                                                                                  FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                            FOR THE TENTH CIRCUIT                            June 17, 2019
                        _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
 STATE FARM FIRE & CASUALTY
 COMPANY,

       Plaintiff - Appellee,

 v.                                                          No. 18-5080
                                                (D.C. No. 4:17-CV-00656-CVE-FHM)
 VICTORIA WILLIAMS, as personal                              (N.D. Okla.)
 representative of the estate of Khalid
 Jabara,

       Defendant - Appellant,

 and

 DAVID SCOTT, as administrator of the
 estate of Stephen A. Schmauss; STANLEY
 VERNON MAJORS,

       Defendants.
                        _________________________________

                            ORDER AND JUDGMENT*
                        _________________________________

Before BRISCOE, McKAY, and HOLMES, Circuit Judges.
                  _________________________________

       This is a declaratory judgment action filed by State Farm Fire & Casualty

Company to secure a ruling that it was not obligated to defend or indemnify its

insureds in a state tort case Victoria Williams filed against them.


       *
         This order and judgment is not binding precedent, except under the doctrines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 with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
       The district court granted summary judgment in favor of State Farm, and

Ms. Williams appealed. We review de novo an order granting summary judgment,

viewing the facts in the light most favorable to the non-moving party and drawing all

reasonable inferences in her favor. DeWitt v. Sw. Bell Tel. Co., 845 F.3d 1299, 1306

(10th Cir. 2017).

       In August 2016, Stanley Majors shot and killed his neighbor Khalid Jabara.

Mr. Majors was convicted of first-degree murder for the killing of Mr. Jabara. The

gun Mr. Majors used in the crime was purchased and owned by Stephen Schmauss,

Mr. Major’s husband.

       In February 2017, Mr. Jabara’s sister, Ms. Williams, filed suit against

Mr. Majors and Mr. Schmauss in Oklahoma state court, placing Mr. Schmauss’s

liability for Mr. Jabara’s death in his ownership of the gun and accompanying

negligence or recklessness. Because Mr. Schmauss and Mr. Majors had insurance

policies with State Farm at the time of the murder, the insurance company filed a

complaint in federal court seeking a declaration that the policies did not cover

Ms. Williams’s claims.

       The homeowners’ insurance policy Mr. Schmauss and Mr. Majors held

together provided that State Farm would defend and indemnify the insured “[i]f a

claim is made or a suit is brought against an insured for damages because of bodily

injury or property damage to which this coverage applies, caused by an occurrence.”

(Appellant’s App. at 157.) The policy defined “occurrence” as “an accident,

including exposure to conditions, which results in . . . bodily injury[] or . . . property

                                             2
damage . . . during the policy period.” (Id. at 143–44.) It excluded coverage for

“bodily injury or property damage . . . (1) which is either expected or intended by the

insured[,] or (2) which is the result of willful and malicious acts of the insured.” (Id.

at 158.) The policy also included a “Severability of Insurance” provision stating,

“This insurance applies separately to each insured.” (Id. at 161.)

       Mr. Schmauss individually held an additional personal liability umbrella

policy issued by State Farm. That policy provided that State Farm would defend and

indemnify the insured “[i]f a claim is made or suit is brought against an insured for

damages because of a loss to which this policy applies.” (Id. at 187.) The policy

defined “loss” as “an accident, including accidental exposure to conditions, which

first results in bodily injury or property damage during the policy period.” (Id. at

183.) Like the homeowners’ policy, the umbrella policy excluded coverage for

“bodily injury or property damage which is . . . either expected or intended by the

insured[,] or . . . the result of any willful and malicious act of the insured.” (Id. at

190.) Neither policy defined the term “accident.”

       In January 2018, State Farm brought this action for declaratory judgment and

soon thereafter filed a motion for summary judgment, arguing that intentional murder

was not an “accident” and therefore was not covered by the policies. In support of

this argument, State Farm cited to Farmers Alliance Mutual Insurance Co. v. Salazar,

77 F.3d 1291, 1294, 1297 (10th Cir. 1996), a diversity case arising out of Oklahoma

in which a panel of this court concluded that “intentional murder is not ‘an

accident.’” Ms. Williams filed a motion requesting that the district court certify a

                                             3
question of law to the Oklahoma Supreme Court, asking in essence whether Salazar’s

holding is an accurate statement of Oklahoma law or whether the perspective of the

insured—and each insured when a policy is held by multiple persons—is relevant to

determining the accidental nature of an event. Ms. Williams’s response to State

Farm’s motion for summary judgment also attempted to show that the reasoning in

Salazar was flawed, as well as to distinguish that case under the facts and policy

language at issue here. The following month, Ms. Williams filed her own motion for

summary judgment, which made several of the same arguments she had made in

response to State Farm’s motion.

      In its order ruling on the motions, the district court concluded that it would be

inappropriate for it to certify Ms. Williams’s question to the Oklahoma Supreme

Court because it was bound by Salazar. It then concluded that Salazar’s holding that

murder can never qualify as an accident under an Oklahoma insurance policy dictated

summary judgment in State Farm’s favor. Ms. Williams appealed and filed a motion

asking this court to certify her question to the Oklahoma Supreme Court.

      Ms. Williams’s argument on appeal, in addition to her motion to certify a

question of state law, revolves around the Salazar decision. In that case,

Ms. Salazar’s sixteen-year-old son Manuel Corrales and his friend Jacob De LaCruz

murdered another boy, Thomas Byus, by shooting him from a moving vehicle.

Salazar, 77 F.3d at 1293–94. The administratrix of the boy’s estate, Ms. Byus, filed

a wrongful death action in Oklahoma state court against Ms. Salazar and her son. Id.

at 1293 & n.1. The claim against Ms. Salazar asserted that she had negligently

                                           4
supervised her son by allowing him to possess the gun he used in the shooting, as

well as the gun he gave to Jacob De LaCruz also to use in the shooting. Id. at 1293–

94.

      Ms. Salazar had a homeowner’s insurance policy providing that Farmers

Alliance would defend and indemnify the insured for damages because of bodily

injury or property damage “to which this insurance applies, caused by an occurrence

and arising out of the ownership, maintenance or use of the insured premises and all

operations necessary or incidental thereto.” Id. The policy defined “occurrence” as

“an accident, including continuous or repeated exposure to conditions, which results

in bodily injury or property damage neither expected nor intended from the

standpoint of the insured.” Id. at 1294. The district court concluded that the murder

was not an “occurrence” as to Manuel Corrales because he intended and expected to

harm Thomas Byus. Id. As to Ms. Salazar, however, the district court concluded

that the murder was an “occurrence” because she did not expect or intend the harm,

and it arose out of her ownership and use of the house because that is where her

negligent supervision took place. Id.

      On appeal, a panel of this court first held that “when determining whether a

bodily injury was ‘caused by an occurrence’ the question of whether there was an

‘occurrence’ should be resolved by focusing on the injury and its immediately

attendant causative circumstances.” Id. at 1296. Thus, the potential “occurrence” at

issue in that case was the murder itself, as opposed to any negligent actions leading

up to it. Id. at 1297. From there, the Salazar panel considered whether the murder

                                           5
was an “occurrence” under the policy’s definition of that term, concluding that the

definition “indicate[d] a two-part requirement”: (1) “the incident at issue must have

been ‘an accident,’” and (2) “the resulting injury must have been ‘neither expected

nor intended from the standpoint of the insured.’” Id. Because the panel concluded

that “intentional murder is not ‘an accident,’” Salazar did not address the “expected

or intended” portion of the definition, nor did it address whether the murder arose out

of Ms. Salazar’s ownership or use of the house. 77 F.3d at 1297.

       State Farm acknowledges that, a year after Salazar was decided, in Mayer v.

State Farm Mutual Automobile Insurance Co., 944 P.2d 288, 290 (Okla. 1997), the

Oklahoma Supreme Court observed, “In first-party uninsured motorist coverage

contests between the insured and the insurer, the term ‘accident’ is viewed from the

standpoint of the insured. It can include criminal acts arising from the uninsured

vehicle’s use.” In our case, State Farm contends that “Oklahoma only views the term

‘accident’ from the standpoint of the insured in first party insurance cases, i.e., where

the insured is the claimant.” (Appellee’s Br. at 11.)

       This case does not give us occasion to revisit the decision in Salazar, which is

binding precedent on us. See Wankier v. Crown Equip. Corp., 353 F.3d 862, 866

(10th Cir. 2003) (“[W]hen a panel of this Court has rendered a decision interpreting

state law, that interpretation is binding on district courts in this circuit, and on

subsequent panels of this Court, unless an intervening decision of the state’s highest

court has resolved the issue.”). The Oklahoma Supreme Court’s decision in Mayer,

although issued after the decision in Salazar, did not in fact resolve the issue before

                                             6
us in this case. As State Farm has pointed out, Mayer dealt with the definition of

“accident” in the context of first-party uninsured motorist coverage and did not

involve a third-party insurance claim like the one at issue here. Nor did Mayer cite to

or discuss Salazar. See Wankier, 353 F.3d at 867.

      Therefore, we must reject Ms. Williams’s arguments that merely criticize

Salazar’s reasoning. Ms. Williams does, however, make an effort to distinguish that

case on the basis that the policy language at issue there differed from the language at

issue in this case. Specifically, she observes that the Salazar definition of

“occurrence” included “from the perspective of the insured,” whereas the definition

here lacks that information. (Appellant’s Br. at 13.) According to Ms. Williams, this

“key difference” renders the policy language here ambiguous, requiring an

interpretation in favor of coverage. (Id.) Unfortunately for Ms. Williams, Salazar’s

holding precludes this argument because the Salazar court did not rely on the second

prong of the two-part test it identified, which would have considered the meaning of

“neither expected nor intended from the standpoint of the insured.” See 77 F.3d at

1297. Instead, Salazar broadly held that the term “accident” unambiguously

precludes coverage for murder from any perspective. See id. We additionally note

that it would be odd for us to conclude that a policy expressly distinguishing between

perspectives unambiguously did not allow coverage for murder but that a policy

without such a distinction could be read as allowing it.

      Salazar also precludes each of Ms. Williams’s other arguments for coverage in

this case. First, she contends that the severability clause of the homeowners’ policy

                                            7
makes the murder an “occurrence” as to Mr. Schmauss even though it is not an

“occurrence” as to Mr. Majors. Second, she argues that the severability clause

interacts with the undefined term “accident” to create an ambiguity in the policy.

Salazar did not address the existence of a severability clause in that case, but the fact

that the district court there had found coverage for Ms. Salazar but not for her son

suggests that the policy included one. See id. at 1294. Either way, however, Salazar

concluded that murder could never be an “accident”—as in the definition of

“occurrence”—even when only one insured committed the murder and it was

allegedly unexpected from the perspective of the other insured. See id. at 1297.

Nothing about our decision in Salazar suggests that a severability clause would affect

this reasoning; under Salazar, a murder simply cannot be covered as an “accident” as

to any insured.

      Similarly, Salazar undermines Ms. Williams’s contention that the terms “loss”

and “occurrence” in the policies are ambiguous because they do not define

“accident.” The policy at issue in Salazar apparently did not define “accident”

either, see id. at 1294, but again the Salazar court held that “accident”

unambiguously does not include murder, see id. at 1297.

      Finally, Ms. Williams asserts that the policies’ exclusions for “bodily injury or

property damage[]” that is “either expected or intended by the insured; or . . . the

result of [any] willful and malicious act[] of the insured” (Appellant’s App. at 158,

190), only exclude coverage for Mr. Majors, who acted intentionally, but not for

Mr. Schmauss, who was merely negligent. As State Farm points out, however,

                                            8
exclusions only come into play after coverage has been found under an insurance

policy’s coverage terms. Because Salazar held that there is no coverage for any

murder, regardless of who committed it, the intentional-acts exclusions, like the

intentional-acts limitation in the Salazar policy’s definition of “occurrence,” need not

be reached. See 77 F.3d at 1297. At least as regards murder, the intentional-acts

exclusions are a nullity.

      We turn now to Ms. Williams’s request that we ask the Oklahoma Supreme

Court whether murder can constitute an “accident” in a third-party insurance case

under Oklahoma law where the murder is unintended and unexpected from the

perspective of the insured. “In diversity cases, the Erie doctrine instructs that federal

courts must apply state substantive law” “in order to discourage forum shopping and

to avoid inequitable administration of the [law].” Racher v. Westlake Nursing Home

Ltd. P’ship, 871 F.3d 1152, 1162, 1164 (10th Cir. 2017). Nevertheless, as noted

above, each panel of this court is bound by stare decisis to follow the precedent of

earlier decisions. See Wankier, 353 F.3d at 866. Additionally, “[t]he decision to

certify ‘rests in the sound discretion of the federal court.’” Kan. Judicial Review v.

Stout, 519 F.3d 1107, 1120 (10th Cir. 2008) (quoting Lehman Bros. v. Schein, 416

U.S. 386, 391 (1974)). In our discretion, we decline to certify Ms. Williams’s

question to the Oklahoma Supreme Court.




                                            9
      The district court’s order granting summary judgment in favor of State Farm is

AFFIRMED. Ms. Williams’s motion to certify a question of state law is DENIED.


                                         Entered for the Court


                                         Monroe G. McKay
                                         Circuit Judge




                                        10
