Title: BERNAL v. CHARTER COUNTY MUTUAL INSURANCE CO.
Citation: 2009 OK 28, 209 P.3d 309
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: May 12, 2009

BERNAL v. CHARTER COUNTY MUTUAL INSURANCE CO. Annotate this Case BERNAL v. CHARTER COUNTY MUTUAL INSURANCE CO. 2009 OK 28 209 P.3d 309 Case Number: 103329 Decided: 05/12/2009 THE SUPREME COURT OF THE STATE OF OKLAHOMA DONNA KAY BERNAL, personal representative of the estate of Billy Bernal Plaintiff/Appellant v. CHARTER COUNTY MUTUAL INSURANCE COMPANY Defendant/Appellee ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. II ¶0 The representative of a deceased person's estate brought an action against automobile insurer to recover uninsured motorist (UM) benefits under a policy issued in another state. The District Court, Cleveland County, William C. Hetherington, Jr., Judge, gave summary judgment to the insurer. The Court of Civil Appeals affirmed that disposition. THE COURT OF CIVIL APPEALS' OPINION IS VACATED AND THE TRIAL COURT'S SUMMARY DISPOSITION AFFIRMED. Justin Wade Perry, Lampkin & Associates, Oklahoma City, Oklahoma, Rex Travis and Paul D. Kouri, Oklahoma City, Oklahoma, for Plaintiff/Appellant Stefan Wenzel, Oklahoma City, Oklahoma, for Defendant/Appellee ¶1 The question presented for review is whether the Court of Civil Appeals (COCA) erred when it affirmed the trial court's summary judgment for defendant/appellee by whose terms Texas law is applied to an insurer's uninsured/underinsured motorist (UM/UIM, hereafter called UM) liability coverage for a loss in a vehicular accident that occurred in Oklahoma. The insurance policy in question was written in Texas and the insured vehicle was registered and principally garaged in that state. We agree that Texas law is to be applied to today's cause. COCA's opinion is vacated and the trial court's summary disposition affirmed. I. ANATOMY OF THE LITIGATION ¶2 On 27 July 2001 Oklahoma resident Billy Bernal, a passenger in a truck driven by Brandon Wiggins, was fatally injured in an in-state automobile accident. The truck was owned by Brandon's grandmother, Dorothy Wiggins, a Texas resident. It was insured by defendant Charter County Mutual Insurance Company (Charter) and principally garaged in Texas. The Charter policy, written in Texas and issued to Dorothy Wiggins, provides for $20,010 in liability coverage and the same limit for uninsured/underinsured motorist coverage. ¶3 The UM benefits from Billy's Oklahoma policy were paid to appellant Donna Kay Bernal (Bernal) who is Billy's mother and personal representative of his estate. Charter paid the liability limit of its policy but refused to pay any UM coverage benefits. The latter liability was denied based on Charter's policy provision that excluded the covered vehicle from the coverage for an uninsured motor vehicle.2 Bernal seeks full payment of the UM policy benefits that would protect Billy because of his passenger status in the truck insured by Charter.3 The parties agree that (1) the accident was the result of Brandon Williams' negligence, and (2) Brandon's own insurance coverage was insufficient to provide full compensation for Billy's death. ¶4 Bernal sought summary judgment urging Oklahoma law should apply to the claim. Charter filed a response brief in opposition to Bernal's motion and a cross-motion for a like disposition in its favor. It urged Texas law is applicable. The trial judge denied Bernal's motion and granted summary judgment for Charter. The Court of Civil Appeals, Div. II, affirmed the trial court's decision. Bernal's certiorari paperwork brings to our attention an earlier COCA, Div. III, opinion that appears to be in conflict with the decision rendered below. We granted certiorari to resolve this interdivisional conflict. II. STANDARD OF REVIEW ¶5 Summary relief issues stand before us for de novo review.4 All facts and inferences must be considered in the light most favorable to the non-movant.5 Just as nisi prius courts are called upon to do in deciding in the first instance whether summary relief is warranted, so also appellate tribunals must bear an affirmative duty to test de novo for its legal sufficiency all evidentiary material received in summary process as movant's support for the relief that is to be granted.6 Only if the court should conclude there is no material fact (or inference) in dispute and the law favors the movant's claim or liability-defeating defense is the moving party entitled to the summary relief that is sought. III. COCA'S OPINION AND THE PARTIES' CERTIORARI ARGUMENTS ¶6 COCA affirmed the trial court's decision. It concluded that Oklahoma's choice-of-law rule requires that Texas law govern this cause. That rule - applicable in automobile vehicle insurance cases - was earlier announced by this court in Bohannan v. Allstate Ins. Co.7 It provides the validity, interpretation, application and effect of the provisions of a motor vehicle insurance contract should be determined in accordance with the laws of the state in which the contract was made, unless (1) those provisions are contrary to Oklahoma's public policy or (2) the facts demonstrate another jurisdiction has the most significant relationship with the subject matter and the parties.8 ¶7 Bernal urges both Bohannan exceptions apply to her cause. She first asserts Charter's policy exclusion - of a vehicle that is "[o]wned, furnished or available for the regular use of the insured or any family member"9 - from the policy's definition of an uninsured motor vehicle violates Oklahoma's public policy. According to Bernal, because UM coverage must, for Oklahoma policies, follow the person rather than the vehicle, Charter's exclusion violates this state's public policy and is hence unenforceable. For support of this position she brings to the court's attention Lewis v. State Farm Mut. Auto. Ins. Co, a decision by COCA, Div. III.10 ¶9 Bernal further urged Oklahoma has more significant contacts to the subject matter and to the parties than does Texas. ¶10 Lastly, according to Charter, even if application of the Bohannan rule were to reveal Oklahoma's substantive law applies here, the result would be immaterial because the terms of ¶11 On certiorari, Bernal urges (1) COCA's decision is in conflict with the teachings of Lewis, and (2) COCA's analysis under the significant relationship test was insufficient in light of the review required by Bohannan. IV. A. OKLAHOMA CHOICE-OF-LAW RULES ¶12 The application of choice-of-law rules among the various states continues to evolve.19 Oklahoma has not been immune to a progression of mutations.20 The state currently applies different choice-of-law rules to actions that sound in tort from those that sound in contract. While the Restatement's most significant relationship test has been adopted by this court for tort cases,21 it has not been fully extended to contract questions. This state's established general choice-of-law rule for contract actions is bottomed on the terms of 15 O.S. § 162.22 According to its provisions, the rule of lex loci solutionis - the law where the relevant contract performance occurs - is to be applied.23 When there is no indication in the contract's text where performance is to occur, the lex loci contractus rule - the law of the place where the contract is made - will govern.24 In Bohannan, the court, persuaded by the need for flexibility and analysis of competing state interests in controversies, carved an exception to application of the lex loci contractus rule for choice-of-law questions in motor vehicle insurance cases that deal with conflicting state laws.25 In those instances, the traditional lex loci contractus rule governs the validity, interpretation, application and effect of the motor vehicle insurance contracts except where (1) the provisions would violate Oklahoma public policy or (2) the facts demonstrate another jurisdiction has the most significant relationship to the subject matter and the parties. B. OKLAHOMA'S UNINSURED MOTORIST STATUTE PROVIDES A SPECIFIC CHOICE-OF-LAW PROVISION THAT REQUIRES TEXAS LAW'S APPLICATION TO GOVERN TODAY'S CAUSE ¶13 The precise and dispositive issue pressed for our review is whether Texas law or that of Oklahoma must govern in this case the terms of the insurance policy issued in Texas. While both parties agree that Bohannan controls the choice-of-law decision in UM cases, they disagree about the result of its application to this lawsuit. Although this is a conflict-of-laws problem, analysis of the choice-of-law rule announced in Bohannan - applicable to motor insurance cases dealing with conflicting state laws - is not called upon here. A choice-of-law analysis is unnecessary and may be dispensed with in this case. We are simply unable to decide the Texas insurer's liability by applying Oklahoma law because we are met with an explicit legislative exclusion. The terms of Oklahoma's UM statute, 36 O.S. 2001 § 3636,26 clearly reveal that under its provisions Texas law must govern today's cause. ¶14 The Oklahoma legislature has directed a specific choice-of-law provision to govern under the UM statute. By its own terms, § 3636(A) applies solely to a policy "issued, delivered, renewed, or extended in this state with respect to a motor vehicle registered or principally garaged in this state . . . ." (emphasis supplied)27 Whenever the legislature commands us to apply the law of another state, we must abide by its directive. The parties do not dispute the automobile in this single-vehicle accident was registered and principally garaged in Shallowater, Texas.28 That state's law must hence govern the terms of liability under that state's insurance policy. ¶15 That both Bernal and Charter cite to Bohannan for support of their positions reveals the difficulty inherent in choice-of-law analyses. Because the terms of §3636 were in force when Bohannan was decided, and the certified question posed to us there included a conflict-of-laws question dealing with UM insurance coverage, a review of that cause is instructive here. ¶16 There the plaintiff, a California resident who was a passenger in a vehicle covered by a policy issued in Oklahoma, was injured in an in-state automobile accident. She was potentially eligible to receive UM benefits under both the Oklahoma policy and her own California coverage. Application of California's non-stacking or set-off statutes governing the terms of plaintiff's California contract reduced the UM coverage she would receive under her policy by the amount of the received Oklahoma UM proceeds. This setoff operated to deny plaintiff the realization of the benefits she was due as an insured under the Oklahoma UM insurance contract for which premiums were paid. It also created for the California insurer an unexpected windfall. The effect of this setoff, according to the court, offended the legislative policy expressed in § 3636.29 Because this state's public policy was severely impacted, the contract provision became unenforceable in an Oklahoma forum.30 ¶17 The facts in today's case differ from those in Bohannan. Here, the UM proceeds from Billy's Oklahoma policy were paid to his estate. That Texas law permits nonpayment of UM benefits under the terms of the Charter policy does not implicate any insurance benefits under an existing Oklahoma policy. Neither UM benefits contracted and paid for pursuant to Oklahoma law are implicated here nor were any benefits due under our law either denied or diminished. It is this distinction that brings today's cause strictly within the purview of the § 3636 terms and militates against triggering the public-policy exceptions recognized in Bohannan. ¶18 By legislative force, the terms of § 3636 do not reach all insurance contracts enforceable within the state. Its provisions are inapplicable to a policy issued in Texas that insures a vehicle registered and principally garaged in that state. That the difference in result here from that reached in Bohannan stems from the manner in which a foreign insurance policy's terms are drafted - a denial of UM benefits under the contract provisions as opposed to a setoff of UM benefits against those provided under other insurance policies - is doubtless of little significance to the decedent's family. But it does and must affect the answer to the question whether Oklahoma's UM statute may be extended to govern today's cause. If the statutory language that limits the applicability of the § 3636 terms is indeed overly restrictive, the change, if needed, must come from Oklahoma's legislature rather than from her court.31 V. SUMMARY ¶19 Oklahoma's statutory law provides a choice-of-law provision for the terms of her uninsured motorist statute, 36 O.S. 2001 §3636. Its terms regulate insurance policies "issued, delivered, renewed, or extended in this state with respect to a motor vehicle registered or principally garaged in this state . . . ." The vehicle in today's cause was registered and principally garaged in Texas. That state's law must hence govern the liability incurred under insurance policy provisions tendered in this suit. To the extent that the opinion in Lewis, supra note 10, may appear inconsistent with today's pronouncement, it is expressly disapproved. ¶20 The Court of Civil Appeals' opinion is vacated and the trial court's summary disposition affirmed. ¶21 ALL JUSTICES CONCUR FOOT