Opinion ID: 170492
Heading Depth: 2
Heading Rank: 1

Heading: Proration of Liability

Text: If two policies cover the same risk for the same insured, but neither provides primary coverage, an excess clause controls over . . . an escape clause . . . and . . . conflicting `other insurance' clauses cancel each other, Equity Mutual, 747 P.2d at 950, with the loss shared by the insurers on a pro rata basis, id. at 954. The district court interpreted both the HCI and ACC policies as providing only excess coverage. There is no dispute on appeal that this is a proper description of the HCI policy. But HCI challenges that description of the ACC policy. It contends that ACC's policy was a primary policy. It argues that unlike its policy, the only language in ACC's policy that limits coverage when another policy applies is language buried in its other-insurance clause. Aplt. Br. at 11. Alternatively, it argues that the limiting language in the ACC policy is an escape clause. Following Oklahoma law regarding construction of insurance policies, we disagree. An insurance policy is to be treated as a contract and will be enforced according to its terms. Equity Mutual, 747 P.2d at 953. Under Oklahoma law, `[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others.' Dodson v. St. Paul Ins. Co., 812 P.2d 372, 377 n. 11 (Okla. 1991) (quoting Okla. Stat. tit. 15 § 157). Accordingly, when determining a policy's scope of coverage, we interpret the policy as a whole. See id. Applying these propositions to the ACC policy, we agree with the district court. The policy's other-insurance clause states that any loss shall be paid first by other policies that apply to the loss, that it will not serve as primary insurance where there is other applicable insurance, and that it will apply only to loss which is more than the total limit of those other policies, R. Vol. 1 at 27. Nothing stated elsewhere in the policy suggests otherwise. A policy need not use the word excess to be an excess policy. The definition of excess coverage in Equity Mutual does not itself use the word excess, see 747 P.2d at 954; it looks to the substance of the policy language, not whether any particular magic word is used. To be sure, the other-insurance clause states that it does not apply to other insurance policies . . . written as specific excess insurance over the limits of liability of this policy. R. Vol. 1 at 27. But the HCI policy is not so written; it makes no mention of the ACC policy. HCI's limits-of-liability provision states only that where other primary insurance has been purchased . . ., the limits of liability shall apply excess over any other valid and collectible insurance, R. Vol. 2 at 248; and its other-insurance clause states only that [i]f other insurance not afforded by [HCI] is available to any insured covering an occurrence also covered hereunder, the insurance afforded hereunder shall be excess of and not contribute with such other insurance. Id. at 255. Although the first quoted language appears in a limits-of-liability provision rather than an other-insurance clause, we fail to see how the position of that language causes the HCI language to prevail over the ACC language. Read as a whole, the two policies are essentially identical with respect to priority of coverage. We also are not persuaded by HCI's contention that ACC's other-insurance clause is an escape clause  that is, that it disclaims any and all liability if other insurance is available. Equity Mutual, 747 P.2d at 954; see id. (if one policy has excess coverage and a second has an escape clause, the first is excess over the second). HCI contends that the clause imposes so many conditions that it is effectively an escape clause. We disagree. The ACC policy does not disclaim any and all liability, id.; nor does it accomplish that result indirectly. Like the HCI policy, it provides coverage once the coverage of other policies has been exhausted. Both policies provide real, not illusory, coverage even when there may be other coverage. Neither policy has language comparable to what we construed as creating escape clauses in State Farm Mutual Automobile Insurance Co. v. Mid-Continent Casualty Co., 518 F.2d 292, 297 (10th Cir.1975) (insurance `shall not apply to any liability or loss against which the insured . . . has other collectible insurance applicable thereto, in whole or in part'; `insurance shall not apply to the rentee if other valid and collectible automobile liability insurance, either primary or excess, is available.'). In sum, both policies provide excess coverage. Accordingly, the other-insurance clauses must be disregarded, with the loss shared by the insurers on a pro rata basis. Equity Mutual, 747 P.2d at 954. Under Oklahoma law the apportionment is determined according to the ratio each respective policy limit bears to the cumulative limit of all concurrent policies. Id. HCI does not dispute that it must pay 10/11 of the loss if both policies provide excess coverage.