Court Opinion

ID: 9959745
Source: CourtListenerOpinion
Date Created: 2024-04-12 16:00:41.717212+00
Date Added: 2024-06-11T08:18:51.721865
License: Public Domain

Appellate Case: 23-6102     Document: 010111031119      Date Filed: 04/12/2024    Page: 1
                                                                                  FILED
                                                                      United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                         Tenth Circuit

                              FOR THE TENTH CIRCUIT                          April 12, 2024
                          _________________________________
                                                                         Christopher M. Wolpert
                                                                             Clerk of Court
  THE ESTATE OF THOMAS CRELLY,
  deceased; TINA HLADIK, JULIE
  SCHMIDT, CALEB CRELLY, as Personal
  Representatives of the Estate of Kathleen
  Crelly, deceased,

        Plaintiffs - Appellants,

  v.                                                        No. 23-6102
                                                     (D.C. No. 5:21-CV-00588-R)
  STATE FARM MUTUAL                                         (W.D. Okla.)
  AUTOMOBILE INSURANCE
  COMPANY,

        Defendant - Appellee,

  and

  PROPERTY & CASUALTY
  INSURANCE COMPANY OF
  HARTFORD,

        Defendant.
                          _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before HARTZ, McHUGH, and FEDERICO, Circuit Judges.

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument. This order and judgment is not binding
 precedent, except under the doctrines of law of the case, res judicata, and collateral
 estoppel. It may be cited, however, for its persuasive value consistent with
 Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellate Case: 23-6102     Document: 010111031119         Date Filed: 04/12/2024        Page: 2

        The sole issue on this appeal is whether Oklahoma or Missouri law governs the

 interpretation of an automobile-insurance policy. On November 23, 2018, Kathleen

 Crelly was killed and Thomas Crelly was seriously injured in Oklahoma when a

 vehicle driven by James Drawbridge crossed into their traffic lane and struck their

 vehicle. Drawbridge carried automobile-liability insurance, but the limits of liability

 were far below the damages to the Crellys. Plaintiffs, the estate of Mr. Crelly1 and the

 personal representatives of the estate of Mrs. Crelly, then brought a diversity action

 against their own insurer, State Farm Automobile Insurance Company, in the United

 States District Court for the Western District of Oklahoma, seeking benefits under

 the uninsured-motorist provision of their policy. The policy was issued in Missouri,

 where the Crellys resided and principally garaged their vehicle.

        Oklahoma law would permit a claim, because it treats uninsured-motorist

 protection as encompassing coverage when the other driver is merely underinsured—

 that is, the other driver carries liability insurance but not enough to cover all the

 damages suffered by those having uninsured-motorist protection. See 36 Okla. Stat.

 § 3636(C). In contrast, there is no requirement of underinsured-motorist protection

 under Missouri law; such coverage is purely a matter of contract. See Rodriguez v.

 Gen. Acc. Ins. Co. of Am., 808 S.W.2d 379, 383 (Mo. 1991) (“There are no statutory

 requirements in Missouri for underinsured motorist coverage. Therefore, the

 existence of the coverage [is] determined by the contract entered between the insured

        1
         Mr. Crelly died while the district-court action was pending. His estate was
 therefore substituted as a plaintiff.
                                        Page 2 of 5
Appellate Case: 23-6102    Document: 010111031119        Date Filed: 04/12/2024     Page: 3

 and the insurer.”). Here, the State Farm policy did not include underinsured-motorist

 protection.

       On undisputed facts the district court granted summary judgment to State

 Farm, holding that Missouri law governed. Exercising jurisdiction under 28 U.S.C.

 § 1291, we agree and affirm the judgment below.

       This is not a case of first impression for this court. Rhody v. State Farm

 Mutual Insurance Co., 771 F.2d 1416 (10th Cir. 1985), concerned the amount of the

 uninsured-motorist benefits to be awarded for the death of Donnell Rhody Jr., a

 resident of Oklahoma who died in a vehicle accident in Oklahoma while driving a car

 garaged in Oklahoma. See id. at 1417–18. His vehicle was insured under an

 automobile policy issued in Texas to his parents; the policy also covered two vehicles

 garaged in Texas. See id. at 1417. Each vehicle had $10,000 in uninsured-motorist

 coverage. See id. at 1417–1418. Under Texas law the uninsured-motorist protection

 was limited to $10,000; under Oklahoma law the coverage for all three vehicles

 would be “stacked,” providing $30,000 in coverage. See id. at 1418. In litigation

 brought in the United States District Court for the Western District of Oklahoma, this

 court applied Oklahoma choice of law, which we said selected the law where the

 insurance policy was issued—namely, Texas. See id. at 1418–21.

       The Oklahoma Supreme Court modified the Rhody approach somewhat in

 Bohannan v. Allstate Insurance Co., 820 P.2d 787 (Okla. 1991). Although agreeing

 with the result in Rhody, see id. at 793 (“We would not disturb the application of the

 choice of laws rule in [Rhody].”), it recognized that there could be exceptions, stating

                                       Page 3 of 5
Appellate Case: 23-6102    Document: 010111031119        Date Filed: 04/12/2024       Page: 4

 that it was adopting “the following choice of laws rule to be applied in motor vehicle

 insurance cases involving conflicting state laws”:

        The validity, interpretation, application and effect of the provisions of a
        motor vehicle insurance contract should be determined in accordance
        with the laws of the state in which the contract was made, unless those
        provisions are contrary to the public policy of Oklahoma, or unless the
        facts demonstrate that another jurisdiction has the most significant
        relationship with the subject matter and the parties.

 Id. at 797.

        A more recent decision by the Oklahoma Supreme Court, however,

 indicates that those exceptions—which apply in general to motor-vehicle

 policies—do not apply to uninsured-motorist provisions. In resolving whether

 Oklahoma or Texas law governed an uninsured-motorist provision in an

 automobile policy, the court wrote: “A choice-of-law analysis is unnecessary

 and may be dispensed with in this case,” because “[t]he Oklahoma Legislature

 has directed a specific choice-of-law provision to govern under the [uninsured-

 motorist] statute.” Bernal v. Charter Cnty. Mut. Ins. Co., 209 P.3d 309, 316

 (Okla. 2009) (emphasis omitted). It explained that 36 Okla. Stat. § 3636 (the

 provision requiring automobile policies to include uninsured-motorist

 provisions unless rejected in writing by the insured) “[b]y its own terms . . .

 applies solely to a policy ‘issued, delivered, renewed, or extended in this state

 with respect to a motor vehicle registered or principally garaged in this state.’”

 Id. (quoting 36 Okla. Stat. § 3636(A), emphasis omitted). Because the policy at

                                       Page 4 of 5
Appellate Case: 23-6102     Document: 010111031119         Date Filed: 04/12/2024       Page: 5

 issue in the case before us satisfies none of the statutory conditions, the Oklahoma

 uninsured-motorist statute cannot apply.

        The law of the issuing state, Missouri, governs this case. Plaintiffs would have

 us certify the choice-of-law issue to the Oklahoma Supreme Court to permit it, in their

 view, to correct its errors. We decline the invitation.

        We AFFIRM the judgment of the district court.

                                              Entered for the Court

                                              Harris L Hartz
                                              Circuit Judge

                                        Page 5 of 5