                  United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 12-1221
                         ___________________________

                    Argonaut Great Central Insurance Company

                        lllllllllllllllllllll Plaintiff - Appellant

                                            v.

                                  Jerry Casey, et al.

                       lllllllllllllllllllll Defendants - Appellees

                                    ____________

                     Appeal from United States District Court
                 for the Eastern District of Arkansas - Little Rock
                                  ____________

                           Submitted: September 19, 2012
                             Filed: November 13, 2012
                                  ____________

Before WOLLMAN, BEAM, and LOKEN, Circuit Judges.
                          ____________

LOKEN, Circuit Judge.

      A bus owned by the First Baptist Church of Bentonville (the “Church”) was
involved in a single-vehicle accident caused by the driver’s negligence, resulting in
two fatalities and scores of serious injuries. At the time of the accident, the Church
was insured by two policies issued by Argonaut Great Central Insurance Company
(“Argonaut”), a Commercial Auto Policy (the “Policy”) providing $1 million liability
insurance and $1 million uninsured and underinsured motorist (“UIM”) insurance --
the subject of this appeal -- and a Commercial Umbrella Policy providing an
additional $1 million excess coverage for auto accidents.

       Recognizing that personal injury claims would greatly exceed the policies’
combined coverages, Argonaut commenced this diversity interpleader action, naming
known claimants as defendants and seeking to deposit $2 million into the court’s
registry, $1 million for the combined limits under the Policy, and $1 million for the
Umbrella Policy’s limit. The claimants asserted counterclaims against Argonaut
pursuant to Ark. Code Ann. § 23-79-210,1 alleging that the Policy limits include an
additional $1 million. The district court2 granted summary judgment for the
claimants, ordered Argonaut to pay $2 million under the Policy into the court’s
registry (plus an additional $1 million under the Umbrella Policy), and directed entry
of final judgment pursuant to Fed. R. Civ. P. 54(b), permitting immediate appeal of
this issue. Argonaut appeals, arguing the Policy unambiguously precludes
aggregating its liability and UIM coverages. Reviewing the grant of summary
judgment and the interpretation of the Policy de novo, and applying Arkansas law, we
affirm. See Ark. Power & Light Co. v. Hartford Steam Boiler Inspection & Ins. Co.,
257 F.3d 853, 856 (8th Cir. 2001) (standard of review).

      It is undisputed that the Policy provided the claimants both liability and UIM
coverages -- liability coverage because they are tort victims of the Church’s agent, and
UIM coverage because they are insured parties injured by a negligent driver (again,
the Church’s agent) whose insurance coverage was less than the sum of their claims.
The district court held that the Policy unambiguously allows aggregate recovery of the


      1
         Under Arkansas law, the Church as a charitable institution is immune from tort
liability. See Anglin v. Johnson Reg’l Med. Ctr., 289 S.W.3d 28, 31-32 (Ark. 2008).
      2
        The Honorable Brian S. Miller, United States District Judge for the Eastern
District of Arkansas.

                                          -2-
limits of both coverages. Though the parties have briefed and argued other issues, we
address only the issue decided by the district court.

       As is common, the Policy is an amalgam of interrelated documents. The
declarations page is captioned Commercial Auto Coverage Part, distinguishing it, for
example, from Argonaut’s Commercial General Liability Coverage Part. Within the
Commercial Auto Coverage Part, Argonaut offers at least four “Coverage Forms” of
commercial auto insurance: the Business Auto Coverage Form, the Garage Coverage
Form, the Motor Carriers Coverage Form, and the Truckers Coverage Form. The
Policy includes a Business Auto Coverage Form, which sets forth liability and
physical damage coverages in Sections II and III, the Business Auto Conditions in
Section IV, Definitions in Section V, and a page of Common Policy Conditions that
apply to all Coverage Parts. The Policy then includes attached “endorsements” that
add various coverages, exclusions, and provisions mandated by the governing
insurance laws of a particular State. At issue here are the liability coverage provided
in Section II of the Business Auto Coverage Form and the UIM coverage provided in
the Arkansas Uninsured and Underinsured Motorists Coverage endorsement.

       Argonaut argues that three provisions limit the claimants’ recovery to the higher
of either the liability or the UIM coverage, that is, to $1 million: (1) the “Two or More
Coverage Forms or Policies Issued by Us” provision in the Business Auto Coverage
Form, (2) the “Limit of Insurance” provisions in the Business Auto Coverage Form
and the UIM endorsement, and (3) the “Other Insurance” provision in the Business
Auto Coverage Form as modified by the UIM endorsement. Our task in construing
these provisions under Arkansas law is a well-traveled road:

      The law regarding construction of an insurance contract is well settled.
      If the language of the policy is unambiguous, we will give effect to the
      plain language of the policy without resorting to the rules of
      construction. On the other hand, if the language is ambiguous, we will
      construe the policy liberally in favor of the insured and strictly against

                                          -3-
      the insurer. Language is ambiguous if there is doubt or uncertainty as to
      its meaning and it is fairly susceptible to more than one reasonable
      interpretation.

Elam v. First Unum Life Ins. Co., 57 S.W.3d 165, 169 (Ark. 2001).

       Before discussing the three provisions on which Argonaut relies, we think it is
critical to examine the “Coverage” section of the UIM endorsement, which the parties
either ignored or overlooked:

      A. Coverage

        1.   We will pay all sums the “insured” is legally entitled to recover as
             compensatory damages from the . . . driver of . . . an
             “underinsured motor vehicle”. . . .

        2.   With respect to damages resulting from an “accident” with an
             “underinsured motor vehicle,” we will pay under coverage only if
             a. or b. below applies:

             a. The limit of any applicable liability . . . policies have been
                exhausted by payment of judgments or settlements; or

             b. A tentative settlement has been made . . . .

             However, this Paragraph b. does not apply if the “underinsured
             motor vehicle” is insured by us for Liability Coverage.

Two aspects of this provision are significant to the issues before us. First, the first
clause confirms what Argonaut has conceded in this case -- the definition of
“underinsured motor vehicle” includes a vehicle that has liability coverage provided
in the same policy as the UIM endorsement. In other words, Argonaut provides UIM
coverage, for example, to passengers in the auto of its own insured if the limits of
liability coverage provided by Argonaut does not cover their claims. Second,

                                         -4-
Argonaut will pay under its UIM coverage only after the “limit of any applicable
liability . . . policies have been exhausted.” In other words, Argonaut’s UIM coverage
is explicitly additional or sequential to any liability coverage that may apply,
including its own. With the UIM coverage so clearly stated as an aggregate coverage,
it would take a contrary limiting provision of the utmost clarity to render the liability
and UIM coverages mutually exclusive.

      The first two provisions on which Argonaut relies require little discussion.
(1) The “Two or More Coverage Forms” provision appears in Section IV of the
Business Auto Coverage Form:

      If this Coverage Form and any other Coverage Form or policy issued to
      you by us or any company affiliated with us apply to the same
      “accident”, the aggregate maximum Limit of Insurance under all the
      Coverage Forms or policies shall not exceed the highest applicable Limit
      of Insurance under any one Coverage Form or policy.

Argonaut argues this provision precludes aggregating the liability and UIM coverages
because they are separate “Coverage Forms.” The Supreme Court of Arkansas
rejected this contention in construing a policy issued by an insurer that offered the
same commercial auto Coverage Forms offered by Argonaut. The Court held that
passengers injured while riding in a charity van could recover under both the liability
and UIM coverages in the charity’s auto policy because “Coverage Form” in this
provision referred to the Business Auto Coverage Form. The UIM endorsement was
a modification of that Coverage Form, not a separate coverage form. Philadelphia
Indem. Ins. Co. v. Austin, No. 11-81, -- S.W.3d --, 2011 Ark. 283, at *8-9, 2011 WL
2477219, at *4 (June 23, 2011). On this issue, Philadelphia Indemnity is controlling.

     (2) “Limit of Insurance” provisions appear in both the Business Auto Coverage
Form and the UIM endorsement. The Business Auto Coverage Form provides:



                                          -5-
      Regardless of the number of covered “autos”, “insureds”, premiums
      paid, claims made or vehicles involved in the “accident”, the most we
      will pay for the total of all damages and “covered pollution cost or
      expense” combined, resulting from any one “accident” is the Limit of
      Insurance for Liability Coverage shown in the Declarations.

                                 *   *    *    *   *

      No one will be entitled to receive duplicate payments for the same
      elements of “loss” under this Coverage Form and any Medical Payments
      Coverage Endorsement, Uninsured Motorists Coverage Endorsement or
      Underinsured Motorists Coverage Endorsement attached to this
      Coverage Part.

Similarly, the UIM endorsement provides:

      Regardless of the number of covered “autos”, “insureds”, premiums
      paid, claims made or vehicles involved in the “accident”, the most we
      will pay for all damages and resulting from any one “accident” is the
      Limit of Insurance for Uninsured and Underinsured Motorists Coverage
      shown in the Declarations.

      No one will be entitled to receive duplicate payments for the same
      elements of “loss” under this Coverage and any Liability Coverage Form
      or Medical Payments Coverage Endorsement attached to this Coverage
      Part.

       Argonaut argues these provisions limit recovery to the highest limit of any one
type of coverage -- in this case, $1 million. The Supreme Court of Arkansas rejected
this contention in Philadelphia Indemnity, concluding that the provisions limited
recovery under each type of coverage but did “not bear upon the question of whether”
claimants may aggregate recoveries across these types of coverage. 2011 WL
2477219, at *6. Argonaut argues that its Policy provisions, unlike those at issue in
Philadelphia Indemnity, unambiguously preclude “duplicate payments” of Business
Auto liability and UIM endorsement coverages. We agree with the district court that

                                         -6-
the differences in policy language are immaterial because the decision in Philadelphia
Indemnity turned on the Court’s conclusion that the reference to “duplicate payments”
meant “being paid twice for the same damages.” 2011 WL 2477219, at *5. That
conclusion is consistent with the plain meaning of the word “duplicate.” See New
Oxford Am. Dictionary 539 (3d ed. 2010). Thus, both Policy provisions only prohibit
double payments, from any coverage source, for the same claimant injuries. Here, no
claimant seeks to recover more than his or her damages incurred in the accident. It is
the claimants’ discrete claims in the aggregate that exceed the combined limits of all
coverages in the two Argonaut policies. Thus, on this issue, too, Philadelphia
Indemnity is controlling.

      (3) The third provision on which Argonaut relies -- the “Other Insurance”
provision in the Business Auto Coverage Form as modified by the UIM endorsement
-- was not at issue in Philadelphia Indemnity. The UIM endorsement provides:

      1. Other Insurance in the Business Auto and Garage Coverage Forms
         . . . are replaced by the following:

       If there is other applicable insurance available under one or more
       policies or provisions of coverage:

             a. The maximum recovery under all coverage forms or policies
             combined may equal but not exceed the highest applicable limit
             for any one vehicle under any coverage form or policy providing
             coverage on either a primary or excess basis.

             b. Any insurance we provide with respect to a vehicle the Named
             Insured does not own shall be excess over any other collectible
             uninsured or underinsured motorists insurance providing coverage
             on a primary basis.

             c. If the coverage under this coverage form is provided: (1) On a
             primary basis, we will pay only our share of the loss that must be
             paid under insurance providing coverage on a primary basis. Our

                                         -7-
             share is the proportion that our limit of liability bears to the total
             of all applicable limits of liability for coverage on a primary basis.
             ...

        Argonaut argues that “coverage form” in clause 1.a. means “type of insurance.”
Because liability and UIM insurance provide coverage against distinct risks -- the risk
of liability for one’s own negligence, and the risk of being injured by an underinsured
negligent driver -- they are different “coverage forms.” Therefore, the combined
claims are subject to the higher applicable limit, in this case $1 million. The claimants
argue that “coverage form” in this provision refers to the four commercial auto
Coverage Forms Argonaut offers. As the UIM endorsement is part of the Business
Auto Coverage Form, this provision does not preclude recovery of both coverage
limits.

        Argonaut’s contention that “coverage form” simply means “type of coverage”
might be plausible in other contexts, but it is inconsistent with use of the term
“Coverage Form” elsewhere in the Policy. Most tellingly, the UIM endorsement
begins by stating that it “modifies insurance provided under” four named “Coverage
Forms,” including the “Business Auto Coverage Form.” In addition, the schedule of
uninsured and underinsured motorist limits and premiums is set forth in the Policy’s
Business Auto Declarations, along with schedules of limits and premiums for the
liability, comprehensive, collision, and auto medical payments coverages (which, like
the UIM coverage, is provided by an endorsement). This Policy format is inconsistent
with the argument that the coverage provided by the UIM endorsement is a separate
“Coverage Form,” rather than an additional coverage that is part of the Business Auto
Coverage Form. In construing an insurance contract, “the different clauses . . . must
be read together . . . so that all parts harmonize.” Smith v. S. Farm Bureau Cas. Ins.
Co., 114 S.W.3d 205, 207 (Ark. 2003). Thus, the “Other Insurance” provision does
not come close to overriding the plain meaning of the UIM coverage provision. The
district court correctly read the provisions of the UIM endorsement and the Business


                                          -8-
Auto Coverage Form as unambiguously providing “that an insured may recover under
both the liability and UIM coverages.”

        We are not persuaded by a contrary decision, on which Argonaut heavily relies,
of federal courts construing Maryland law . Bhd. Mut. Ins. Co. v. Carter, No. 11-cv-
01326, 2012 WL 254018, at *4 (D. Md. Jan. 26, 2012), aff’d, No. 12-1291, 2012 WL
3105150, at *1 (4th Cir. Aug. 1, 2012). Of course, we may not follow this decision
to the extent it is inconsistent with Arkansas law as construed in Philadelphia
Indemnity. Moreover, we do not agree with the district court in Brotherhood Mutual
that “allowing uninsured motorist coverage . . . to ‘spring forth’ any time claimants
exhausted their liability insurance coverage” is an “absurd result” because it provides
more liability insurance than was bargained for. The dual-coverage issue in this case
only arises if a claimant is both covered by the negligent driver’s liability insurance
policy and is an “insured” for purposes of the same policy’s UIM endorsement. Thus,
this decision will not result in a wholesale expansion of liability insurance coverage.
Moreover, this case illustrates why organizations whose members or employees
frequently travel in covered autos (particularly charities) need this type of aggregate
commercial auto coverages so that they insure against the organization’s risk of
liability and provide UIM protection for passengers who may be injured due to the
negligence of the organization’s driver as well as negligent drivers of other vehicles.

      For these reasons, the district court’s Orders dated December 8, 2011, and
January 11, 2012, are affirmed.
                       ______________________________




                                         -9-
