                                                                      F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                    UNITED STATES CO URT O F APPEALS
                                                                      June 15, 2007
                           FO R TH E TENTH CIRCUIT                 Elisabeth A. Shumaker
                                                                       Clerk of Court



    PAM ELA D ALPAOS-LAW RENCE,

               Plaintiff-Appellee,

    v.                                                 No. 06-7073
                                                (D.C. No. CIV-04-500-FHS)
    GUIDEONE AM ERICA INSURANCE                        (E.D. Okla.)
    COM PA NY, an Iowa corporation,

               Defendant-Appellant.



                            OR D ER AND JUDGM ENT *


Before L UC ER O, Circuit Judge, BROR BY, Senior Circuit Judge, and
M cCO NNELL, Circuit Judge.


         Defendant-appellant GuideOne America Insurance Co. (GuideOne), an

Iowa corporation, appeals from the district court’s grant of summary judgment to

plaintiff-appellee Pamela Dalpaos-Lawrence, a citizen of Oklahoma.

M s. Dalpaos-Lawrence claimed that GuideOne breached its insurance policy by




*
       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. 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not binding precedent, except under the doctrines of law of the case, res judicata,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 w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
refusing her coverage following a motorcycle accident. On appeal, GuideOne

argues that the district court erred in determining that M s. Dalpaos-Lawrence was

entitled to loss of income benefits under the policy and attorneys’ fees. W e

affirm.

                                          I.

      “W e review de novo the district court’s grant of summary judgment,

viewing the record in the light most favorable to the party opposing summary

judgment. Summary judgment is appropriate if there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law.”

S. Hospitality, Inc. v. Zurich Am . Ins. Co., 393 F.3d 1137, 1139 (10th Cir. 2004).

(citation omitted); Fed. R . C iv. P. 56(c). “Because this is a diversity case, we

rely on the substantive law of Oklahoma and apply federal procedural law.”

Ahrens v. Ford M otor Co., 340 F.3d 1142, 1145 (10th Cir. 2003).

                                          II.

      The relevant facts are essentially uncontested. M s. Dalpaos-Lawrence

married Bobby Dalpaos on November 19, 1997. In 2000, an automobile insurance

policy that was issued to M r. Dalpaos by Progressive Specialty Insurance Co.

through its insurance agent was “rolled over” into a similar insurance policy

provided by GuideOne. Renewal policies were evidently then issued every six

months thereafter. M r. Dalpaos and M s. Dalpaos-Lawrence lived together at

216 Creek Avenue in Hartshorne, Oklahoma, from 1996 until December 2001

                                          -2-
when they briefly separated. They reconciled in January 2002 before permanently

separating in February 2002.

      In June of 2002 a renewal automobile insurance policy with M r. Dalpaos as

the named insured was issued by GuideOne. The policy was effective from

June 17, 2002, until D ecember 17, 2002. Aplt. App., Vol. II at 428. On

November 10, 2002, M s. Dalpaos-Lawrence was involved in a motorcycle

accident in Oklahoma. She sustained numerous injuries including a broken leg,

was unable to work for approximately two years, and was unable to successfully

complete her job assignments when she returned to work in 2005. GuideOne

denied coverage under the policy and M s. Dalpaos sued.

      The issue before the district court was whether M s. Dalpaos-Lawrence was

covered by the “loss of income benefits coverage” added to the policy by an

“additional benefits endorsement.” Id., Vol. I at 135. The additional benefits

endorsement not only added loss of income benefits coverage to Part B of the

policy, it also provided in pertinent part that:

      “Insured” as used in this Part [B] means:

      1.     You or any “family member”;

             a.     W hile “occupying”; or

             b.     As a pedestrian when struck by:

             a motor vehicle designed for use mainly on public roads . . . .




                                           -3-
Id., Vol. I at 135. The term “family member” is defined in the policy as, in

pertinent part: “a person related to you by blood, marriage or adoption who is a

resident of ‘your’ household.” Id., Vol. I at 117. As used in the policy, the terms

“you” and “your” refer to “[t]he ‘named insured’ shown in the Declarations” and

“[t]he spouse if a resident of the same household.” Id. Even if the spouse is not a

resident of the same household as the named insured, coverage may be provided.

The policy also states:

      If the spouse ceases to be a resident of the same household during the
      policy period or prior to the inception of this policy, the spouse will
      be considered “you” and “your” under this policy but only until the
      earlier of:

      1.     The end of 90 days following the spouse’s change of
             residency;

      2.     The effective date of another policy listing the spouse as a
             named insured; or

      3.     the end of the policy period.

Id. The district court held that M s. Dalpaos-Lawrence was an “insured” for the

purposes of loss of income benefits coverage. It held that although

M s. Dalpaos-Lawrence was not a “family member” because she was not a resident

of M r. Dalpaos’s household, she did qualify as a “you” or “your” under the policy

and was therefore covered.




                                         -4-
      The district court also had to decide whether two exclusions in Part B of

the policy applied to the loss of income benefits coverage. Part B’s “exclusions”

section states, in pertinent part:

      W e do not provide M edical Payments Coverage for any “insured” for
      “bodily injury”:

             1.     Sustained while “occupying” any motorized
                    vehicle having few er than four wheels.

             ....

             5.     Sustained while “occupying,” or when struck by, any
                    vehicle (other than “your covered auto”) which is:

                    a.     Owned by you; or

                    b.     Furnished or available for your regular use. 1

Id., Vol. I at 121-22. The district court held that although the additional benefits

endorsement amended Part B of the policy, it made no change to the exclusions

section including the particular exclusions at issue. The exclusions, therefore,

continued to explicitly apply only to “M edical Payments Coverage.” The district

court awarded summary judgment and attorneys’ fees to M s. Dalpaos-Lawrence

and GuideOne filed its appeal. 2




1
       The motorcycle on which M s. Dalpaos-Lawrence was riding at the time of
the accident was not owned by her but was available for her regular use so it was
clear that if either exclusion applied, coverage would be denied.
2
      The parties stipulated to the dismissal of M s. Dalpaos-Lawrence’s bad faith
claim with prejudice.

                                          -5-
                                        III.

      GuideOne’s first argument is that the district court erred in determining

that M s. Dalpaos-Lawrence was a “you” under the policy and, therefore, was an

“insured” for purposes of loss of income benefits coverage. It argues that because

M s. Dalpaos-Lawrence ceased to be a resident of the same household as

M r. Dalpaos during the policy period that ended June 16, 2002, her coverage

would have ended either (1) sometime in M ay 2002 (at the end of 90 days

following the date in February 2002 that M r. Dalpaos moved out of the home at

216 Creek Avenue in Hartshorne, Oklahoma) or (2) on June 16, 2002 (the end of

the policy period).

                                         A.

      GuideOne first argues that M s. Dalpaos-Lawrence ceased to be an insured

sometime in M ay 2002, at the end of 90 days following the date in February 2002

that M r. Dalpaos moved out of the home at 216 Creek Avenue in Hartshorne,

Oklahoma. The policy states:

      If the spouse ceases to be a resident of the same household during the
      policy period or prior to the inception of this policy, the spouse will
      be considered “you” and “your” under this policy but only until the
      earlier of:

      1.     The end of 90 days following the spouse’s change of residency.

      2.     The effective date of another policy listing the spouse as a named

             insured; or



                                        -6-
      3.     the end of the policy period.

Aplt. App., Vol. I at 117. The district court first determined that this provision

was not ambiguous. It then held that the first of these three cutoffs did not apply

to M s. Dalpaos-Law rence because she (as the “spouse”) had not “changed” her

residence when her husband moved out.

      GuideOne agrees that the provision is not ambiguous, but argues that the

court misinterpreted the plain language of the provision. It argues that the district

court placed too much emphasis on the physical structure at 216 Creek Avenue

where the couple lived. GuideOne argues that the parties agree that M s. Dalpaos-

Lawrence “cease[d] to be a resident” of her husband’s “household” in February of

2002, and that if she was no longer a resident of her husband’s household she

must be considered a resident of some other “household.” GuideOne reasons that

M s. Dalpaos-Lawrence therefore experienced a “change in residency” no matter

who initiated that change. W e agree that this is one reasonable interpretation of

this policy provision.

      But we believe that the district court’s interpretation is also reasonable and

that the language of the policy provision is therefore ambiguous. W hether

language in an insurance policy is ambiguous is a question of law. Wynn v.

Avemco Ins. Co., 963 P.2d 572, 575 (Okla. 1998). This court has held that under

Oklahoma law “[t]he test to be applied in determining whether a word or phrase is

ambiguous is whether the word or phrase is susceptible to two interpretations on

                                          -7-
its face. The test is applied from the standpoint of a reasonably prudent lay

person, not from that of a lawyer.” Haberman v. Hartford Ins. Group, 443 F.3d

1257, 1265 (10th Cir. 2006) (citation and internal quotation marks omitted).

Although M r. Dalpaos and M s. Dalpaos-Lawrence were no longer members of the

same household after he moved out, this does not necessarily mean

M s. Dalpaos-Lawrence had a “change of residency” at that time. One is generally

a “resident” of a physical place such as a house, a city, or a state. The district

court’s determination that M s. Dalpaos-Lawrence’s “residency” did not change

because she continued to live at 216 Creek Avenue was also a reasonable

interpretation of the policy provision. Since the policy provision is susceptible to

two interpretations on its face, it is ambiguous.

      Oklahoma law recognizes that “insurance contracts are contracts of

adhesion because of the uneven bargaining position of the parties.” Spears v.

Shelter M ut. Ins. Co., 73 P.3d 865, 868 (Okla. 2003) (internal quotation marks

omitted). Further, for “many years” Oklahoma courts have applied the rule that

“in the event of ambiguity or conflict in the policy provisions, a policy of

insurance is to be construed strictly against the insurer and in favor of the

insured.” Id. As noted by both parties in this case, Oklahoma adopted the

“doctrine of reasonable expectations” in M ax True Plastering Co. v. United States

Fidelity & Guaranty Co., 912 P.2d 861, 864 (Okla. 1996). In that case the

Oklahoma Supreme Court stated that “[t]he standard under the doctrine is a

                                          -8-
‘reasonable expectation’; and courts must examine the policy language

objectively to determine whether an insured could reasonably have expected

coverage.” 912 P.2d at 865 (footnote call number omitted).

      Thus, the Oklahoma Supreme Court held in Spears that “[u]nder the

reasonable expectations doctrine, when construing an ambiguity or uncertainty in

an insurance policy, the meaning of the language is not what the drafter intended

it to mean, but what a reasonable person in the position of the insured would have

understood it to mean.” Spears, 73 P.3d at 868. It further held that it was:

      clear [from] M ax True Plastering Co. . . . that if an insurer desires to
      limit its liability under a policy, it must employ language that clearly
      and distinctly reveals its stated purpose. After M ax True Plastering
      Co., . . . unclear or obscure clauses in an insurance policy will not be
      permitted to defeat coverage which is objectively reasonably
      expected by a person in the position of the insured.

Id.

      Examining the ambiguous language of the policy’s definition of “you” and

“your” objectively, we hold that an insured could reasonably have expected that

the phrase “[t]he end of 90 days following the spouse’s change of residency,”

would only apply if the spouse and not the named insured moved. As recognized

by the district court, if GuideO ne had wanted to have made the language more

clear “it most certainly could have done so by simply phrasing the time frame as

90 days from ‘the spouse’s or named insured’s change of residency.’” Aplt. A pp.,

Vol. III at 741 n.6.



                                          -9-
                                          B.

      GuideOne’s next contention is that even if M s. Dalpaos-Lawrence did not

cease being an insured in M ay of 2002, coverage nevertheless ceased on June 16,

2002, because “[i]t was undisputed . . . that the insurance policy (in effect at the

time [M s. Dalpaos-Lawrence] ceased to be a resident of the same household as

[M r.] Dalpaos) had a policy period ending on June 16, 2002.” A plt. Opening Br.

at 26. The district court rejected this argument, holding that “[t]he insurance

policy was in effect from June 17, 2002, to December 17, 2002. Consequently,

the ‘end of the policy period’ as stated under the third time frame becomes

December 17, 2002.” Aplt. App., Vol. III at 741. The court further held that

“[b]ecause Defendant has chosen to reissue its policy at six-month intervals, new

policy periods are initiated and previous policy periods expire.” Id. at 741 n.7.

      GuideOne argues, citing Connecticut and M issouri state cases and a case

from this court applying Colorado law, that “[i]t is black-letter law that the

renewal of an insurance policy constitutes a separate contract to be governed by

general contract principals.” 3 Oklahoma courts have also held that “the renewal

of an insurance policy is a new contract.” Wynn v. Avemco Ins. Co., 963 P.2d



3
      W e recognize, however, that in Government Employees Insurance Co. v.
United States, the case cited by GuideOne, this court acknowledged that “[w]hen
a renewal policy is issued, it is presumed, unless a contrary intention appears, that
the parties intended to adopt in the renewal policy, the terms, conditions and
coverage of the expiring policies.” 400 F.2d 172, 175 (10th Cir. 1968) (internal
quotation marks omitted).

                                          -10-
572, 574 (O kla. 1998); see also Bowling v. Aetna Life Ins. Co., 55 P.2d 1023,

1025-26 (Okla. 1936) (citing with approval cases from other states holding that

accident policies are contracts for specific periods of time and that if they are

renewed, the renewal constituted a separate and independent contract). Oklahoma

courts have also spoken of renewal policies as being separate from original

policies. See Wynn, 963 P.2d at 574 (“[I]t is presumed, unless a contrary

intention appears, that the parties intended that the renewal policy cover the same

terms, conditions, and exceptions as the original policy.”) (internal quotation

marks omitted); Kirkpatrick v. Allstate Ins. Co., 859 P.2d 532 (Okla. Civ. App.

1993) (“W hen a renewal policy is delivered by the insurance company to the

insured upon expiration of a policy, without a request by the insured, it is merely

an offer or proposal which must be accepted by the insured before a contract of

insurance is effected.”).

      Consequently, we agree with the district court that the insurance policy at

issue was the renewal policy running from June 17, 2002, to December 17, 2002.

Since M s. Dalpaos-Lawrence ceased to be a resident of M r. Dalpaos’s household

prior to the inception of the renew al policy she w as considered a “you” or “your”

under the policy until the earliest of the three possible cutoffs. 4 In the case of the



4
       W e do not address whether our construction of the policy terms might lead
to an absurd result. GuideOne has not properly presented such an argument to
this court. See Anderson v. U.S. Dep’t of Labor, 422 F.3d 1155, 1174 (10th Cir.
2005) (“The failure to raise an issue in an opening brief waives that issue.”).

                                          -11-
third cutoff, the “end of the policy period” would be December 17, 2002. The

district court’s judgment with respect to this point is affirmed.

                                          IV.

      GuideOne’s final argument is that the exclusions found in Part B of the

policy applied to loss of income benefits coverage. GuideOne argues that because

the additional benefits endorsement changed the title of Part B from “M edical

Payments Coverage” to “M edical-Income Protection,” “all exclusions in that part

were applicable to claims for income protection coverage.” Aplt. Opening Br. at

32. W e affirm this point for the reasons set forth by the district court in its order

granting summary judgment. The endorsement made no change to the exclusions

section of Part B, leaving the exclusions applicable only to the “M edical

Payments Coverage” and not the added loss of income benefits coverage.

                                           V.

      As we have affirmed the district court’s rulings regarding GuideO ne’s

previous claims, we need not address its argument regarding the attorneys’ fee

aw ard. The judgment of the district court is AFFIRMED.


                                                      Entered for the Court


                                                      W ade Brorby
                                                      Senior Circuit Judge




                                          -12-
