Court Opinion

ID: 6930108
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:54:35.115591+00
Date Added: 2024-06-11T16:07:07.843045
License: Public Domain

HOLLOWAY, Circuit Judge,
concurring in part and dissenting in part:
I concur in Parts I, II and III of the majority opinion but respectfully dissent with respect to Part IV concerning the merits of the coverage controversy. I agree with the majority’s conclusion that the fellow-employee exclusion contained in clause 2.a. of the State Farm policy is applicable here as a purely contractual matter. However, because I believe that this policy exclusion is impermissibly broader than the exceptions to coverage allowed under Wyoming’s financial responsibility law and its compulsory insurance law, I would hold that coverage is mandated as to Dyer by state law to the extent of the minimum coverage amount specified by the statutes.
Under Wyoming law, every owner of a motor vehicle that is required to be licensed must have in full force and effect an automobile liability policy conforming with the provisions of the state’s financial responsibility statute.1 Wyo.Stat.Ann. § 31^4-103 (1977). That statute mandates that an owner’s liability policy shall “[ijnsure the person named and any other person, as insured, using the covered motor vehicle with the express or implied permission of the named insured.” Wyo.Stat.Ann. § 31-9-405 (Cum.Supp.1985) (emphasis added). However, the statute permits an exclusion for “any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured. ” Wyo.Stat.Ann. § 31-9-405(e) (emphasis added).
Whether the minimum coverage mandated ($25,000 for bodily injury or death) must be afforded in this case depends on the meaning of “the insured” in the statutory exception in § 31-9-405(e). The majority opinion construes “the insured” to mean, in effect, “any insured” so as to encompass all who could be covered by the policy. See majority op. at 523-524. By construing the statutory exception to deny coverage in this way, the majority disregards the rule of statutory construction applied by the Wyoming Supreme Court in Allstate Insurance Co. v. Wyoming Insurance Department, 672 P.2d 810 (Wyo.1983):
A compulsory liability policy is to be construed most strongly against the insurer— that is, such statutes as those with which we are here concerned [the Wyoming financial responsibility and compulsory insurance laws] must be liberally and broadly construed in favor of the insured in order to accomplish its [sic] purpose.
Id. at 817 (citing Couch on Insurance 2d, Automobile Insurance § 45:692, p. 330 (1961)) (emphasis added). In Allstate, the Wyoming Supreme Court held that under the specific exceptions to the compulsory insurance law, the Court could not give effect to the household exclusion provisions of Allstate’s policies. “The effect of such a decision would be to violate the statutes and public policy of the State of Wyoming....” 672 P.2d at 815.
Contrary to the interpretation indicated by Allstate, the majority opinion here construes the statute in favor of the insurer. Under Allstate, because the statutory reference to “the insured” is ambiguous, the term should be construed in favor of coverage, i.e., as referring only to the particular person seeking coverage under the policy. Thus, Wyoming law supports Colley’s position that the statutory exception for “death of an employee of the insured” is not applicable because Dodgion (the decedent) was not an employee of Dyer (the person seeking coverage “as insured”). Therefore, State Farm is required by the insurance statutes and the clearly declared public policy of Wyoming to provide coverage to Dyer to the extent of the statutory minimum.
This conclusion is reinforced by close study of the statutory language of the exception in (e) and another subsection of the statute. In subsection (b)(ii), the statute requires an owner’s policy to insure the person named and any other person, “as insured,” so long as the other person is using the vehicle with the permission of the named insured. Under the statute, then, the permissive user (or *526operator) becomes “the insured,” entitled to protection from the stated liability. Coverage may only be excluded for “an employee of the insured.” The insured in this case is Dyer, the permissive user operating the vehicle. Because Dodgion is not an employee of Dyer, Dyer may not be excluded from coverage. Use of the definite article “the ” in the statute shows that “the insured” does not refer to the entire class of those who may be insured but, instead, only to the particular insured seeking coverage under the policy. In light of this analysis and the mandate of Allstate, I read the statutory exception to apply only where an employee-employer relationship exists between the injured claimant and the party seeking coverage under the policy.
This interpretation of the statute comports with cases in other jurisdictions construing similar statutes. For example, in United States v. Transport Indemnity Co., 544 F.2d 393 (9th Cir.1976), the California statutes in question excluded liability for “bodily injury ... of any employee of any insured_” Id. at 395. Finding the exclusion inapplicable, the Ninth Circuit stated that:
The courts have held that in order for an employee exclusion clause to operate, in the face of financial responsibility requirements (the sections of California law requiring coverage of permissive users)[,] the employment relationship must exist between the injured party and the party seeking protection under the act.
544 F.2d at 396 (emphasis added) (citations omitted).
The majority opinion relies on two Missouri cases to support its contrary interpretation of the statutory exception. See majority op. at 523. I do not believe that these cases are indicative of what the Wyoming courts would hold. In the leading case, Baker v. DePew, 860 S.W.2d 318 (Mo.1993), the Missouri Supreme Court, with two Justices dissenting in part, declined “to override the express agreement of the parties” to an insurance contract and instead upheld a fellow-employee exclusion despite Missouri’s Motor Vehicle Financial Responsibility Law. The eourt expressly based its holding on “the sanctity of contracts.” Id. at 324. The dissenting Justices in Baker rejected the majority’s reliance on “sanctity of contract” and found that the purpose of Missouri’s compulsory insurance law was to make sure that all owners and operators of motor vehicles were covered. Id. at 325. I am convinced that the dissenting Justices in Baker have the better-reasoned position. The Wyoming statutes with which we are here concerned, like the Missouri ones, mandate coverage for both owners and operators.2 Therefore, the statutory exception for liability to an employee of the insured is determined in this case by the injured person’s relation to the operator of the vehicle.
The Missouri Court’s interpretation giving primacy to the policy provisions is inconsistent with the clear holding of the Wyoming Supreme Court in Allstate. The Wyoming Court declared:
While the parties to an insurance contract have the right to embody in the policy such lawful terms as they wish, the insurance agreement must not conflict with pertinent statutes or public policy....
In those circumstances where insurance is required to comply with a statute and the insurance policy contains exclusions which are contrary to statutory mandates, it is held that such exclusion clauses are void as against public policy and the insurance policy will be enforced as though the exclusions were not contained therein.
Allstate, 672 P.2d at 816, 820 (citations omitted). In light of these clear pronouncements on the public policy of Wyoming, I must disagree with the majority opinion’s interpretation (majority opinion at 523) favoring the insurance company, when a plainly reasonable interpretation in favor of coverage is possible. See United States v. Transport Indemnity Co., 544 F.2d at 396 (“[so] long as coverage is available under any reasonable interpretation of an ambiguous clause, the insurer cannot escape liability.”).
*527The second case on which the majority relies, Short v. Safeco Ins. Co. of America, 864 S.W.2d 361 (Mo.App.1993), simply follows Baker without further explanation. Consequently, I find it similarly unpersuasive in light of the clear Wyoming law to the contrary.
The majority also bases its interpretation of the statute on the fact that “the Wyoming financial responsibility statute does not contain a severability-of-interest clause.” Majority op. at 523. This observation provides little or no insight into the meaning of the statute. Although a severability-of-interest clause is a common provision in automobile insurance policies, it is not the sort of provision that would be found in a statute. The effect of such a clause is simply to treat the named insured and the additional insured as if each had a separate policy. Thus, it is necessarily a contractual provision, rather than a statutory one. Moreover, even in the absence of a severability-of-interest clause, many courts treat the named insured and the additional insureds separately. The Wyoming Supreme Court recognized as much in Barnette v. Hartford Ins. Group, 653 P.2d 1375, 1382 (Wyo.1982) (severability-of-inter-ests clauses were added to the standard automobile policy for the purpose of clarifying the confusion that had existed due to conflicting decisions interpreting exclusion provisions).
Nor is the availability of worker’s compensation a compelling reason to construe the statute so as to deny coverage to Dyer. The majority relies on Barnette in support of its claim that the reason for the employee exclusionary clause in the statute was that the remedy for one employee injuring a fellow-employee should be workman’s compensation. Majority op. at 524. However, the Barnette court was discussing an insurance policy, not this statute. 653 P.2d at 1377. Barnette, in turn, relied on a Louisiana case that also dealt only with the interpretation of ca insurance policy. See Myers v. Fidelity and Casualty Co. of New York, 152 So.2d 96 (1963). Barnette never mentions the Wyoming compulsory insurance or financial responsibility statute. Thus, it is not probative of the purpose of these Wyoming statutes. Moreover, in Barnette, the court ultimately concluded that the policy exclusion did not deny coverage, even though worker’s compensation was available.
A better indicator of Wyoming’s public policy concerning the exclusivity of the worker’s compensation remedy is the Worker’s Compensation Law itself. In 1985, the time of Dodgion’s fatal accident, Wyoming Statute § 27-12-103 allowed recovery against a coemployee for “culpable negligence.” Wyo. StatAnn. § 27-12-103(a).3 Thus, worker’s compensation is not necessarily an exclusive remedy in this ease.4 For these reasons, the majority’s reliance on the statement from Barnette concerning worker’s compensation is misplaced.
In sum, under the principles of statutory interpretation applied in Wyoming, I am convinced that the statutory term “the insured” in the exclusionary language of the statute means Dyer, the party whose coverage is in question. Since Dyer was not Dodgion’s employer, the statutory exception is inapplicable and the mandatory minimum coverage should be afforded to Dyer. Accordingly, I would reverse the summary judgment denying coverage to the extent of the minimum prescribed by the Wyoming statutes ($25,000 because of bodily injury or death of one person) and hold that up to that statutory minimum, under § 31-9-405(b) and (e) coverage is mandated for Dyer. Above that limit, I would hold that the summary judgment was correct in determining that under the fellow-employee exclusion of section 2.a. of the policy, unaffected by the financial respon*528sibility law, no additional coverage was afforded to Dyer.5

. Wyoming's financial responsibility law is also known as the "Motor Vehicle Safety-Responsibility Act.” See Wyo.Stat.Ann. § 31-9-101.

. Wyo.Stat.Ann. § 31-9~405(a) provides: "As used in this act, 'liability policy1 means an owner's or an operator’s policy of liability insurance....” (Emphasis added).

. The current exclusive remedy provision of the Wyoming Worker’s Compensation Act, § 27-14-104, eliminates coemployee liability for culpable negligence.

. Even where worker's compensation is the preferred remedy for such injuries, its availability is not determinative. See, e.g., Larimore v. American Ins. Co., 314 Md. 617, 552 A.2d 889 (1987) (holding that fellow-employee exclusion was invalid in light of Maryland’s compulsory motor vehicle insurance law, even though injured worker was entitled to worker’s compensation benefits).

. Although coverage is in my view mandated by the statute, the question remains whether coverage is available to Dyer in view of Dyer’s alleged breach of the policy’s cooperation clause. However, I do not reach this issue because the majority opinion has not done so. See Boykin v. Alabama, 395 U.S. 238, 249 n. 3, 89 S.Ct. 1709, 1715 n. 3, 23 L.Ed.2d 274 (Harlan, J., dissenting).