                                                                       F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                      UNITED STATES CO URT O F APPEALS
                                                                     September 15, 2006
                             FO R TH E TENTH CIRCUIT                Elisabeth A. Shumaker
                                                                        Clerk of Court

    STATE AUTO INSURANCE
    C OM PA N Y ,

              Plaintiff-Appellant,
                                                         No. 05-6333
     v.                                            (D.C. No. CIV-05-0259-F)
                                                         (W .D. Okla.)
    PA U L CLIFFO RD ; A +
    PRODUCTIO N PAIN TIN G, IN C.,

              Defendants-Appellees.



                             OR D ER AND JUDGM ENT *


Before B ROR B Y and EBEL, Circuit Judges, and KANE, ** District Judge.




          In this insurance coverage dispute, Plaintiff State Auto Insurance Company

(State Auto) appeals the district court’s grant of summary judgment in favor of



*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and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. 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.
**
      The Honorable John L. Kane, Senior District Judge, United States District
Court for the District of Colorado, sitting by designation.
Defendants Paul Clifford and A + Production Painting, Inc. (A+). W e exercise

jurisdiction under 28 U.S.C. § 1291 and affirm.

      On July 21, 2004, Paul Clifford, proprietor of A+, was operating a

motorcycle owned by himself and his ex-wife, Gina, when he was struck by

another vehicle operated by W esley Duty. Clifford sustained significant and

progressive injuries from the collision. Although Duty was deemed at fault, his

minimal insurance coverage was insufficient to satisfy Clifford’s claims.

Consequently, Clifford submitted an uninsured/underinsured motorist (U M ) claim

to State Auto under a commercial auto insurance policy issued to his business,

A+.

      State A uto ultimately denied the claim based on language in the policy’s

UM endorsement. 1 State A uto asserted that the endorsement excluded Clifford

from UM coverage because he was occupying a vehicle he owned at the time of




1
      The endorsement language at issue provides:

      The follow ing is added to W HO IS AN INSURED:

      Any individual named in the Schedule and his or her “family
      members” are “insured” while “occupying” or while a pedestrian
      when being struck by any “auto” you don’t own except:

      Any auto owned by that individual or by any “family member.”

Aplt. App. at 124.


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the collision. Thereafter, State Auto sought a declaratory judgment confirming

that it was not obligated to pay UM benefits under the terms of the endorsement.

      The district court reviewed the endorsement and concluded that it was

ambiguous because it was susceptible to at least two plausible meanings. Aplt.

App. at 195. The court further concluded that in light of the ambiguity, Clifford

had a reasonable expectation of coverage. Id. at 196. Accordingly, the district

court granted summary judgment in favor of Clifford and A+. Id.

      This appeal followed.

      In diversity cases, the substantive law of the forum state governs the

analysis of the underlying claims, but federal law controls the ultimate procedural

determination of the propriety of the district court’s grant of summary judgment.

Eck v. Parke, Davis & Co., 256 F.3d 1013, 1016 (10th Cir. 2001). Accordingly,

we apply Oklahoma law to the substantive issues on appeal, and we review the

district court’s grant of summary judgment de novo, Gwinn v. Awmiller, 354 F.3d

1211, 1215 (10th Cir. 2004).

      State Auto argues on appeal that the district court erred in finding the

endorsement ambiguous because it failed to apply the policy definitions to the

endorsement terms and read those terms in context. However, our review of the

district court’s order leads us to conclude that this argument is without merit.

First, the district court endeavored to parse the policy endorsement, but was left

“struggling to understand which phrases modify which objects in the

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[endorsement] as a whole.” Aplt. App. at 194. Next, the court attempted to read

the endorsement terms in context, but found that a lack of punctuation throughout

the endorsement made it “difficult to understand where phrases stop and start and

to what they pertain.” Id. Thereafter, the court applied the policy definition to

the word “you” as used in the endorsement, but found that doing so only

“complicat[ed] things even more” because other language in the endorsement and

the declarations page left room to question whether Clifford and his ex-wife w ere

“‘named insureds’ for purposes of this particular endorsement.” Id. at 195.

Hence, the court concluded that the policy is ambiguous because the endorsement

is susceptible to at least tw o plausible meanings. Id. Having thoroughly

reviewed the district court’s order, the parties’ briefs, the record on appeal, and

the pertinent law, we agree with the district court’s ruling and affirm for

substantially the same reasons as set forth in the district court’s order.

      State Auto also contends the district court erred in finding that the

endorsement’s ambiguity created a question of fact concerning the reasonableness

of Clifford’s expectation of coverage. This argument is also without merit.

Reasoning that the endorsement’s title, language, and the policy declarations page

made it reasonable to conclude that Clifford was a named insured for purposes of

the UM endorsement, the court determined that Clifford had a reasonable

expectation of coverage. Aplt. App. at 195-96. This holding is consistent with

Oklahoma law and policy governing insurance coverage disputes. M ax True

                                          -4-
Plastering Co. v. U.S. Fid. & Guar. Co., 912 P.2d 861, 865 (Okla. 1996)

(indicating “in cases of doubt, words of inclusion are liberally applied in favor of

the insured and words of exclusion are strictly construed against the insurer”).

Therefore, perceiving no error, we affirm the district court’s ruling for

substantially the same reasons as set forth in that court’s order.

      The judgment of the district court is AFFIRMED.

                                                     Entered for the Court


                                                     W ade Brorby
                                                     Circuit Judge




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