Wm. C. HETHERINGTON, JR., Vice-Chief Judge.
¶ 1 In this action for breach of contract, negligence and quantum meruit Alfalfa Electric Cooperative, Inc. (AEC) filed against Superior Pipeline Company L.L.C. (Superior), Triple J Production Company, Inc. (Triple J), and Appellant Mid-Continent Casualty Company (Insurer) for damages to AEC's transformer and trailer, Insurer appeals a summary adjudication order in favor of AEC finding the commercial auto policy Insurer issued to Triple J provided coverage for the alleged damages sought by AEC. We
¶ 2 This appeal is governed by and follows the procedure set forth in Oklahoma Supreme Court Rule 1.36, 12 O.S.2011, ch. 15, app. 1, without appellate briefing. The appellate standard of review for a trial court's grant of summary judgment is de novo. Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. When one party is entitled to judgment as a matter of law, i.e., there are no material disputed facts, summary judgment will be affirmed. Id.
¶ 3 AEC's second amended petition generally alleged that in February 2010 AEC agreed to rent Superior a 5,000 KVA trailer mounted transformer on a temporary basis and Superior agreed to pay a rental fee and assume any and all liability for the transformer "from the time it was delivered and until it was picked up by [AEC]." AEC further alleged, as facts common to all "counts': 1) Superior did not pay any monies owed under the rental agreement, 2) when Superior had finished working with the transformer, it hired Triple J to return it to AEC, 3)
¶ 4 AEC's second amended petition included the originally-pled two "counts" or theories of liability against Superior, i.e., breach of contract and quantum meruit, and three against Triple J, i.e., breach of bailment contract, negligence, "presumption of negligence/res ipsa loquitor." AEC added Insurer as a defendant and a new theory of liability against Triple J and Insurer, alleging they were jointly liable for the damages caused by Triple J based on the insurance policy issued "by [Insurer] pursuant to the applicable motor carrier regulations."
¶ 5 Insurer moved for summary judgment, arguing there was no coverage for the alleged damages due to certain exclusions in Triple J's three separate policies, i.e., commercial auto liability, commercial general liability policy, and inland marine. To support its arguments, Insurer attached AEC's second amended petition, relevant pages of the three policies, and an affidavit from Insured's employee, Gary Renneckar, attesting Insurer had three policies with Triple J and that there was no coverage under the policies. AEC filed a combined response and cross-motion for summary judgment, attaching Triple J's answers to AEC's first request for admissions and its first interrogatories,
¶ 6 Insurer filed a response opposing AEC's cross-motion and a separate reply to AEC's response to Insurer's summary adjudication motion. AEC then replied to Insurer's response to AEC's cross-motion. Three weeks later, the trial court filed a letter addressed to the parties' counsel which summarized its rulings on their motions, identified the remaining issues, and directed AEC's counsel to prepare the order.
¶ 7 Following the filing of both parties' motion to settle journal entry, the court filed a "Journal Entry of Judgment" October 3, 2012. The judgment states the parties' motions were taken under advisement pending receipt of "a certified copy of the Commercial Auto Liability Policy issued to [Triple J] by [Insurer] which [it] subsequently provided."
¶ 8 The trial court subsequently filed a "Journal Entry of Judgment" on February 14, 2013, explaining Triple J had confessed liability for the accident that is the subject of the lawsuit and damages to AEC's property and equipment. The court also explains his prior decisions to overrule Insurer's motion to dismiss based on his determination it was a proper party in the case and to grant summary adjudication in favor of AEC and against Insurer. In the same judgment, the court finds 1) AEC was entitled to judgment against Triple J and Insurer, jointly and severally, 2) there was no dispute as to amount of damages, which totaled $54,712.06, 3) the parties agreed to AEC's entitlement to attorney fees as the prevailing party in its negligent injury to property action pursuant to 12 O.S.2011 § 940, and to the amount of reasonable fees and costs AEC incurred in prosecuting the action, in the sum of $27,012.09. That same day, AEC filed a dismissal of any and all of its claims against the remaining party, Superior, without prejudice to refiling. Insurer's appeal followed.
¶ 9 Insurer's Petition in Error raises four errors with the trial court's granting of AEC's cross-motion for summary judgment. Based, in part, on AEC's dismissal of its claims against Superior, we need not address Insurer's allegation of error concerning inclusion of damages for rent in the award.
¶ 10 As previously noted, the summary adjudication order on appeal does not specify any reason(s) for denying Insurer's motion or granting, in part, AEC's cross motion for summary judgment. In light of the parties' arguments, the order on appeal implies the trial court's agreement that the Policy's exclusions are unambiguous, the material facts necessary to apply each of the three policy exclusions are undisputed, and as a matter of law, neither exclusion applies in this case to exclude coverage.
¶ 12 In AEC's reply, it argues Insurer had made the "same argument" in its motion to dismiss and that the trial court correctly denied "based on long-standing Oklahoma judicial authority." Neither Insurer's motion to dismiss or the order resolving it is included in the accelerated record. However, the trial court's denial has record support in the October 3, 2013 Journal Entry of Judgment, explaining he overruled the dismissal motion, finding Insurer "is a proper party in this case."
¶ 13 "Standing refers to a person's legal right to seek relief in a judicial forum." Fent v. Contingency Review Bd., 2007 OK 27, ¶ 7, 163 P.3d 512, 519. "Standing may be raised at any stage of the proceeding, and when raised, the party invoking the court's jurisdiction has the burden of establishing his or her standing." Wells Fargo Bank N.A. v. Heath, 2012 OK 54, ¶ 12, 280 P.3d 328, 334.
¶ 14 To the extent Insurer's second argument re-urges AEC may not bring a direct action against Insurer as Triple J's motor carrier lialbility insurance carrier and its first argument brings a new challenge to AEC's standing based on Insurer's alleged non-liability for AEC's alleged damages to "cargo," we must address these predicate issues before proceeding with interpretation of the policy. We begin with Insurer's second argument.
¶ 15 As relevant here, Insurer issued a Form F to Triple J pursuant to § 230.30(A), part of Oklahoma's Motor Carrier Act of 1995 (the MCA), 47 0.5. § 230.21 et seq. According to § 230.22(C), the MCA applies "to the transportation of passengers or property by motor carriers and private carriers, except motor carriers of household goods and used emigrant movables, over public highways of this state." (Emphasis added.) Section 230.30(A) mandates "no license shall be issued by the [Corporation] Commission to any carrier until after the carrier shall have filed with the Commission a liability insurance policy or bond covering public liability and property damage . . ."
¶ 16 That section's predecessor, 47 O.S. 2001 § 169, has long been interpreted by the Supreme Court 1) to make a motor carrier and its insurer "jointly liable" and 2) to allow an injured third party to bring a direct action against a tortfeasor motor carrier and its insurer when the liability policy or bond required by § 169 has been filed with the Oklahoma Corporation Commission (OCC). Daigle v. Hamilton, 1989 OK 137, ¶ 8, 782 P.2d 1379, 1381 (citing Enders v. Longmire, 1937 OK 154, 67 P.2d 12). Important to this issue, the Legislature enacted § 230.30(A) as part of the MCA without deleting any § 169 language the Supreme Court had previously interpreted to allow a direct action against a motor carrier and its insurer, i.e., "the liability and property damage insurance policy or bond shall bind the obligor thereunder to make compensation for . . . loss or damage to property, resulting from the operation of any carrier for which the carrier is legally liable."
¶ 17 In Fierro, another panel of this division of the Court of Civil Appeals addressed § 230.30(A) of the MCA and found the statute denied a third party's direct action against the insurer of an interstate motor carrier whose compulsory public liability policy had been filed in its home state and not in Oklahoma as required to invoke the MCA. Thus Fierro is factually distinguishable from the instant case which involves an intrastate motor carrier, Triple J, about which there is no dispute its § 230.30(A) liability policy was properly filed with the OCC.
¶ 19 We also reject Insurer's lack of standing argument based on its position that AEC's alleged damages to its transformer are to "cargo," for which § 230.30(B) mandates "cargo" insurance. The Legislature enacted the MCA to "regulate transportation by motor carriers and private carriers" for the "public interest," recognizing the need to require "all motor carriers and private carriers" 1) to have adequate insurance, 2) to provide service in a safe and efficient manner, and 3) to prevent "a detrimental impact on the environment" by the operations of "motor carriers and private carriers." See § 23022(A) of the MCA.
¶ 20 As relevant here, the Legislature vested the OCC with powers "to protect the shipping and general public by supervising and requiring insurance of all motor carriers and private carriers" and "to establish there will be no detrimental environmental impact." § 230.24(A)(2) and § 230.24(A)(4) of the MCA. The OCC also has the duty "to supervise and regulate motor carriers in all other matters affecting the relationship between such carriers and the traveling and shipping public." § 23024(A)(5) of the MCA. As part of the general and shipping public, AEC qualifies as an intended beneficiary of the MCA's protections. See also Casualty Reciprocal Exchange v. Waggoner Drilling Company, 1959 OK 43, 340 P.2d 490 (based on § 169 and motor carrier's liability policy, the court held the insurer liable to a non-traveling owner for property damages to a drilling rig during re-assembly).
¶ 21 The terms "motor carrier" and "private carrier" are defined by the MCA with very distinct meanings. As relevant here, a "motor carrier" means "any person . . . operating upon any public highway for the transportation of passengers or property for compensation or for hire or for commercial purposes, and not operating exclusively within the limits of an incorporated city or two with this state." § 230.23(6) of the MCA. In contrast, "private carrier" means "any person engaged in transportation upon public highways, of persons or property or both, but not as a motor carrier." (Italics added.) § 230.23(9) of the MCA. "Private carrier" also "includes any persons who transports property by motor vehicle where such transportation is incidental to or in furtherance of any commercial enterprise of such person, other than transportation." Id.
¶ 22 Unlike the majority of the MCA sections which address "motor carriers and private carriers,"
¶ 23 In this case, except for the sole reference in the title of the Form F attached to the Policy, "Uniform Motor Carrier Bodily Injury and Property Damage Liability Insurance Endorsement," Insurer has not demonstrated Triple J is a "motor carrier," as defined by the MCA, to which § 230.30(B)'s requirement for a cargo insurance applies. Because the evidentiary materials presented to the trial court support only Triple J's status as a intrastate private carrier, we affirm the trial court's implied rejection of Insurer's remaining standing argument.
¶ 24 "Interpretation of a policy with its exclusions is a law question," unless the facts necessary to apply the decided law question are in dispute. Wiley v. Travelers Insurance Company, 1974 OK 147, ¶ 15, 534 P.2d 1293, 1296. "A policy of insurance is a contract and should be construed like any other contract . . . where not ambiguous, according to its terms." Id., ¶ 16. "Parties to insurance contracts are at liberty to contract for insurance to cover the risks as they see fit and are bound by terms of the contract." Id. As a result, "courts will not undertake to rewrite terms [of the insurance contract]." Id.
¶ 25 In a dispute over the language of an insurance policy, our first step is to determine as a matter of law whether the policy language at issue is ambiguous. See Wynn v. Avemco Ins. Co., 1998 OK 75, ¶ 17, 963 P.2d 572, 575. If it is not ambiguous, we accept the language in its plain, ordinary and popular sense. McDonald v. Schreiner, 2001 OK 58, ¶ 7, 28 P.3d 574, 577. "We construe the policy to give a reasonable effect to all of its provisions." Cranfill v. Aetna Life Ins. Co., 2002 OK 26, ¶ 5, 49 P.3d 703, 706.
¶ 26 We are also mindful that the "general declaration of insurance . . . normally determines the insurance carrier's liability, and the insured's respective rights under the contract by identifying what risks are covered and excluded by the policy." Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 13, 812 P.2d 372, 377 (footnote omitted). "[A]n exclusion. . . eliminates coverage where, were it not for the exclusion, coverage would have existed" under the insurance policy. Id., at n. 11. "Policy exclusions are read seriatim; each exclusion eliminates coverage and operates independently against the general declaration of insurance coverage and all prior exclusions by specifying other occurrences not covered by the policy." Id., ¶ 13, 812 P.2d at 377 (footnote omitted). "In case of doubt, exclusions exempting certain specified risks are construed strictly `against the insurer." Id. (footnote omitted). With these rules in mind, we review the Policy.
¶ 27 As relevant here, Triple J is the named insured listed on the Policy's Declaration Page, which describes Triple J as a "corporation" that "installs & repairs oilfield production equipment." The Policy and its endorsements provides coverage for, inter alia, liability, uninsured motorists, and motor carrier bodily injury and property damage liability.
¶ 28 Pursuant to "Section II—Liability Coverage" and subsection A of the "Business Auto Coverage," Insurer agreed to pay: 1) "all sums an `insured' legally must pay as damages because of . . . property damage" and 2) "all sums an "insured" legally must pay as a "covered pollution cost or expense," that "are caused by an accident and resulting from the ownership, maintenance or use" of covered autos.
¶ 29 "Property damage" is defined by the Policy as "damage to or loss of use of tangible property," about which there is no dispute the damages to AEC's transformer and trailer qualify as such damages were caused by an "accident" and resulted from the use of
¶ 30 The controversy between AEC and Insurer involves the applicability of the following three exclusions of the Policy's "Business Auto Coverage" section:
¶ 31 To support the Policy provides no liability coverage for AEC's damages, Insurer essentially argues there is one undisputed material fact in common to Exclusions B.6. and B.11. that precludes summary judgment in favor of AEC and requires summary judgment in its favor—Triple J was transporting and towing AEC's trailer mounted transformer when it became unattached from Triple J's hitch.
¶ 32 AEC admits it originally alleged Triple J was "transporting" the trailer mounted transformer when it was damaged, but responds to Insurer's motion, arguing subsequent discovery revealed different circumstances
¶ 33 We agree there is a common thread in the Policy's Exclusions B.6. and B.11. by which Insurer attempts to exclude payment for both "property damage involving property. . . transported by "insured" and "property damages . . . arising from the actual . . . release or escape of `pollutants'. . . that are contained in any property that is being towed or transported by a covered auto." Relying solely on Gary Renneckar's deposition testimony, AEC argues the transformer and trailer were no longer being towed or transported when the hitch malfunctioned. Assuming without deciding that AEC's argument is correct, AEC has failed to consider an undisputed material fact revealed by the evidentiary materials, i.e., Triple J was in physical possession or in custody of the transformer and trailer when the accident occurred. Application of that fact alone to the remaining part of Exclusion B.6., "property damage involving property . . . in the insured's care, custody or control", results in potential application of that specific exclusion.
¶ 34 Similarly, it is also undisputed Triple J was between its point of departure and the final destination 1) when the hitch on its covered vehicle malfunctioned and ultimately causing the transformer and trailer to overturn and 2) when the pollutants contained in the transformer were released on the ground and/or pavement. As a result, application of these undisputed facts to the remaining part of Exclusion B.11.a.2., i.e., "`property damage' arising out of the actual . . . release or escape of `pollutants' . . . that are contained in any property that is . . . [o]therwise in the course of transit by or on behalf of the `insured,'" also implicates this exclusion.
¶ 35 In light of these undisputed facts, the clear and unambiguous language of the Policy's Exclusion B.6. and B.11 would appear to support Insurer's position of no coverage under either exclusion and summary judgment in its favor. However, because the Policy, as AEC further argues,
¶ 36 We conclude the trial court's order in favor of AEC is supported by Oklahoma precedent interpreting § 230.30's predecessor, § 169, as becoming part of the Policy and controlling over similar policy exclusions. In Casualty Reciprocal Exchange v. Waggoner Drilling Company, 1959 OK 43, 340 P.2d 490, the owner of property sued a trucking company hired to transport an oil well drilling rig from one lease to another, seeking damages sustained to the drilling rig's mast while the trucking company was reassembling the rig at the delivery point. Similar to the facts of this case, a malfunction of the trucking company's vehicle caused the mast to fall to the ground when attempting to raise it with a winch that was attached to the truck.
¶ 37 Based on the undisputed evidence, the Court in Waggoner determined, as relevant here, that 1) the disassembling, loading, unloading, and reassembling of the oil rig and transportation from one lease to another "constituted one continuous act of transportation" and 2) even though the vehicle was off the highway at the time of the resulting damage, the operation or use of the vehicle in reassembling the rig was "incident to the transportation of the rig" and "had a proximate and necessary connection with the operation and use of the vehicle upon the highway within the meaning of 47 O.S. [1951] § 161-169."
38 The insurer in Waggoner, similar to Insurer in this case, argued the trucking company's insurance policy did not cover the
Considering the exclusion on which the insurer relied to argue the accident and resulting property damages were not covered by that policy, i.e., "damage to or destruction of loss of cargo or property in the possession of the Insured or for which the Insured is legally responsible as carrier . . . . or bailee . . .," the Waggoner Court rejected the insurer's argument, finding;
¶ 39 Relying on the Waggoner Court's same quote from Enders, the Court of Civil Appeals in Western Casualty & Surety Co. v. J.R. Adams, Inc., 1970 OK CIV APP 4, ¶ 14, 465 P.2d 794, 796, reached the same conclusion regarding the insurer's liability to cover property damages to construction equipment and trailer for which its owner had hired the insured motor carrier to transport. While "pulling" the equipment and trailer, the insured motor carrier in Western Casualty negligently drove the owner's equipment and trailer into a highway overpass causing severe damages to the equipment. Like Waggoner, the insurer had issued a § 169 liability policy to a Class B motor carrier and argued its policy's terms excluded coverage to "injury to or destruction of * * *(3)* * *property in the care, custody, or control of the insured or property as to which the insured for any purpose is exercising physical control." (Emphasis added.) The insurer also attempted to argue, as a bar to liability, language in the policy's motor carrier endorsement, "It is agreed and understood that the words `Damages to Property' as used in this endorsement shall be construed to cover any and all property, except property of such insured, or carried in or on the motor vehicle belonging to or controlled by the insured." (Emphasis added.) The Court in Western Casualty affirmed the trial court's judgment in favor of the plaintiff/property owner, finding "the policy of insurance having been filed pursuant to the statute, 47 O.S.1961, [§ 169, as then in force, the statute becomes a part of the contract of coverage and the terms of the statute control as to the character of said coverage." Although differently phrased, the policy exclusions in Waggoner and Western Casualty each attempted to eliminate liability coverage for property in the possession or control and damaged during operation of a motor carrier's business, the very circumstances for which [§] 169 mandated such coverage.
¶ 40 Similar to the pre-1995 and 1995 versions of § 169, § 230.30(A) of the MCA mandates "no license shall be issued by the [Oklahoma Corporation] Commission to any carrier until after the carrier shall have filed with the Commission a liability insurance policy or bond covering public liability and property damage . . ." Identical to the language in § 169 relied on by the Court in
¶ 41 Further, pursuant to the Form F motor carrier liability endorsement in this case, Insurer and Triple J agreed that "the certification of the policy, as proof of financial responsibility under the provisions of any State motor carrier law . . . amends the policy to provide insurance for automobile bodily injury and property damage liability in accordance with the provisions of such law . . . to the extent of the coverage and limits of liability required thereby." (Emphasis added.)
¶ 42 Like the owner of the damaged drilling rig in Waggoner and the owner of damaged construction equipment in Western Casualty, each of whom sued the respective tortfeasor motor carrier for only property damages, AEC was not involved in the specific accident with Triple J during which AEC's transformer and trailer were damaged while being transported by Triple J, who was undisputedly operating as a motor carrier at the time. Therefore, Waggoner clearly supports long standing Oklahoma precedent holding motor carrier liability insurance required by § 169 was intended to protect "the shipping and general public," not only the traveling public. 47 O.S.2001 § 162; see also Tri-State Insurance Company v. J.O. Hobbs, 1959 OK 243, ¶ 0, 347 P.2d 226, 227; Utilities Ins. Co. v. Potter, 1940 OK 127, 105 P.2d 259, cert. dismissed 312 U.S. 662, 61 S.Ct. 804, 85 L.Ed. 1109.
¶ 43 Further, the regulations mandated for motor carriers and private carriers by the MCA indicate the Legislature's clear intent for the same protections as that intended by § 169. See 47 O.S.2001 § 230.22 ("it is necessary in the `public interest' to regulate transportation by motor carriers and privates carriers . . . [and] to recognize the need of [both carriers] to have adequate insurance. . . [and] to provide service in a safe and efficient manner.) Our interpretation is also supported by the similarities in the authority vested in the OCC to enforce these statutes. See 47 O.S.2001 § 162 and 47 O.S.2001 § 230.24.
¶ 44 Finally, although no exclusion similar to Exclusion B.11. "Pollutants" was at issue in either Waggoner or Western Casualty, we find further support for applying Waggoner to that exclusion based on the Legislature's since-added protection to the MCA, i.e., "to establish that operations of [both carriers] will not have a detrimental impact on the environment." This language clearly and unambiguously provides for joint liability of motor carriers and their insurers, as in this case, for damages to the environment arising from the transportation of pollutants or property containing pollutants.
¶ 45 Because Exclusions B.6. and B.11. each similarly attempt to eliminate coverage contrary to § 230.30(A), we conclude, based on Waggoner and the intent and stated purposes for the MCA, that the Policy's Form F became part of the Policy and controls over these two exclusions. Albeit for other grounds, we affirm the court's summary adjudication in favor of AEC based on Exclusions B.6. and B.11.
¶ 46 Insurer argues Exclusion B.2., "[l]iability imposed under any contract or agreement," provides no coverage "for damages as a result of a contractual obligation. By cross-motion, AEC argues the same exclusion does not apply, claiming the bailment between Superior and Triple J is an "insured contract"
¶ 48 Insurer cites no supporting authority for its interpretation of Exclusion B.2. This Court's research discovered no published state or federal court cases interpreting the identical Exclusion B.2. language, "[l]iability imposed under any contract or agreement" in any type liability policy. Our research did disclose other types of contract exclusions with Exclusion B.2.'s same and/or similar exceptions. The most similar contract exclusion to the exclusion at issue is "[l]iability assumed under any contract or agreement," or words to that effect, which version has most commonly been interpreted in the context of commercial general liability insurance (CGLI) policies. In such policies, the Texas Supreme Court found a split of authority on its interpretation in Gilbert Texas Construction, L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 129-133 (2010), with several courts applying the exclusion only to contracts in which the insured has assumed another's liability, e.g., indemnity or hold-harmless agreements, and other courts, including the Texas Supreme Court, interpreting the exclusion without any such limitation, i.e., no coverage for a contract-based claim.
¶ 49 In 1991, the Oklahoma Supreme Court in Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 5, 812 P.2d 372, 374, interpreted an exclusion in a CGLI policy almost identical to the version addressed by the Texas Supreme Court, i.e., "liability assumed by the Insured under contract or agreement except an incidental contract." and essentially reached the same conclusion.
¶ 50 The Policy does not define the term "imposed" as used in Exclusion B.2. As a verb, its common definition is "to cause or to be burdened . . . to force one to submit . . . [or] to establish or create (something unwanted) in a forceful way." Webster's Third International Dictionary, p. 1136. Based on Dodson and the plain and unambiguous terms of Exclusion B.2. in this case, we conclude it "removes from coverage any cause of action grounded on a liability arising under contract or agreement," i.e., contract-based claims. We further find that Exclusion B.2. applies here unless one of its two exceptions "reserves coverage," see Dodson, 1991 OK 24, ¶ 14, 812 P.2d 372, or "brings a claim back into coverage," see Gilbert Texas Construction, 327 S.W.3d at 133.
¶ 51 In this case, the contract upon which Insurer solely relies to invoke Exclusion B.2. to deny coverage to Triple J is the "bailment agreement" with Superior to return the transformer and trailer back to AEC. It is undisputed there was no written bailment agreement between those two parties whose terms would control over one implied by law. Chambers v. Morgan, 1983 OK CIV APP 59, ¶ 6, 671 P.2d 89 (citing Oklahoma Petroleum & Gasoline Co. v. Winship, 1921 OK 293, 83 Okla. 146, 200 P. 844).
¶ 52 AEC relies on the same bailment agreement to invoke the first exception of Exclusion B.2., which exclusion the Policy expressly states "does not apply to liability for damages . . . a. [a]ssumed in a contract or
¶ 53 In this case, Insurer denied AEC's allegation in its second amended petition that Superior "agreed to . . . assume any and all liability for the transformer" in its rental contract with AEC, and neither the rental contract nor other evidentiary support for Superior's alleged assumption is included in the accelerated record. Further, AEC has not produced any evidentiary support for the existence of a master service agreement or other contract between Triple J and Superior which AEC contends might also qualify as an "insured contract." As cross-movant for summary adjudication on the issue of Insurer's liability under the Policy, AEC has failed to establish application of exception a. to Exclusion B.2.
¶ 54 However, the same may not be said about Exception b. to Exclusion B.2. As previously noted, Exclusion B.2. does not apply to "liability for damages . . . b. That the `insured' would have in, the absence of the contract or agreement." Aside from the implied bailment agreement, Triple J would be liable for the property damages to AEC's transformer by general common law negligence and under Oklahoma's Motor Carrier regulations by virtue of the Form F attached to the Policy. Therefore, Exclusion B.2. is inapplicable due to reservation of coverage by Exception b. Having previously concluded the motor carrier liability endorsement issued to Triple J as required by § 230.30 controls over and replaces Exclusions B.6. and B.11., we find Insurer liable under the Policy.
¶ 55 The trial court's summary adjudication in favor of AEC is
JOPLIN, P.J., and BUETTNER, J., concur.
We do not rely on the above ruling due to several inconsistencies. First, the trial court does not expressly rule out Exclusion B.6. although argued by Insurer. However, the court's coverage finding partly based on Triple J's "control" of AEC's property when the damage occurred, alone, triggers that exclusion and therefore appears inconsistent with both denial of Insurer's motion and granting of AEC's cross-motion. Further, even if we assume by the trial court's reference to "Policy exclusion of `insured contract'" that he instead meant to say, "Policy exception of `insured contract,'" his finding that the latter is "inapplicable as a carve out of the contracts exclusion" is basically a finding that Exclusion B.2. excludes coverage. This too would be inconsistent with his denial of Insurer's motion and granting of AEC's cross-motion.
