Sinclair Wyoming Refining Co. v. Infrassure ( 2021 )

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS June 15, 2021
Christopher M. Wolpert
TENTH CIRCUIT Clerk of Court
SINCLAIR WYOMING REFINING
COMPANY,
Plaintiff - Appellant,
No. 19-8017
v. (D.C. No. 2:15-CV-00194-NDF)
(D. Wyo.)
INFRASSURE, LTD.,
Defendant - Appellee.
ORDER AND JUDGMENT *
Before TYMKOVICH, Chief Judge, BACHARACH, and CARSON, Circuit
Judges.
We abated this appeal and certified a question to the Wyoming Supreme
Court regarding Wyoming law on the award of attorney fees in insurance matters.
Once the Wyoming Supreme Court obliged us with an answer, the abatement was
lifted. We now reverse the district court and remand for further proceedings.
*
This order and judgment is not binding precedent except under the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.
This appeal arises out of an insurance dispute between Sinclair Wyoming
and one of its insurers, Infrassure. Sinclair Wyoming and its parent companies
(generally, Sinclair) are incorporated in Wyoming, where Sinclair’s refineries are
located. To insure its refineries for 2013, Sinclair solicited an all-risk insurance
policy (the Policy) on the London market. Eighteen insurers subscribed to
provide coverage under the Policy. Infrassure, one of the eighteen, assumed
several liability for 7.5% of any covered loss. The Policy covers fire damage, as
well as certain business interruption losses caused by fire.
The Policy lists The Sinclair Companies as the “first named insured,” see
Aplt. App. at 123, and acknowledges it is “a Wyoming Corporation,” see Aplt.
App. at 155. But the Policy lists only a Utah address for Sinclair, not a Wyoming
one. And although the Policy lists a number of The Sinclair Companies’
subsidiaries, including Sinclair Wyoming, as named insureds, see Aplt. App. at
155, the only address provided is the Utah one.
After a fire at Sinclair’s Wyoming refinery, Sinclair filed a claim under the
Policy. Over the course of about a year and a half, Sinclair settled its claim with
the other seventeen insurers, but Infrassure refused to pay its share of the
settlement amount. Infrassure objected to the calculation of Sinclair’s covered
business interruption losses. Subsequently, a lawsuit between Sinclair and
Infrassure ensued in the federal district court for the District of Wyoming.
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In the context of this litigation, Sinclair brought a claim for attorney fees
under Wyo. Stat. Ann. § 26-15-124(c), which provides for an award of attorney
fees against an insurer if the insurer’s refusal to pay a covered amount is
“unreasonable or without cause.” But Infrassure argued this statute was
unavailable to Sinclair because the gateway provision for the Wyoming insurance
code, Wyo. Stat. Ann. § 26-15-101, only applies to policies that have been
“delivered” or “issued for delivery” in Wyoming. Because Sinclair’s complaint
had not alleged that the Policy was issued for delivery or delivered in Wyoming,
argued Infrassure, Sinclair’s claim for attorney fees should be dismissed.
The district court agreed with Infrassure and granted Infrassure’s motion to
dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim. The district court recognized that the Wyoming courts had not yet
addressed the issue, so it reasoned that the terms “delivered” and “issued for
delivery” required an indication that the parties intended the Policy to be
delivered in Wyoming. It found that merely covering property or risks located in
Wyoming was insufficient to trigger application of the Wyoming insurance code.
Sinclair appealed.
Finding that the Wyoming Supreme Court was best suited to resolve this
Wyoming statutory interpretation issue with potentially broad impact on the
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applicability of the Wyoming insurance code, we asked the Wyoming Supreme
Court to consider the following certified question of law:
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?
The Wyoming Supreme Court exercised its discretion under Rule 11 of the
Wyoming Rules of Appellate Procedure to accept the question, and it answered
the question in the affirmative. It held:
We conclude the statute clearly and unambiguously
provides that an insurance contract is issued for delivery
in Wyoming if the policy issued is intended to protect an
insured in Wyoming against risks in Wyoming. The
plain meaning of the terms “delivery” and “issue,” as
well as the overall purpose of the Wyoming Insurance
Code, support this meaning.
Sinclair Wyoming Ref. Co. v. Infrassure, Ltd, __ P.3d __, 2021 WL 1850892, at
__ (Wyo. May 10, 2021). In response, the parties filed a stipulated motion to
remand to the district court for further proceedings on Sinclair Wyoming’s claim
pursuant to Wyo. Stat. Ann. § 26-15-124(c).
Because the Policy applies to—as relevant here—Sinclair Wyoming and its
Wyoming refinery, the district court erred in entering summary judgment for
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Infrassure on the matter of attorney fees. We therefore reverse and grant the
stipulated motion to remand.
Entered for the Court
Timothy M. Tymkovich
Chief Judge
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