Opinion ID: 175986
Heading Depth: 3
Heading Rank: 2

Heading: The sickness exclusion

Text: Defendant argues we can alternatively affirm the district court's decision based on the policies' sickness exclusion. The policies provide that an injury, to be covered, must not be caused by or contributed to by Sickness. (Appellant's App. at 61, 75.) The policies also explain in the exclusions section that Defendant will not pay a benefit for a Loss which is caused by, results from, or [is] contributed to by ... Sickness or its medical or surgical treatment, including diagnosis. (Appellant's App. at 63, 77.) Defendant argues we should apply these provisions to bar coverage for Plaintiff. However, in defining the term Sickness, the policies explain that Sickness means an illness or disease which results in a covered Loss. (Appellant's App. at 61, 76 (emphasis added).) Defendant contends that the word covered before Loss means simply that a loss must involve a covered person. However, Loss is itself defined as the death of the Covered Person, (Appellant's App. at 61, 75), and thus Defendant's interpretation would render meaningless the word covered in the sickness definition. We are also not persuaded that a reasonable person in the position of the insured would understand the phrase covered loss to mean anything other than a loss that would be covered under the insurance policies. We accordingly conclude that a reasonably prudent layperson could interpret the sickness definition to extend coverage to losses resulting from an illness or disease, despite other language in the policy suggesting a contrary result. See Yaffe Cos. v. Great Am. Ins. Co., 499 F.3d 1182, 1189 (10th Cir.2007) (Oklahoma law imposes coverage when `an insured could reasonably have expected coverage' based on the policy language, and to a reasonable person looking only at this language, the phrase `excess of the other insurance' could well mean `to the extent that the other insurance is not required to pay (even if the other insurance applies to the loss).' (citation omitted)). This situation is thus directly analogous to the recent Oklahoma case of Andres v. Okla. Farm Bureau Mutual Insurance Co., 227 P.3d 1102 (Okla.Civ.App.2009). In that case, an Oklahoma appellate court concluded that a reasonable person in the position of the insured would have understood one provision in the policy to cover certain damages and another provision to exclude such coverage. Id. at 1106. The court stated: Because the policy contained these conflicting provisions, it is ambiguous. Accordingly, we construe this ambiguity against [the insurer] and in favor of Plaintiffs, and we conclude that the policy provided Plaintiffs coverage for damages caused by the overflow of raw sewage into their home. Id. Similarly, the policy in this case contains contradictory provisions, one of which would reasonably be understood to extend coverage to losses caused by sickness, while two other provisions would reasonably be understood to exclude such coverage. Because reasonable persons could differ as to how to reconcile these contradictory provisions, the policy is reasonably susceptible to more than one construction and is therefore ambiguous. See id.; see also Haworth v. Jantzen, 172 P.3d 193, 196-97 (Okla. 2006) (holding that insurance provisions excluding damage arising out of the use of land motor vehicles subject to registration and damage arising out of the use of land motor vehicles if the injury or damage occurs away from the insured premises were ambiguous because together they could be read in four different ways). Under longstanding Oklahoma law, in the event of ambiguity or conflict in the policy provisions, a policy of insurance is to be construed strictly against the insurer and in favor of the insured. Spears, 73 P.3d at 868. We thus construe the policies to cover losses that result from sickness and hold that the sickness exclusion did not bar coverage for Plaintiff's insurance claim.