Sinclair Wyo. Ref. Co. v. Infrassure, LTD

• Decision Date: 10 May 2021
• Docket Number: S-20-0114
• Citation: 486 P.3d 990
• Parties: SINCLAIR WYOMING REFINING COMPANY, Appellant (Plaintiff), v. INFRASSURE, LTD, Appellee (Defendant).
• Court: Wyoming Supreme Court

486 P.3d 990

SINCLAIR WYOMING REFINING COMPANY, Appellant (Plaintiff),

v.INFRASSURE, LTD, Appellee (Defendant).

S-20-0114

Supreme Court of Wyoming.

May 10, 2021

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.

ROBINSON, District Judge.

[¶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 Wyo. Stat. Ann. § 26-15-101(a)(ii) even if no copy was ever conveyed to Wyoming and the policy lists only an out-of-state address for the insured. This Court accepted the certified question pursuant to Rule 11 of the Wyoming Rules of Appellate Procedure. We answer the certified question in the affirmative.

CERTIFIED QUESTION

[¶2] Whether, under Wyo. Stat. Ann. § 26-15-101(a)(ii), an insurance policy is "issued for delivery" or "delivered" in Wyoming where a Wyoming corporation is a named insured, the policy covers risks in Wyoming, and the policy provides that coverage shall apply "in the same manner and to the same extent" as if the policy had been issued to the Wyoming corporation, but no copy was ever conveyed to Wyoming and the policy only lists an out-of-state address for the insured?

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.

[¶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 Companiesc/o Risk Manager550 East South TempleSalt 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 Wyo. Stat. Ann. § 26-15-124(c) (LexisNexis 2019):

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 Wyo. Stat. Ann. § 26-15-124(c) because The Policy was not "issued for delivery" or "delivered" in Wyoming, a requirement of Wyo. Stat. Ann. § 26-15-101(a)(ii) for Wyoming's insurance code to be applicable. The federal district court agreed and dismissed the claim. Sinclair appealed to the Tenth Circuit and that court certified the question given above to this Court as an undecided matter of state law.

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 Wyo. Stat. Ann. § 26-15-101 (LexisNexis 2019) :

(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...