Opinion ID: 159796
Heading Depth: 3
Heading Rank: 2

Heading: In the Business of Staffing Resources

Text: It is similarly clear that Canada was performing the business of Staffing Resources when the accident occurred. Staffing Resources paid Canada to drive a truck for its client, Air Liquide, and the accident took place while Canada was performing these duties. Staffing Resources was in the business of providing employees to its clients, and, as its Drivers Policy indicates, Staffing Resources understood that its potential liability extended to incidents that might occur while its driver was assigned to a client. Canada was therefore acting in the business of Staffing Resources when the accident occurred. Thus, Canada was a Staffing Resources employee driving a covered auto in the business of Staffing Resources. Accordingly, we hold that Canada and Air Liquide are insureds under the Continental policy. - 12 - B. Is the Continental Policy Excess to the CIGNA Policy? Because Canada and Air Liquide (as well as Staffing Resources) are insureds under the Continental policy, and because Canada and Staffing Resources (as well as Air Liquide) are insureds under the CIGNA policy, it is necessary to examine the policies to determine whether each purports to provide primary or excess insurance for the accident. By its terms, the CIGNA policy provides primary insurance for this incident: “For any covered ‘auto’ you own, this Coverage form provides primary insurance.” It is undisputed that Air Liquide owned the truck Canada was driving at the time of the accident. Thus, the CIGNA policy purports to be primary. The Continental policy provides: “For any covered ‘auto’ you don’t own, the insurance provided by this Coverage Form is excess over any other collectible insurance.” The issue thus presented is whether the CIGNA policy constitutes “other collectible insurance.” Resolving this matter requires us to consider the significance, if any, of the fact that Air Liquide’s policy with CIGNA is a form of self-insurance. Although Oklahoma apparently has not decided whether self-insurance is “other collectible insurance,” we believe our decision in Industrial Indemnity Co. v. Continental Casualty Co., 375 F.2d 183 (10th Cir. 1967), is controlling on this - 13 - issue. 5 Industrial Indemnity concerned an incident arising out of two subcontractors’ work on an Oklahoma oil lease. The first subcontractor, Halliburton Oil Well Cementing Company (“Halliburton”), was insured by Continental Casualty Company (“Continental Casualty”); the second, Johnson Construction Company (“Johnson”), was insured by Industrial Indemnity Company (“Industrial”). See id. at 184. While en route to the job site, a Halliburton employee was injured when attempting to disconnect a Halliburton truck from a Johnson tractor that had towed the truck through the mud. See id. The Halliburton employee sued Johnson, and Johnson claimed that, in addition to being an insured under its policy with Industrial, it was an insured under Halliburton’s policy with Continental Casualty. The court agreed that Johnson was also an insured under the Continental Casualty policy, and then addressed the question of how to allocate the loss between the two policies. It is apparent from the court’s reasoning that both policies contained substantially identical “other insurance” clauses purporting to render that policy excess if there was other insurance. 6 See id. at 185. It is further apparent that 5 Industrial Indemnity required us to apply and predict Oklahoma state law. See id. at 185. 6 We note that the terms “other insurance” and “other collectible insurance” are, for present purposes, substantially identical. See Self-Insurance Against Liability as Other Insurance Within Meaning of Liability Insurance Policy, 46 A.L.R.4th 707, 709 (1986) (noting that “[c]ourts do not generally distinguish (continued...) - 14 - Halliburton’s policy with Continental Casualty provided that Halliburton would reimburse Continental Casualty for any losses. See id. Continental Casualty argued to this court that “Halliburton was a self-insuror by reason of its agreement to reimburse the insurance carrier for the losses and hence there was no ‘other insurance.’” Id. We rejected this argument and affirmed the district court’s proration of the loss between the policies, stating that “[t]here is no authority in Oklahoma which would dictate that a distinction should be made between the nature of the coverage.” Id. at 186. Thus, we held that the fact that one policy was, in effect, self-insurance did not diminish the applicability of an “other insurance” clause. We follow the reasoning of Industrial Indemnity in the present case and conclude that Air Liquide’s self-insurance is “other collectible insurance” within the meaning of the Continental policy. We have found no authority in Oklahoma contradicting our decision in Industrial Indemnity, and we remain of the opinion that it reaches the correct result. Air Liquide’s decision to self-insure does not relieve it from primary liability simply because the underlying accident was also covered by another insurance policy. Were we to hold otherwise, Air Liquide would receive the double windfall of avoiding significant premium payments (...continued) 6 among these phrases.”). - 15 - under a standard insurance policy and avoiding primary liability for an accident caused by one of its vehicles. We predict that Oklahoma would not reach such an inequitable result. 7 Thus, we conclude that Air Liquide’s CIGNA policy is “other collectible insurance” within the meaning of the Continental policy, notwithstanding Air Liquide’s obligation to fully reimburse CIGNA for any losses. 8 As a result, the 7 Appellees’ citation of Beech Aircraft Corp. v. United States, 797 F.2d 920 (10th Cir. 1986), is misguided. Beech Aircraft held that self-insurance was not insurance withing the meaning of a tax code provision allowing for deductibility of insurance premiums. See id. at 922. Thus, the issue addressed in Beech Aircraft is plainly distinguishable from the case at bar. We also note that at least two of the cases from other jurisdictions relied upon by the district court are plainly distinguishable from the present case. See St. John’s Reg’l Health Ctr. v. American Cas. Co., 980 F.2d 1222, 1225 (8th Cir. 1992) (addressing a pooled liability fund); Physician’s Ins. Co. of Ohio v. Grandview Hosp. & Med. Ctr., 542 N.E.2d 706 (Ohio App. 1988) (addressing a hospital’s contractual obligation to indemnify an employee). Neither of these cases involved a fronting policy like the CIGNA policy in the present case, in which a company that is in the business of insuring against loss acts as a surety for the self-insured’s ability to satisfy a judgment. We also note that other jurisdictions have followed the approach of Industrial Indemnity and the case at bar. See Self-Insurance Against Liability as Other Insurance Within Meaning of Liability Insurance Policy, 46 A.L.R.4th 707 (1986) § 3[a], 4[a] (collecting cases); 1 Couch on Insurance 3d § 10:6 (same). In any event, the cases relied upon by the district court are from other jurisdictions and, hence, are not controlling, whereas Industrial Indemnity represents controlling Tenth Circuit authority interpreting Oklahoma law. 8 Cf. 15 Couch on Insurance 3d § 217:9 (“Any applicable deductible is relevant between the insurer and the insured only, and does not apply to proration.”) - 16 - terms of the Continental policy make it excess to the CIGNA policy. 9 Thus, we reverse the district court’s holding that the Continental policy was primary.