United States District Court, W.D. Oklahoma
L. RUSSELL UNITED STATES DISTRICT JUDGE
has filed a Motion for Summary Judgment (Doc. No. 17) and
Plaintiff has responded in opposition thereto (Doc. No. 24).
Defendant also filed a Reply in support of its position.
(Doc. No. 17). Having considered the parties'
submissions, the Court finds as follows.
judgment is appropriate “when there is no genuine issue
as to any material fact and the moving party is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a).
Where, as here, the moving party has the burden of proof, a
more stringent summary judgment standard applies. Thus, if
the moving party bears the burden of proof, to obtain summary
judgment, it cannot force the nonmoving party to come forward
with “specific facts showing there [is] a genuine issue
for trial” merely by pointing to parts of the record
that it believes illustrate the absence of a genuine issue of
material fact. Mudrick v. Cross Services, Inc., 200
Fed.Appx. 338, 340 (5th Cir.2006) (citing Celotex v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986)). Rather, it must establish, as a matter of law,
all essential elements of the issue before the nonmoving
party can be obligated to bring forward any specific facts
alleged to rebut the movant's case. Id.. In
performing the summary judgment analysis, the factual record
and any reasonable inferences therefrom are construed in the
light most favorable to the non-moving party. Id.
2011, MTI completed an annual inspection of a cooling tower
operated by Western Farmers Electrical Cooperative. As a
result of its inspection, MTI submitted a bid to Western
Farmers to perform certain maintenance on the Cooling Tower,
to undertake repairs identified as necessary during the
inspection. The April 28, 2011 Scope of Work stated:
Unit I Tower Anchors Throughout the entire basin,
install new 304 SS anchor castings. Included will be 304SS
anchor bolts and Hilti anchor adhesive.
Unit I Louvers On four (4) cells, remove existing
louvers and install a (3) row louver system.New louvers will
consist of 12oz. 4.2” corrugated FRP panels supported
on 2”x4” Douglas Fir supports. Included will be
new polypropylene support arms. Also included will be all
necessary 304 stainless steel hardware.
cooling tower's original construction was a wooden frame
with bolted connections including vertical columns and
diagonal braces; it measured 50 feet wide, by 150 feet long
by 70 feet tall. The tower was anchored to a concrete
foundation of a sump pit by 64 anchor bolts.
23, 2011, as part of its work on the cooling tower, Plaintiff
MTI removed the sixty-four anchor bolts from the base,
breaking them to pieces to extricate them from the concrete.
At that time MTI did not have access to the gun necessary to
insert the epoxy adhesive identified in the Scope of Work
into the concrete, which was intended to hold the replacement
bolts in place. As a result, no new bolts were installed on
May 23, 2011. On May 24, 2011, still lacking access to the
tools, MTI continued work without replacing the bolts. On May
25, 2011, MTI personnel arrived at the facility and
discovered the tower leaning, having been damaged by high
winds overnight. MTI employees used forklifts to brace the
tower to prevent a total collapse of the structure. Plaintiff
admits that the wind caused damage to the cooling tower
because it had removed the bolts and no temporary bracing was
used to ensure stability of the structure. Farmers Electric
concluded the damage to the cooling tower was so extensive
that replacing the unit was the better course than attempting
repair. MTI paid Farmers Electric $350, 000 to
settle the Cooperative's claims against MTI. MTI seeks to
recoup this amount from Defendant Wausau pursuant to a policy
of insurance in place on the date of the accident.
seeks summary judgment on Plaintiff's sole claim, breach
of contract, asserting that under exclusion j(5), j(6), or
both, there is no coverage. Plaintiff contends Defendant has
not met its burden of establishing that either exclusion
applies, and therefore, it is not entitled to summary
judgment. Plaintiff further contends the Court should find
the exclusions ambiguous and construe them against Defendant,
a diversity case requiring the Court to construe disputed
terms of an insurance policy as required by state law.
See Zurich American Ins. Co. v. O'Hara Reg'l Ctr.
for Rehabilitation, 529 F.3d 916, 920 (10th Cir. 2008).
The parties do not dispute that Oklahoma substantive law
governs the interpretation of the Policy. Under Oklahoma law,
an insurance contract should be construed according to the
terms set out within the four corners of the document.
First American Kickapoo Operations, L.L.C. v. Multimedia
Games, Inc., 412 F.3d 1166, 1173 (10th Cir. 2005).
“The construction of a policy should be natural and
reasonable, viewed in the light of common sense. The result
should not be absurd.” Redcorn v. State Farm Fire
& Casualty Co., 55 P.3d 1017, 1019 (Okla.2002)
(citation omitted). If the terms of the contract are
“unambiguous, clear and consistent, they are to be
accepted in their ordinary sense and enforced to carry out
the expressed intention of the parties.” Roads
West, Inc. v. Austin, 91 P.3d 81, 88 (Okla.Civ.App.
2004). The Court should not create an ambiguity in a policy
by “using a forced or strained construction, by taking
a provision out of context, or by narrowly focusing on a
provision.” Wynn v. Avemco Ins. Co., 963 P.2d
572, 575 (Okla. 1998). A policy term will be considered
ambiguous only if it is susceptible to more than one
reasonable interpretation. Max True Plastering Co. v.
U.S. Fidelity & Guar. Co., 912 P.2d 861, 869 (Okla.
1996). Additionally, “[a]n insurance contract is
considered a contract of adhesion in Oklahoma, and is
construed in favor of the insured when ambiguity remains
after applying the rules of construction.” Mansur
v. PFL Life Ins. Co., 589 F.3d 1315, 1319 (10th
Cir.2009) (citing Dodson v. St. Paul Ins. Co., 812
P.2d 372, 376 (Okla.1991)). “The interpretation of an
insurance contract and whether it is ambiguous is a matter of
law for the Court to determine and resolve
accordingly.” Dodson, 812 P.2d at 376.
Finally, a basic tenet of insurance law provides that the
insured has the burden of showing a covered loss, while the
insurer has the burden of showing that a loss falls within an
exclusionary clause of the policy.” See McGee v.
Equicor-Equitable HCA Corp., 953 F.2d 1192, 1205
(10th Cir. 1992); Pitman v. Blue Cross
& Blue Shield of Okla., 217 F.3d 1291, 1298
(10th Cir. 2000); Fehring v. Universal Fidelity Life Ins.
Co., 721 P.2d 796, 799 (Okla.1986) (holding that insurer
failed to sustain burden of proving loss came within scope of
motion is premised on the applicability of two exclusions
contained in the Policy. In footnote 3 at pages 15-16 of its
brief in support of the motion, Defendant makes a
half-hearted attempt at challenging the existence of coverage
by arguing that Plaintiff has not established an
“occurrence” as required to give rise to coverage
because MTI's negligence caused the loss. The Court will
not consider this argument, limiting its consideration to the
issue of whether, assuming an occurrence and coverage under
the Policy, Wausau has met its burden of establishing no
genuine issues of material fact and the applicability of an
exclusion under either provision j(5) or j(6) of the
Policy at issue herein provides that insurer will “pay
those sums that the insured becomes legally obligated to pay
as damages because of ‘bodily injury' or
‘property damage' to which this insurance
applies.” Policy, Section (I)(A)(1)(a). The Policy
applies only if the “property damage” is
“caused by an ‘occurrence' that takes place
in the ‘coverage territory.'” Id.,
Section I, (b)(1). The Policy contains certain exclusions,
including the following:
This insurance does not apply to: . . .
j. Damage to Property “Property