We must apply the most recent 

statement of state law by the state’s highest court,” and “where no state cases exist on 

a point, we turn to other state court decisions, federal decisions, and the general 

weight and trend of authority.” Id. 

IV. ANALYSIS8

“An insurance policy is a contract, and a contract is to be construed as a 

whole, giving effect to each of its parts.” Haworth v. Jantzen, 172 P.3d 193, 196 

(Okla. 2006) (footnote and citations omitted). “In reviewing a provision of an 

insurance contract, the court should not use a forced or strained construction, take a 

 8

 We address only arguments that were specifically raised before us on appeal. 

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provision out of context, or narrowly focus on a provision so as to import a more 

favorable consideration to either party than that expressed in the contract.” Haberman 

v. Hartford Ins. Grp., 443 F.3d 1257, 1265 (10th Cir. 2006) (citations, alterations, 

and quotation marks omitted) (quoting Oklahoma cases). 

Insurance contracts are contracts of adhesion that are “liberally construed, 

consistent with the object sought to be accomplished, so as to give a reasonable effect 

to all of [their] provisions, if possible.” Dodson v. St. Paul Ins. Co., 812 P.2d 372, 

376 (Okla. 1991). “[A]ny ambiguity in the language of the contract must be strictly 

construed against the insurer.” Haworth, 172 P.3d at 198. However, the application of 

the strict construction rule in favor of the insured must still be “consistent with the 

parties’ intentions.” Dodson, 812 P.2d at 376–77. An insurance policy should be 

“fairly constructed to effectuate its purpose, and viewed in the light of common sense 

so as not to bring about an absurd result.” Id. at 376 (quoting Wiley v. Travelers Ins. 

Co., 534 P.2d 1293, 1295 (Okla. 1974)). 

An insurance contract is ambiguous only if it is susceptible to two 

constructions on its face from the standpoint of a reasonably prudent 

layperson, not from that of a lawyer. However, this Court will not 

indulge in forced or constrained interpretations to create and then 

construe ambiguities in insurance contracts. . . . If it is not ambiguous, 

we accept the contract language in its plain, ordinary, and popular 

sense. 

Haworth, 172 P.3d at 196–97 (footnote and citations omitted). 

The first step in interpreting an insurance contract is to consider whether the 

event at issue is covered by the “general declaration of insurance coverage, as 

established by the insurance policy and limited by its provisions.” Dodson, 812 P.2d 

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at 377. If the event is covered under the general declarations of coverage or an 

endorsement, then the court considers whether it is nevertheless excluded from 

coverage by any policy exclusions. Id. Accordingly, we address each disputed 

provision separately to inquire whether it adds or removes coverage for Prater’s 

injury. 

A. Prater’s injury is not covered by the Commercial General Liability Coverage 

Form [“Coverage Form”]. 

Prater argues that his injuries are covered under the broad terms of the 

Coverage Form. There, the policy states: 

We will pay those sums that the insured becomes legally obligated to 

pay as damages because of “bodily injury” . . . to which this insurance 

applies. We will have the right and duty to defend the insured against 

any “suit” seeking those damages. However, we will have no duty to 

defend the insured against any “suit” seeking damages for “bodily 

injury” . . . to which this insurance does not apply. We may, at our 

discretion, investigate any “occurrence” and settle any claim or “suit” 

that may result. 

Aplt. App. 37 (emphasis added).

Thus, the Coverage Form is limited by its statement that the insurer will pay 

only for bodily injures “to which this insurance applies.” We must look elsewhere to 

determine whether Prater’s injury is one “to which this insurance applies.” 

B. Under the “Limitation of Coverage to Designated Premises, Activities or 

Operations” [“Limitation”] provision, birthday parties are not covered unless 

the insured has reported that it hosts such parties. 

 

The part of the policy most relevant in this case is the Limitation provision. 

The Limitation states, in relevant part, that the insurance applies only to (1) the 

“ownership, maintenance or use of the premises shown in the Schedule and 

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operations necessary or incidental to those premises” and (2) “[t]he activities or 

operations shown in the Schedule.” Aplt. App. 66. The form’s Schedule has a section 

for “Premises” which lists no premises, so part (1) of the Limitation has no effect. 

However, the Schedule does list “Activities or Operations” as follows:

Your covered operations consist of premises, operations and activities 

involving registered participants for those sport(s) and/or activity(s) 

under your direct supervision or organized by you and which you have 

reported to the company along with any ancillary event or activity held 

directly with that sport(s) or activity(s) at your location(s) or at 

approved off-site locations on your behalf. 

If reported, approved and the applicable premium has been paid, 

covered operations include birthday/social party[s] supervised by you 

and related to the above described operations and activities. 

The district court held, and we agree, that under the plain language of Part (2) 

of the Limitation, the policy “only covers birthday parties ‘if reported, approved and 

the applicable premium has been paid.’” Aplt. App. 1090 (alteration omitted).9

Because Kingdom did not report, receive approval for, or pay an additional premium 

for birthday party coverage,10 injuries occurring at such parties are not covered. 

 Prater argues that the term “premises” triggers coverage of Prater’s injuries 

because Prater’s lawsuit is based upon a theory of “premises liability”—that is, Prater 

alleges that Kingdom failed to exercise reasonable care over its premises with respect 

 9

 In Kingdom’s policy, the application form is implicitly incorporated into the 

policy insofar as the scope of coverage depends upon which activities Kingdom 

reported in the application form and for which it obtained approval and paid a 

premium. 

10 The evidence shows that whether the insured hosts birthdays and social 

parties affects the risk exposure of the insurer and is factored into the calculation of 

the premium. See Aff. of Caroline Florez ¶¶ 13–14 (Aplt. App. 634). 

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to Prater, an invitee. The crux of Prater’s argument is that because the policy 

included general premises liability coverage, the fact that Kingdom did not select 

“Birthday or Social Parties” on its application form or pay for coverage of such 

parties is irrelevant.11

We disagree. Although the Schedule covers “premises,” it does so only insofar 

as the premises are used in an activity “involving registered participants for those 

sport(s) and/or activity(s) . . . which you have reported to the company . . . .” Aplt. 

App. 66. Kid’s Kingdom did not report that its activities included hosting birthday 

parties, and the Limitation unambiguously states that unreported activities are not 

covered. The Limitation then goes on to include birthdays and social parties only if 

they have been “reported” and “approved,” and “the applicable premium has been 

paid.” 

 11 Prater argues that it is significant that the policy does not define “birthday 

parties,” thereby potentially excluding a wide range of meritorious claims (e.g., that 

of an electrician who is repairing a light while the birthday party is occurring). It is 

undisputed that Prater’s injury occurred at a birthday party and within the scope of 

that birthday party’s activities, and the parties do not contest the meaning of the term 

“birthday party,” so the fact that the policy does not define the term “birthday party” 

is of no significance. 

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C. Neither the “Legal Liability to Participants” endorsement nor the “Professional 

Liability Coverage” endorsement add coverage that would encompass Prater’s 

injuries. 

Prater contends that even if his injury were not covered under the general 

provisions of the policy, such coverage is added by either of two endorsements: the 

Legal Liability to Participants endorsement and Professional Liability Coverage 

endorsement. We disagree. 

The Legal Liability to Participants endorsement (Aplt. App. 63–64) modifies 

the Commercial General Liability Coverage Form by adding coverage for bodily 

injury to a “Participant,” defined as “a person practicing, instructing or participating 

in any physical exercises or games, sports, or athletic contests . . . .” Aplt. App. 64. 

Prater alleges that he was participating in physical exercises when he was injured, so 

he was a “Participant.” But the endorsement, like the Coverage Form it modifies, 

excludes a duty to defend for damages “to which this insurance does not apply.” 

Aplt. App. 63. 

Similarly, the policy’s “Professional Liability Coverage” endorsement does 

not add coverage for Prater’s injury. That endorsement, too, is limited by the phrase 

“to which this insurance applies.” Aplt. App. 72 (emphasis added). It further states, 

in language paralleling that of the Legal Liability to Participants endorsement and the 

Coverage Form: “However, we will have no duty to defend the insured against any 

‘suit’ seeking damages for ‘wrongful acts’ to which this insurance does not apply.” 

Id. 

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Because the insurance does not apply to injuries occurring at birthday parties 

when the insured did not report that it hosts such parties, did not obtain Nationwide’s 

consent, and did not pay the applicable premiums, neither of these endorsements add 

coverage that would encompass Prater’s injuries. 

D. Even if the policy’s coverage provisions covered birthday parties not reported 

to or approved by Nationwide, the Designated Operations Exclusion 

[“Exclusion”] would exclude coverage for such parties. 

Under the Exclusion, the insurance did not cover any of Kingdom’s 

“operations as a sports complex or multi-purpose facility” unless those operations 

were “reported, paid for, and . . . approved by the program administrator.” Aplt. App. 

53. Birthday parties were part of Kingdom’s “operations” and did not meet any of 

the Exclusion’s three requirements—they were not reported to Nationwide, approved 

by Nationwide, or paid for with a higher or separate premium. They were therefore 

not covered. 

 Prater argues that the Exclusion does not apply to his lawsuit because he is 

suing on a premises liability theory, and the exclusion refers only to “operations” and 

not to “premises.” This is the same “premises liability” argument that Prater raised in 

the context of the Limitation, and it fails for the same reasons. The insurance covers 

Kingdom’s “premises” only insofar as the premises are used in an activity the insured 

has “reported” and “paid for,” and “that [has] been approved by the program 

administrator.” Aplt. App. 53.12

 12 Prater’s reliance upon Western Heritage Insurance Co. v. Chava Trucking, 

Inc., 991 F.2d 651 (10th Cir. 1993) is misplaced. In Chava Trucking, unlike in this 

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E. Prater’s “reasonable expectations” argument is waived, and even if it were not 

waived, it is meritless. 

 Finally, Prater argues that his injury is covered under Oklahoma’s “reasonable 

expectations” doctrine, which provides that “if the insurer or its agent creates a 

reasonable expectation of coverage in the insured which is not supported by policy 

language, the expectation will prevail over the language of the policy.” Max True 

Plastering Co. v. U. S. Fid. & Guar. Co., 912 P.2d 861, 864 (Okla. 1996). Prater 

waived that argument by failing to raise it below. Prater’s co-defendant Kingdom, 

which did raise it below, did not appeal, and Prater never adopted Kingdom’s 

argument. 

Even if Prater had not waived the reasonable expectations argument, however, 

it would fail on the merits. The policy as a whole cannot reasonably be understood as 

indicating an objective intent to cover birthday parties, because Kingdom neither 

reported to Nationwide that it hosted such events nor paid for such coverage, even 

though the application form specifically asked about birthday parties and the policy 

specifically included birthday parties only if they were reported and paid for by 

Kingdom and approved by Nationwide. 

V. CONCLUSION 

 

case, the insured purchased and paid for insurance for the activity out of which the 

injury arose. Specifically, Chava Trucking purchased additional coverage for injuries 

to “truckmen,” and the injury in that case arose out of a truck accident. See id. at 654. 

In that context, we held that an automobile exclusion did not negate the coverage 

provided by the later-purchased trucking insurance, as such an interpretation would 

effectively “nullif[y] the grant” of coverage. See id. at 656. 

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The policy Kingdom purchased, construed as a whole, did not cover lawsuits 

arising out of injuries occurring at birthday parties because Kingdom did not report 

that it hosted such parties, obtain approval from Nationwide for such parties, or 

purchase coverage for such parties. We sympathize with the Praters because it is not 

their fault that Kingdom was underinsured for the events it was hosting. But the 

policy as a whole is unambiguous, and we must enforce contracts as written if the 

parties’ objective intent is clear. Because Nationwide has no obligation to indemnify 

Kingdom or the other defendants for Prater’s injuries, we AFFIRM the district court.

Entered for the Court 

David M. Ebel 

Circuit Judge 

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