SINCLAIR WYOMING REFINING COMPANY, Appellant (Plaintiff), v. INFRASSURE, LTD, Appellee (Defendant).
S-20-0114
IN THE SUPREME COURT, STATE OF WYOMING
May 10, 2021
2021 WY 65
APRIL TERM, A.D. 2021
W.R.A.P. 11 Certification
United States Court of Appeals for the Tenth Circuit
The Honorable Timothy M. Tymkovich, Chief Judge
Representing Appellant:
Jeffrey S. Pope and JoAnna S. DeWald* of Holland & Hart LLP, Cheyenne, Wyoming; Marc James Ayers of Bradley Arant Boult Cummings LLP, Birmingham, Alabama. Argument by Mr. Ayers.
Representing Appellee:
Jane M. Byrne, Guyon H. Knight, and Paul W. Hughes of McDermott Will & Emery LLP, New York, New York, and Washington, D.C.; Gregory C. Dykeman and Randall B. Reed of Long Reimer Winegar LLP, Cheyenne, Wyoming. Argument by Mr. Knight.
Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, JJ., and ROBINSON, D.J.
* Order Allowing Withdrawal of Counsel entered October 21, 2020.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] The United States Court of Appeals for the Tenth Circuit certified to this Court a question asking whether an insurance policy is “issued for delivery” or “delivered” under
CERTIFIED QUESTION
[¶2] Whether, under
FACTS
[¶3] In 2012, The Sinclair Companies, a parent company to Sinclair Wyoming Refining Company (Sinclair), entered into an “All Risks of Direct Physical Loss or Damage, Including Business Interruption” insurance policy (The Policy) through the London market covering risk for the calendar year 2013.1 The Sinclair Companies was listed as the “First Named Insured,” and had the sole authority under The Policy to, among other things, negotiate the terms of the policy and of the premiums payments and “to act on behalf of all insureds with respect to the negotiation and settlement of claims.” The Policy covered all-inclusive risks to “property located anywhere in the world.” Losses covered included those from flood, fire, earth movement, pollution clean-up, and covered losses to real and personal property, business interruption, royalties, and various other types. Sinclair and multiple other subsidiaries were listed separately as named insureds with policy coverage issued to each. Eighteen different insurance companies provided coverage for a percentage of any loss suffered by Sinclair and its subsidiaries. Infrassure, LTD (Infrassure), a Swiss company, was one of the eighteen insurers that provided coverage under The Policy and was severally liable for seven and one-half percent (7.5%) of any covered loss.
Notes
[¶4] Both Sinclair and The Sinclair Companies are Wyoming corporations. The Policy lists only one address for the “FIRST NAMED INSURED AND OTHER NAMED INSUREDS” :
The Sinclair Companies
c/o Risk Manager
550 East South Temple
Salt Lake City, Utah 84102
[¶5] It is not known whether the original or any copies of The Policy were physically or electronically delivered, and if so, to what address delivery was made. The certified question does state, and our answer presumes, no delivery, physically or electronically, was made to Wyoming.
[¶6] Paragraph 53 of The Policy includes a “MULTIPLE INSUREDS’ CLAUSE”:
It is noted and agreed that, if the Insured comprises more than one insured party each operating as a separate and distinct entity then, (save as described in this Multiple Insureds’ Clause), cover[age] hereunder shall apply in the same manner, and to the same extent, as if individual policies had been issued to each such insured party, provided that the total liability of the Insurers to all of the insured parties collectively shall not exceed the Policy Limit of Liability, including any Aggregate Limits of Liability and Limits of Liability.
[¶7] In 2013, the Sinclair Wyoming petroleum refinery located in Sinclair, Wyoming suffered a fire and explosion. After extended negotiations spanning twenty months, all insurers except Infrassure settled with Sinclair based on a negotiated payment resolution. Infrassure did not settle because it disagreed with how business interruption losses were calculated.
[¶8] Sinclair filed suit against Infrassure in the United States District Court for the District of Wyoming. One of Sinclair’s claims was for attorney fees pursuant to
In any actions or proceedings commenced against any insurance company on any insurance policy or certificate of any type or kind of insurance, or in any case where an insurer is obligated by a liability insurance policy to defend any suit or claim or pay any judgment on behalf of a named insured, if it is determined that the company refuses to pay the full amount of a loss covered by the policy and that the refusal is
unreasonable or without cause, any court in which judgment is rendered for a claimant may also award a reasonable sum as an attorney’s fee and interest at ten percent (10%) per year.
[¶9] Infrassure sought dismissal of this claim under Federal Rule of Civil Procedure 12(b)(6), arguing Sinclair could not obtain relief under
STANDARD OF REVIEW
[¶10] Certified questions are governed by W.R.A.P. 11. When there is no controlling precedent to a question of law, Rule 11.01 allows this Court to answer pure questions of law “‘which may be determinative of the cause’ pending in the certifying court.” Preston v. Marathon Oil Co., 2012 WY 66, ¶ 4, 277 P.3d 81, 83 (Wyo. 2012). The role of this Court in answering a certified question does not include fact finding. B & W Glass, Inc. v. Weather Shield Mfg., Inc., 829 P.2d 809, 812 (Wyo. 1992). Certainty of facts is not required to answer a pure question of law. Id. The certified question presently before the Court is an issue of statutory interpretation. Questions of statutory interpretation are subject to a de novo review. Phoenix Vintners, LLC v. Noble, 2018 WY 87, ¶ 10, 423 P.3d 309, 312 (Wyo. 2018) (citing Brock v. State ex. Rel. Wyoming Workforce Servs., Unemployment Ins. Div., 2017 WY 47, ¶ 7, 394 P.3d 460, 462 (Wyo. 2017)).
DISCUSSION
[¶11] This Court has not addressed whether an insurance contract is “delivered” or “issued for delivery” if actual delivery of the contract does not occur in Wyoming. The applicable statute is
(a) This chapter applies to all insurance contracts and annuity contracts except:
(i) Reinsurance;
(ii) Policies or contracts not issued for delivery in this state nor delivered in this state;
(iii) Wet marine and transportation insurance.
[¶12] The primary objective in statutory interpretation “is to give effect to the legislature’s intent.” Cheyenne Newspapers, Inc. v. Bd. of Trustees of Laramie Cnty. Sch. Dist. No. One, 2016 WY 113, ¶ 10, 384 P.3d 679, 682 (Wyo. 2016) (quoting Nicodemus v. Lampert, 2014 WY 135 ¶ 13, 336 P.3d 671, 674 (Wyo. 2014)). This Court’s longstanding method of statutory interpretation begins by first determining if the statute in question is “clear and unambiguous” or “ambiguous or subject to varying interpretations.” Ultra Resources, Inc. v. Hartman, 2010 WY 36, ¶ 69, 226 P.3d 889, 916 (Wyo. 2010). “Clear and unambiguous” language is wording “reasonable persons” would agree as to its meaning. Id.; Parker Land and Cattle Co. v. Wyoming Game and Fish Comm’n, 845 P.2d 1040, 1043 (Wyo. 1993) (citations omitted). When a statute is clear and unambiguous, the statute’s plain language is given effect. Ultra Resources, ¶ 69, 226 P.3d at 916; Parker Land, 845 P.2d at 1043 (citations omitted). Reliance on dictionary definitions to explain “plain and ordinary” language often results. Belle Fourche Pipeline Co. v. State, 766 P.2d 537, 542 (Wyo. 1988). Yet when a statute includes words or phrases that are technical or “terms of art,” such language is given its technical meaning unless a different intent is expressed by the legislature. Powder River Coal Co. v. Wyoming Dep’t of Revenue, 2006 WY 137, ¶ 16, 145 P.3d 442, 448 (Wyo. 2006). See also Huffman v. Caterpillar Tractor Co., 908 F.2d 1470, 1476 (10th Cir. 1990).
[¶13] Determining whether a statute is unambiguous or ambiguous is a matter of law. Taylor v. State ex rel. Wyoming Workers’ Safety and Comp. Div., 2003 WY 83, ¶ 10, 72 P.3d 799, 802 (Wyo. 2003).
When the words used are clear and unambiguous, a court risks an impermissible substitution of its own views, or those of others, for the intent of the legislature if any effort is made to interpret or construe statutes on any basis other than the language invoked by the legislature. . . . If the language selected by the legislature is sufficiently definitive, that language establishes the rule of law. . . . This inhibition upon statutory construction offers assurance that the legislative efforts and determinations of elected representatives will be made effective without judicial adjustment or gloss.
Id. (quoting State ex rel. Dept. of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶ 16, 18 P.3d 1182, 1187 (Wyo. 2001) (quoting Allied-Signal, Inc. v. Wyoming State Bd. of Equalization, 813 P.2d 214, 219 (Wyo. 1991))).
[¶14] A statute is to “be construed as a whole” to ascertain its purpose and intent, as well as to determine “the meaning of each part.” Parker Land, 845 P.2d at 1042 (quoting Ross v. Trustees of University of Wyoming, 31 Wyo. 464, 489, 228 P. 642, 651 (1924); accord, City of Laramie v. Facer, 814 P.2d 268, 270 (Wyo. 1991)). Each “word, clause and sentence” is given effect, and all components of the statute are construed “in pari materia.”
Parker Land, 845 P.2d at 1042 (quoting Facer, 814 P.2d at 270); accord, State ex rel. Albany Cnty. Weed & Pest Dist. v. Bd. of Cnty. Comm’rs of Albany Cnty., 592 P.2d 1154, 1157 (Wyo. 1979). “[S]tatutes should be considered in pari materia as part of the process of determining whether they are ambiguous, and not just as part of the process of determining their meaning once they have been found to be ambiguous.” Mountain Cement Co. v. South of Laramie Water & Sewer Dist., 2011 WY 81, ¶ 40, 255 P.3d 881, 896 (Wyo. 2011). A statute is ambiguous only when “it is vague or uncertain and subject to varying interpretations,” or if a certain meaning would be inconsistent with other statutes or other portions of the same statute, taken in pari materia. Id. ¶ 40, 255 P.3d at 897.
[¶15] The words “delivered” or “issued for delivery” are repeated in the Wyoming Insurance Code numerous times, but the Wyoming State Legislature has not defined the terms. Both parties assert
[¶16] We conclude the statute clearly and unambiguously provides that an insurance contract is issued for delivery in Wyoming if the policy issued is intended to protect an insured in Wyoming against risks in Wyoming. The plain meaning of the terms “delivery” and “issue,” as well as the overall purpose of the Wyoming Insurance Code, support this meaning.
[¶17] Statutory analysis begins with the plain meaning of the terms. Black’s Law Dictionary (11th ed. 2019) defines delivery as “[t]he formal act of voluntarily transferring something.” In the context of insurance law, it is commonly accepted that the word “delivered” or “delivery” is to be “understood flexibly” and does not require physical delivery of the insurance policy. Jorgenson Forge Corp. v. Illinois Union Ins. Co., No. 2:13-CV-01458-BJR, 2014 WL 12103362, *3 (W.D. Wash. June 17, 2014) (citing Frye v. Prudential Ins. Co. of America, 288 P. 262, 263 (Wash. 1930)). Instead, delivery of an insurance policy may be made by actual or constructive delivery of the policy. This Court recognized constructive delivery of an insurance policy many years ago, related to an assignment of a life insurance policy:
In Couch, Cyc. of Ins. Law, vol. 6, p. 5228, it is said: “In order to effect a valid assignment there must be either an actual
or constructive delivery of the policy to the assignee, actual delivery of an assigned policy by the insured to the assignee not being essential to the validity of the assignment, since an actual bona fide assignment effects a constructive delivery, which is equal in insurance law to an actual manual delivery. . . . In other words, an assignment may be valid even though there is no actual delivery thereof (of the policy) to the assignee.”
Montgomery v. Locomotive Engineers’ Mut. Life & Accident Ins. Ass’n., 47 Wyo. 86, 31 P.2d 71, 73 (1934). See also Wanshura v. State Farm Life Ins., 275 N.W.2d 559, 564 (Minn. 1978) (“In general, constructive delivery, by the insurer, exists when the insurance company has manifested its assent to be bound finally on the policy.”).
[¶18] There is much emphasis placed on whether The Policy was constructively delivered to Sinclair, as opposed to whether The Policy was delivered or issued for delivery in Wyoming. There is no doubt from the certified question posed to this Court, and this Court accepts as true, that either actual or constructive delivery of The Policy was made to Sinclair. This does not answer the question. The decisive question before the Court is whether The Policy was delivered or issued for delivery in Wyoming.
[¶19] Webster’s Dictionary states “issue” means “to send out; to put into circulation; as to issue money from a treasury or notes from a bank[;] [t]o send out, to deliver from authority; as to issue and order from the department of war; to issue a writ[;] [or t]o deliver for use; as to issue provisions from a store. Issue, Webster’s Twentieth-Century Dictionary Unabridged (1938). Black’s Law Dictionary defines “issue” in relevant part as: “[t]o put forth officially[.]” Issue, Black’s Law Dictionary (11th ed. 2019). In considering the definitions of “delivery” and “issue,” the legislature intended for Chapter 15, including the attorney fee shifting provision in
[¶20] This interpretation serves the longstanding purpose of the Wyoming Insurance Code. In 1943, this Court discussed the public interest and policy behind insurance law:
[I]t must be constantly kept in mind that “it is now generally recognized that the business of insurance is one that is affected with a public interest, and that it is a proper subject of regulation and control by the state by virtue of the exercise of its police power in the interest of public convenience and the general good of the people.”
Farmers Automobile Inter-Insurance Exchange v. MacDonald, 59 Wyo. 352, 140 P.2d 905, 911 (1943) (quoting 29 Am.Jur. 59, 60, § 22, and Merchants’ Mut. Automobile
Liability Ins. Co. v. Smart, 267 U.S. 126, 129, 45 S.Ct. 320, 69 L.Ed. 538 (1925)). See also Herrig v. Herrig, 844 P.2d 487, 495 (Wyo. 1992) (the public policy for
[¶21] The legislative intent to protect the public in insurance matters is evident in subsequent laws. See, e.g.,
[¶22] To withhold the protections of Chapter 15 from Wyoming businesses insuring risks in Wyoming simply because the address listed on the policy is in a different state is nonsensical. Such an interpretation would not protect Wyoming residents insuring risks located in Wyoming if an insurance contract was delivered outside of Wyoming, yet would offer protection to foreign residents for risks located outside of Wyoming if an insurance contract was delivered to a location in Wyoming. This interpretation would be inconsistent with Chapter 15 generally, as well as the other provisions given in
[¶23] Reading the Insurance Code as a whole and considering the history of the Insurance Code’s former and current provisions, the Wyoming legislature’s primary purpose regarding insurance law remains what it has always been: to “regulate [insurance companies’] affairs, so far, at least, as to prevent them from committing wrongs or injustice in the exercise of their corporate functions.” Farmers Automobile Inter-Insurance Exchange, 140 P.2d at 911.
[¶24] Finally, in determining the meaning of the phrase “not issued for delivery in this state nor delivered in this state” contained in
[¶25] The New York Supreme Court Appellate Division adopted a liberal interpretation of “issued for delivery” in American Ref-Fuel Co. of Hempstead v. Employers Ins. Co. of Wausau, 265 A.D.2d 49 (N.Y. App. Div., 2000). In American Ref-Fuel Co., the underlying facts were:
The plaintiff, American Ref-Fuel Company of Hempstead, operated the municipal incinerator for the Town of Hempstead. The defendant, Employers Insurance Company of Wausau
(hereinafter Wausau), with a home office in Wausau, Wisconsin, delivered two insurance policies to the plaintiff‘s parent corporation in Houston, Texas, for the policy period of January 1, 1995 until January 1, 1996. One policy was a commercial general liability policy, and the other policy a commercial umbrella liability policy. Each policy listed, as a named insured, American Ref-Fuel Company of Hempstead, located in Westbury, New York. The commercial general liability policy covered bodily injury or property damage in the policy period caused by an “occurrence.” “Occurrence” was defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The umbrella policy covered “those sums that the insured becomes legally obligated to pay as damages in excess of the ‘underlying limit‘” of the primary policy. Each policy contained a “pollution exclusion.”
The underlying action was brought by an employee of the Town of Brookhaven who was required to work in a portion of the Town of Brookhaven landfill that was used as a depository for, among other things, ash produced from the municipal incinerator operated by the plaintiff. The employee alleged that he sustained bodily injury from the plaintiff‘s allegedly negligent processing of the ash. He claimed that the plaintiff failed to add sufficient moisture to the ash, allowing it to become “airborne in or about the area” where he was required to work. He sued both the plaintiff and the Town of Hempstead.
Id. at 50-51. In 2000, New York Insurance Law § 3420(d) required insurance disclaimers be timely noticed. Id. at 51. For this subsection to be applicable to the insurance policy in question, Insurance Law § 3420(a) required insurance policies be “delivered or issued for delivery in [New York] for death or bodily injury arising out of an accident occurring within [New York].” Id. at 51-52. The defendant claimed Insurance Law § 3420 (d) did not apply because the insurance policies were not “delivered or issued for delivery” in New York. Id. at 53. The defendant argued the policies had instead been delivered in Texas because they were physically delivered to a parent corporation in Texas and “because . . . all premium invoices were sent to the parent corporation, and the policies were countersigned by the defendant’s authorized agent in Texas.” Id. The New York court disagreed:
In the instant case, on the other hand, the policies listed, as a named insured, the plaintiff, which is a New York corporation
located in and performing work in New York. The fact that the policies also covered other corporations operating in other States and the happenstance that the policies were countersigned and actually delivered in another State is not determinative. Rather, the location of the insured and the risk to be insured are determinative (see, Amarnick v Automobile Ins. Co., 643 So 2d 1130 [Fla]; East Coast Ins. Co. v Cooper, 415 So 2d 1323 [Fla]; Zurich Ins. Co. v Travelers Indem. Co., 184 AD2d 454, 461 [Sullivan, J. P., dissenting], mod 81 NY2d 938 on dissenting mem of Sullivan, J. P.).
American Ref-Fuel, 265 A.D.2d at 53 (emphasis added).
[¶26] New York’s rule, that an insurance policy is “delivered” or “issued for delivery” in New York if the policy “covers both insureds and risks located in” New York, was stated again in Preserver Ins. Co. v. Ryba, 893 N.E.2d 97, 100 (N.Y. 2008). Even after New York modified its statutory language to apply to insurance policies “issued or delivered” in New York, it continued to apply the same rule, “conclud[ing] that the term ‘issued or delivered’. . . encompasses situations where both insureds and risks are located” in New York. Carlson v. American Intern. Group, Inc., 89 N.E.3d. 490, 503 (N.Y. 2017).
[¶27] Courts in at least three other states have concluded similar to New York that insurance contracts are “delivered” or “issued for delivery” in the state where both the insured and covered risk are located, so long as the insurer is aware of such. See Taylor v. Tennessee Farmer’s Mut. Ins. Co., 659 So.2d 30, 31-32 (Ala. 1995) (holding that when an insurance company is aware its insured moved to Alabama and the insured vehicle was primarily garaged in Alabama, but the policy was mailed to a prior residence in Tennessee, the policy was “delivered or issued for delivery” in Alabama); Blue Cross of Florida, Inc. v. Turner, 363 So.2d 133, 135 (Fla. Dist.Ct. App. 1978) (holding that when a life insurance policy was not physically delivered to Florida, but a master policy was physically delivered to a Florida insurance office, the insured was a resident of Florida, employed in Florida, received a certificate in Florida, and paid premiums in Florida, the insurance policy was “issued for delivery or delivered in” Florida); Rungee v. Allied Van Lines, Inc. 449 P.2d 378, 381-82 (Idaho 1968) (finding the Idaho legislature intended to protect Idaho residents “by regulating the insurance issued in their behalf,” and that Idaho Insurance Code § 41-1801(2), which “applies as to all insurance contracts . . . other than . . . policies or contracts not issued for delivery in this state nor delivered in this state” was applicable to an insurance policy delivered in Florida insuring household goods delivered to an insured changing residence to Idaho, when the goods were delivered in Idaho because the insurance policy was “issued for delivery or delivered in Idaho”).
[¶28] Some federal courts interpreting state laws have come to similar conclusions.2 Other federal courts give a stricter interpretation of state insurance code provisions including the language “delivered” or “issued for delivery,” and find the language means the location an insurance contract is actually delivered.3 In Lexington Insurance Company v. Precision Drilling Company, L.P., 951 F.3d 1185, 1197 (10th Cir. 2020), the Tenth Circuit affirmed the lower court’s decision denying attorney fees pursuant to
Addressing the merits of the issue, we agree with Lexington that Precision obtains no relief from
§ 26-15-124 . Section26-15-101 lays out the scope of Wyoming’s insurance code. This statute allows prejudgment interest and attorneys’ fees for “all insurance contracts and annuity contracts except: . . . (ii) Policies or contracts not issued for delivery in this state nor
delivered in this state[.]” Id. . . . The Lexington policies were issued in Texas, so the Wyoming insurance code, including
§ 26-15-124 , is inapplicable.
Id. at 1197. What is not clear from the Lexington decision is where Precision, the insured company, was located. It is also not clear if the Tenth Circuit would have decided differently if both the insured risk and the insured were located in Wyoming. Moreover, there was no controlling Wyoming caselaw on this issue when the Tenth Circuit decided Lexington. See, e.g., Kaufman v. Higgs, 697 F.3d 1297, 1301 (10th Cir. 2012); Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665-66 (10th Cir. 2007).
[¶29] The decisions applying a stricter definition of “delivered” or “issued for delivery” are based on facts that are either unclear, or only met one of the two New York rule’s requirements. These decisions are not necessarily inconsistent with the New York rule and are, in any event, distinguishable. The New York rule is consistent with the plain language of
CONCLUSION
[¶30] For purposes of
[¶31] For the above-mentioned reasons, the certified question is answered in the affirmative. Pursuant to