Court Opinion

ID: 164394
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:18:50+00
Date Added: 2024-06-11T16:43:52.368629
License: Public Domain

F I L E D
                                                                       United States Court of Appeals
                                                                               Tenth Circuit
                        UNITED STATES COURT OF APPEALS
                                                                               FEB 26 2004
                                   TENTH CIRCUIT
                                                                           PATRICK FISHER
                                                                                   Clerk

 AMERICAN ECONOMY INSURANCE
 COMPANY,

          Plaintiff-Appellee,
 v.                                                          No. 02-6172
 STEVE BOGDAHN and BANA                              (D.C. No. CIV-01-1113-H)
 BOGDAHN, both individually and as                       (W.D. Oklahoma)
 parents and next friends of Blake
 Bogdahn, a minor,

          Defendants-Appellants.

                                ORDER AND JUDGMENT*

Before HENRY, BRISCOE and HARTZ, Circuit Judges.

      After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist 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.

      Steve and Bana Bogdahn appeal the district court’s entry of summary judgment in

      *
        This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
favor of American Economy Insurance Company. Pursuant to 10th Cir. R. 27.1 and Okla.

Stat. tit. 20, §§ 1601-11, we certified a question of state law to the Oklahoma Supreme

Court. That question has been answered and, exercising our jurisdiction pursuant to 28

U.S.C. § 1291, we affirm.

       Hillcrest Pharmacy, Inc., is a corporation with its principal place of business in

Woodward, Oklahoma. Since at least the late 1960s, Hillcrest Pharmacy has purchased

commercial liability insurance through Figley Salz & Co., Inc., a local insurance agency.

In 1990, Figley Salz began procuring insurance for Hillcrest Pharmacy from American

Economy. Shortly thereafter, the sole owner of Hillcrest Pharmacy, Lanny Duckett, sold

his interest in the corporation to the Bogdahns. The Bogdahns chose to continue

insurance coverage through American Economy.

       The policy issued by American Economy listed Hillcrest Pharmacy as the sole

“named insured” and listed the “form of business” as a “corporation.” App. at 50. The

policy stated that “[t]hroughout this policy the words ‘you’ and ‘your’ refer to the Named

Insured.” Id. at 52. In addition to providing liability coverage for Hillcrest Pharmacy’s

vehicles, the policy contained an endorsement providing uninsured motorist (UM)

coverage. That endorsement contained the following relevant provisions:

       A. COVERAGE
       We will pay, in accordance with Title 36, Oklahoma Statutes, all sums the
       “insured” is legally entitled to recover as compensatory damages from the
       owner or driver of an “uninsured motor vehicle.” The damages must result
       from “bodily injury” sustained by the “insured” caused by an “accident.”

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       B. WHO IS AN INSURED
       1. You.
       2. If you are an individual, any “family member.”
       3. Anyone else “occupying” a covered “auto” or a temporary substitute for
       a covered “auto.” The covered “auto” must be out of service because of its
       breakdown, repair, servicing, “loss” or destruction.
       4. Anyone for damages he or she is entitled to recover because of “bodily
       injury” sustained by another “insured.”

Id. at 71.

       On August 19, 2000, the Bogdahns’ minor son, Blake, was seriously injured when

he fell from the back of an all-terrain vehicle (ATV) driven by a friend, who was also a

minor. The ATV was owned by the friend’s parents and was apparently uninsured. The

Bogdahns, through their attorney, requested coverage for Blake’s injuries under the UM

provisions of the American Economy policy issued to Hillcrest Pharmacy. American

Economy denied coverage, concluding the ATV was not a covered vehicle under the

policy and that Blake was not an “insured” under the UM provisions of the policy.

       American Economy filed this diversity action seeking a declaration that it was not

required to provide coverage under the UM provisions of the policy for Blake’s injuries.

The Bogdahns filed a counterclaim seeking reformation of the policy in order “to comply

with the intentions and reasonable expectations of the parties.” App. at 15. Alternatively,

the Bogdahns asked that American Economy “be required to answer in negligence for all

damages resulting from its failure to obtain coverage as requested and reasonably

expected by” the Bogdahns and Hillcrest Pharmacy. Id.

       American Economy moved for summary judgment, arguing the Hillcrest Pharmacy

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policy did not provide UM coverage for Blake’s injuries, and that no ground for

reformation or evidence of constructive fraud or negligence existed which would require

that UM coverage be provided. In granting summary judgment in favor of American

Economy, the district court concluded that Blake was not an “insured” under the UM

provisions of the policy. Further, the court concluded there was no basis under Oklahoma

law for reforming the policy as requested by the Bogdahns.

       After initially reviewing the parties’ appellate pleadings, we certified the following

question to the Oklahoma Supreme Court:

             Whether Blake Bogdahn was a person insured under the uninsured
       motorist provisions of the American Economy policy issued to Hillcrest
       Pharmacy, Inc. as the named insured?

The Oklahoma Supreme Court rephrased the certified question into two questions:

              1. Is the definition of an insured in the UM endorsement of the
       American Economy policy issued to Hillcrest Pharmacy, Inc. ambiguous,
       such that the doctrine of reasonable expectations can be applied to define
       Blake Bogdahn as an insured?
              2. If so, does the statutorily mandated UM selection/rejection form
       create a reasonable expectation of coverage for Blake Bogdahn, such that
       the policy must be reformed to provide such coverage?

American Economy Ins. Co. v. Bogdahn, No. 99,392, 2004 WL 237423 at *1 (Okla. Feb.

10, 2004). In answer to the first question, the court concluded that the “definition of an

insured in the UM endorsement of the American Economy policy issued to Hillcrest

Pharmacy, Inc. is not ambiguous and therefore the doctrine of reasonable expectations

cannot be applied to define Blake Bogdahn as an insured.” Id. at *5. In light of this

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answer, the court found it unnecessary to address the second question.

       Reviewing the district court’s grant of summary judgment de novo, see Gwin v.

Awmiller, 354 F.3d 1211, 1215 (10th Cir. 2004), it is apparent that the district court’s

decision is consistent with the Oklahoma Supreme Court’s answer to our certified

question. Specifically, the district court correctly concluded that Blake Bogdahn was not

an “insured” under the UM provisions of the policy at the time he sustained his injuries

and, because the policy language was not ambiguous, there was no basis for reforming the

policy to provide coverage for his injuries. See Max True Plastering Co. v. U.S.F.&G.

Co., 912 P.2d 861, 864, 868 (Okla. 1996) (discussing the “reasonable expectations

doctrine” and noting reformation is available under the doctrine only when the coverage

language of a policy is ambiguous).

       AFFIRMED.

                                                         Entered for the Court

                                                         Mary Beck Briscoe
                                                         Circuit Judge

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