Opinion ID: 3209138
Heading Depth: 4
Heading Rank: 1

Heading: Binding Wyoming Precedent

Text: The Wyoming Supreme Court has previously analyzed when a fellowemployee exclusion (referred to as a “cross-employee exclusion” in the opinion 2) precludes coverage. In Barnette v. Hartford Insurance Group, 653 P.2d 1375 (Wyo. 1982), the Supreme Court considered the exclusion in a case where one employee had injured his fellow employee in an automobile accident, resulting in 2 The cross-employee exclusion stated: None of the following is an insured:
employer with respect to bodily injury to any fellow employee of such person injured in the course of his employment. 653 P.2d at 1377. -5- a lawsuit. The defendant-employee sought indemnity from the corporation’s automobile liability insurer, which claimed the cross-employee exclusion precluded coverage. As here, there was no issue that the defendant employee was an “insured” under the policy. In addition, the policy contained a severability clause similar to the one in Cloud Peak’s policy with Peerless. The Barnette court found the cross-employee exclusion did not preclude coverage for the defendant-employee. Id. at 1383. In analyzing the policy, the court concluded the following rule controls: The cross-employee exclusionary clause denies indemnity where the injured person is an employee of the insured seeking coverage but—it does not deny indemnity where the injured person is not an employee of the insured who seeks protection under the policy. Id. at 1379 (emphasis in original). In other words, “[i]f . . . the insured in question is not an employer who seeks policy protection from the claims of employees, then the cross-employee exclusionary rule cannot interfere with the coverage of that insured.” Id. at 1383. The court then relied on the severability clause, finding that the driver of the vehicle was an insured vis-a-vis the injured employee. The court emphasized the importance of the severability clause, stating that it was designed to clarify when “coverage would extend to an additional insured seeking protection from the claim of a co-employee and who was not himself or herself the claimant’s employer.” Id. at 1376. The severability clause “comes to [the] rescue” for employees who cause injuries to -6- their fellow employees. Id. at 1378. The court emphasized that insurance companies had inserted the severability clause to “clarify the problem” of injuries to cross employees, and by adding the clause the person seeking protection is the “insured” under the policy. Id. And because an insured who is not the employer of the injured party is not “obligated to protect employees through either compensation contribution or private insurance,” the court held that coverage should not be denied. Id. The Wyoming Supreme Court’s holding is clear: when a fellow-employee (or cross-employee) exclusion is combined with a severability clause, coverage will not be precluded when the insured in question is a fellow employee seeking policy protection. Peerless argues that Barnette is of “limited use in this case” because the Wyoming Supreme Court seemed to confuse the fellow-employee exclusion, which addresses injuries to one employee caused by another employee, with an “employee of the insured” exclusion, which addresses injuries to an employee caused by an employer. Aplt. Reply Br. at 8–9. But Barnette is onpoint Wyoming Supreme Court precedent, and controls the outcome here. This is not the first time we have recognized the binding nature of Barnette. In State Farm v. Dyer, 19 F.3d 514, 522 (10th Cir. 1994), we held that a fellowemployee exclusion applied only because the policy did not contain a severability clause. “We agree with the trial court’s conclusion that the State Farm liability insurance policy does not contain a severability clause and for that reason, -7- Barnette is not controlling.” Similarly, in an unpublished opinion, we relied on Barnette in declining to apply a fellow-employee exclusion where the person seeking coverage was not the employer of the injured employee. See Rodabaugh v. Continental Cas. Co., 1995 WL 471082 (10th Cir. 1995). In that case, after a fatal car accident, the estate of the dead employee sued the other employees for causing the accident. Because the accident happened during the course of employment, the defendants sought coverage under their employer’s insurance and the insurance company claimed the fellow-employee exclusion precluded coverage. As in Peerless’s case, the insurance policy had a severability clause, and separate exclusions for fellow-employee injuries and “employee of the insured” injuries. Nonetheless, we noted that the exclusion in Barnette contained nearly identical wording, and therefore held that we were bound by the Wyoming Supreme Court’s decision applying coverage in such cases. Id. at . 3 3 We recognize that other courts have questioned the logic of Barnette and—when in a position to do so—come to a different conclusion. For example, the Missouri Supreme Court criticized the Barnette decision, citing the opinion’s apparent confusion between fellow-employee exclusions and “employee of the insured” exclusions. See Baker v. DePew, 860 S.W.2d 318, 322 (Mo. 1993) (“In Barnette, the Wyoming court was actually considering a fellow employee exclusion clause (which they referred to as a ‘cross-employee’ exclusion clause). However, virtually all of the cases that the Wyoming court discussed and the treatises relied upon involved employee exclusion clauses. The Wyoming court apparently either never distinguished between the two or assumed that both clauses have the same purpose and therefore should be applied in the same manner to reach the same result.”). The Missouri Supreme Court correctly noted that nearly all of the cases cited by the Barnette majority dealt with exclusions for injuries caused by an employer rather than a fellow employee. Id.; cf. Barnette, (continued...) -8- Here, too, we find Barnette controls and affirm the district court’s conclusion that the fellow-employee exclusion does not preclude coverage. 4