Smith v. Shelter Mut. Ins. Co.

• Decision Date: 18 January 1994
• Docket Number: No. 80160,80160
• Citation: 867 P.2d 1260
• Parties: David W. SMITH, Executor of the Estate of Genevieve B. Smith, Appellant, v. SHELTER MUTUAL INSURANCE COMPANY, Appellee.
• Court: Oklahoma Supreme Court

Page 1260

867 P.2d 1260

1994 OK 5

David W. SMITH, Executor of the Estate of Genevieve B Smith, Appellant, v. SHELTER MUTUAL INSURANCE COMPANY, Appellee.

No. 80160.

Supreme Court of Oklahoma.

Jan. 18, 1994.

An appeal from the District Court of Sequoyah County; A.J. Henshaw, Jr., District Judge.

Genevieve Smith (decedent) died after an automobile accident with an Oklahoma driver in Sequoyah County, Oklahoma. The decedent and the driver of her vehicle were Arkansas residents. Both drivers had automobile insurance. The decedent was insured by the appellee, Shelter Mutual Insurance Company (insurance company), under a policy issued in Arkansas. The decedent's representative (estate representative) filed a claim. The insurance company paid the policy limits for the decedent's medical, accidental death, and automobile damages; but it denied claims under the uninsured motorist provision. The insurance company then filed an action for declaratory and summary judgment in Arkansas requesting that the court find that it had no liability under the uninsured motorist provision for the injury and death of the decedent. While the Arkansas action was pending, the estate representative filed an action for negligence and wrongful death in Oklahoma against both drivers and the Sequoyah County Board of County Commissioners. The estate representative included the insurance company as a defendant alleging that, under the policy's uninsured motorist provision, the decedent's damages exceeded the limits of the other named defendants. While the Oklahoma action was pending, the Arkansas court granted the insurance company's motions for declaratory and summary judgment. Pursuant to the Arkansas decision, the insurance company filed a motion for summary judgment in Oklahoma, requesting that the court give full faith and credit to the Arkansas decision and that it dismiss the decedent's claim against them. The trial judge, Honorable A.J. Henshaw, Jr., granted summary judgment to the insurance company and dismissed the insurance company with prejudice. We find that because the Arkansas judgment is entitled to full faith and credit, summary judgment was properly granted.

AFFIRMED.

Steven R. Hickman, Tulsa, for appellant.

Robert L. Jones, Jr., Fort Smith, AR, John Robert Montgomery, Sallisaw, for appellee.

KAUGER, Justice:

The issue presented is whether the trial court, giving full faith and credit ¹ to the Arkansas judgment, properly granted summary judgment. We find that because the Arkansas judgment is entitled to full faith and credit, summary judgment was properly granted.

FACTS

On November 11, 1989, in Sequoyah County, Oklahoma, a vehicle owned by Genevieve Smith (decedent), and driven by Wanda L. Lindley (the Arkansas driver), collided with a vehicle driven by Daryl Wayne Jones (the Oklahoma driver). Because a stop sign was no longer standing, the Arkansas driver failed to stop at an intersection striking the Oklahoma driver. The decedent, the passenger in her own vehicle, subsequently died as a result of injuries sustained in the accident. The decedent was insured by the appellee, Shelter Mutual Insurance Company (insurance company), under an Arkansas policy. The decedent's representative (estate representative) filed a claim against the insurance company for uninsured/underinsured motorist coverage. ² Pursuant to its policy, the insurance company paid the decedent's estate On September 10, 1990, the insurance company filed an action for declaratory judgment in the Circuit Court of Pope County, Arkansas, naming the decedent and the Arkansas driver. The insurance company requested that the court find that: 1) the insurance company had no liability under the uninsured motorist provision of the decedent's policy for the injury and death of the decedent because the decedent was excluded from the uninsured motorist provision of the policy; ³ 2) in the event the Arkansas driver sued the decedent, there was no duty under the policy to defend or pay the Arkansas driver because the decedent was not covered under the policy; and 3) the automobiles owned by the decedent and the Oklahoma driver were insured at the time of the accident and did not qualify as uninsured motor vehicles.

$5,000.00 for medical; $5,000.00 for accidental death; and it paid for the damage to the decedent's automobile. The insurance company denied the estate representative's claim under the uninsured motorist provision.

On November 29, 1990, while the Arkansas action was pending, the estate representative filed an action in Sequoyah County, Oklahoma, against the Sequoyah County Board of County Commissioners, the Oklahoma driver, and the Arkansas driver for negligence and wrongful death. The petition also named the insurance company as a defendant alleging that, under the policy's uninsured motorist provision, the decedent's damages exceeded the limits of the other named defendant's insurance policies. ⁴

Pursuant to its request for declaratory judgment, the insurance company filed a motion for summary judgment in Arkansas on January 24, 1991. Both the Arkansas driver and the estate representative defended the motions for declaratory and summary judgment in Arkansas. ⁵ On May 20, 1991, the Arkansas court entered declaratory judgment

against the estate representative and the Arkansas driver; and it granted the insurance company's motion for summary judgment. The insurance company filed a motion for summary judgment in the Oklahoma court, insisting that: 1) the Arkansas order is entitled to full faith and credit in Oklahoma; and 2) res judicata precludes the estate representative's claim against the insurance company. After a hearing, the trial court granted the insurance company's motion for summary judgment and dismissed the estate representative's claim with prejudice on October 17, 1991. The estate representative appealed. ⁶

BECAUSE THE ARKANSAS JUDGMENT IS ENTITLED TO FULL FAITH AND CREDIT, SUMMARY JUDGMENT WAS PROPERLY GRANTED.

The estate representative argues that the trial court erred in granting summary judgment and in dismissing the insurance company from the Oklahoma action. The insurance company insists that the estate representative is precluded from filing a claim against the insurance company because an Arkansas court already determined that the decedent was not covered under the policy. The insurance company contends the Arkansas judgment must be given full faith and credit. The estate representative counters that the Arkansas judgment violates the public policy of this state and should not be given full faith and credit.

The estate representative relies on Bohannan v. Allstate Ins. Co., 820 P.2d 787, 797 (Okla.1991), for the proposition that when express provisions of an out-of-state insurance contract conflict with Oklahoma public policy, Oklahoma law applies to interpret and enforce the contract. ⁷ Bohannan is distinguishable from the instant case because Bohannan involved choice of law principles rather than whether Oklahoma courts must give full faith and credit to a final judgment of another state. ⁸

Where a similar controversy between the same parties is pending in a separate Under Arkansas law, for a judgment to be final it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy. ¹³ A circuit court judgment does not become final until at least thirty days after its entry. ¹⁴ An order granting summary judgment is a final adjudication on the merits which bars subsequent suits on the same cause of action. ¹⁵ Here, the insurance company requested that the Arkansas court declare that the decedent was not covered under the uninsured motorist provision of the Arkansas insurance policy. The estate representative defended against the insurance company's motion in Arkansas. The court, after considering both parties' arguments, granted the insurance company's request and dismissed the parties from the action. There is no indication from the record that the estate representative appealed the Arkansas decision. The circuit court order was issued on May 20, 1991; and it became a final decision on the merits thirty days later.

                jurisdiction, each forum is generally free to proceed to a judgment.  The first judgment precludes the sister jurisdiction from determining issues that were or could have been raised in the first action. 9  The United States Constitution 10 requires that full faith and credit be accorded a final judgment of a sister state court having jurisdiction of the parties and of the issues determined. 11  The local law of the state where the judgment is rendered determines the issues decided and whether a judgment is on the merits. 12
                

Arkansas courts recognize two types of preclusion: claim preclusion and issue preclusion. Claim preclusion bars relitigation of a subsequent suit when: 1) the first suit resulted in a judgment on the merits; 2) the first suit was based upon proper jurisdiction; 3) the first suit was fully contested in good faith; 4) both suits involved the same claim or cause of action which was litigated or could have been litigated; and 5) both suits involve the same parties. ¹⁶ Issue preclusion bars the relitigation of those matters directly and necessarily litigated in the previous action. ¹⁷ The binding effect of a judgment is determined by the pleadings as well as by the judgment itself. ¹⁸

Under Arkansas law and the facts presented, the elements of claim preclusion are met:

                1) the Arkansas court made a final determination on the merits that the decedent was not covered under the policy;  2) Arkansas had jurisdiction to determine rights and liability of insurance contracts issued in Arkansas to Arkansas residents; 19  3) the estate representative appeared in Arkansas and fully contested the insurance company's lawsuit;  4) both suits involved the same claim or cause of action that was litigated; 20  and 5) the Arkansas suit

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