author: WATT, Viee Chief Justice.

text:
    2001 OK 63
    Vernon L. DANIELS, Plaintiff-Appellant, v. UNION BAPTIST ASSOCIATION and Tom Cole, Defendants-Appellees. and Parkview Baptist Church, Inc., New Covenant Baptist Church, Inc., Duane Cowdin, Shirley Cowdin, Gerald Clark, and Cyndi Dyer, Defendants.
    No. 94,671.
    Supreme Court of Oklahoma.
    July 3, 2001.
    Rehearing Denied Oct. 15, 2002.

      William C. Hall, Jr., Norman, OK, for Plaintiff-Appellant.
    Michael E. Smith, Holloway, Dobson, Bachman & Jennings, Oklahoma City, OK, for Defendants-Appellees.
   OPINION

WATT, Viee Chief Justice.

FACTS AND PROCEDURAL BACKGROUND

T1 Only two defendants in this suit, Reverend Tom Cole and Union Baptist Association, are parties to this appeal. The claims against the other defendants, Parkview Baptist Church, Inc., New Covenant Baptist Church, Inc., Duane Cowdin, Shirley Cowdin, Gerald Clark, and Cyndi Dyer, remain pending in the trial court. The trial court certified its order granting summary judgment to Reverend Cole and Union Baptist Association for immediate appeal under 12 O.S. Supp.2000 § 994.

12 On February 19, 1997, at a business meeting of Parkview Baptist Church, Inc., a majority of the Parkview members in attendance voted to replace plaintiff-appellant, Reverend Vernon E. Daniels, as Parkview's pastor. At the unanimous request of those in attendance at the meeting, Defendant Ap-pellee, Reverend Tom Cole, had been asked to serve as moderator of the meeting. Reverend Cole was the Director of Missions for Defendant Appellee, Union Baptist Association. Union Baptist Association is an association of Baptist churches, which at that time included Parkview.

13 Some eight or nine Parkview members had met with Reverend Cole twice before the February 19, 1997 meeting, onee in January and again in early February 1997. The Parkview members had discussed with Reverend Cole their desire to replace Reverend Daniels as Parkview's pastor. Reverend Cole testified in his deposition that in those meetings the Parkview members had told him that a woman in the church "was threatening to bring charges against [Reverend Daniels] for sexual harassment." At the see-ond meeting the Parkview members asked Reverend Cole to moderate a business meeting to discuss their dissatisfaction with Reverend Daniels, which Reverend Cole agreed to do only "if the church voted to do so." Reverend Cole also testified that he tells members of individual churches who consult him about problems with their pastors,

. that I cannot resolve it for them. They are an autonomous church and they make their decisions. Nobody tells them what their decision is. I certainly do not.

In this connection, it is undisputed that Park-view was an autonomous church and that neither Union Baptist Association nor Reverend Cole had any authority to decide either who Parkview's pastor would be or to direct the procedures that Parkview's members would use to implement such a change.

T4 Reverend Daniels sued on the ground that he was replaced as Parkview's pastor as a result of intentional and negligent acts of Reverend Cole, Union Baptist Association, and the other defendants. The trial court granted summary judgment for Reverend Cole and Union Baptist Association on the ground that it lacked subject matter jurisdiction because Reverend Daniels claims against them involved ecclesiastical matters. The trial court held that the acts of the defendants were carried out in the context of church business and did not involve property rights under Oklahoma law. The trial court also held that there was no factual basis to support Reverend Daniels' tort claims.

T5 ISSUES

I. Did the trial court correctly hold that Reverend Daniels claim for damages against Reverend Cole and Union Baptist Association was ecclesiastical in nature and did not involve property rights?

Did the trial court correctly hold that the facts failed to present a disputed issue of material fact as to whether Reverend Daniels had a tort cause of action against Reverend Cole and Union Baptist Association?

We answer "yes" to both questions.

I.

16 Reverend Cole and Union Baptist Association contend that Reverend Daniels' claims against them are not reviewable by Oklahoma courts because Reverend Daniels claims arise in an ecclesiastical setting. We agree. In Serbian Eastern Orthodox Diocese for the United States of America and Canada v. Milivojevich, 426 U.S. 696, 718, 96 S.Ct. 2372, 2382, 49 L.Ed.2d 151 (1976), the U.S. Supreme Court reversed the Supreme Court of Illinois, which had held that a chureh's proceedings to remove a bishop violated the church's regulations and were, therefore, "arbitrary." The Supreme Court held that the Illinois courts' inquiry into whether the church's decisions on matters of "discipline, faith, internal organization, or ecclesiastical rule, custom, or law" was prohibited because,

For civil courts to analyze whether the ecclesiastical actions of a church judicatory are in that sense "arbitrary" must inherently entail inquiry into the procedures that cannon or ecclesiastical law supposedly required the church judicatory to follow, or else in to the substantive criteria by which they are supposedly to decide the ecclesiastical question. But this is exactly the inquiry that the first Amendment prohibits; recogmition of such an exception would undermine the general rule that religious controversies are not the proper subject of civil court inquiry, and that a civil court must accept the ecclesiastical decisions of church tribunals as it finds them.

[Emphasis added.]

T7 In Fowler v. Bailey, 1992 OK 160 ¶ 10, 844 P.2d 141, 145 we acknowledged that Mi-livojevich establishes "as fundamental the position that a church's decision as to the status of a person's church membership must be considered as binding and beyond the reviewing power of courts such as ours." Reverend Daniels argues that the rule applies only to hierarchical churches and not to churches like Parkview, which had an autonomous congregational form of government, that is one that was independent and not subject to oversight by a church hierarchy. We addressed this issue in Guinn v. Church of Christ of Collinsville, 1989 OK 8, note 18, 775 P.2d 766, 772. There we noted that decisions made by autonomous congregational churches "are no less fair or deserving of judicial deference than decisions made by churches structured in a hierarchical fashion. The lack of a congregation's own 'religious' court of appeals is not justification for the intervention and review by a civil tribunal." Thus, we hold that congregational churches such as Parkview are no more subject to judicial oversight than are ones with a hierarchical form of government.

18 Reverend Daniels claims, however, that Fowler stands for the proposition that, because Reverend Daniels is asserting a property right, Oklahoma courts should enforce them against Reverend Cole and Union Baptist Association. We disagree.

T9 While it is true that, in a proper case, courts will protect property rights in an ecclesiastical setting, this is not a case where such an exception would arise. In Fowler we observed that courts will resolve property disputes "between rival factions of a church." 844 P.2d 141, 1992 OK 160 ¶6. [Emphasis added.] Indeed, we have found no case involving disputes over church property in which all the parties were not church members or church officials, all of whom either claimed some right to the property at issue or the power to control it. Here, the record will not support the claim that Reverend Cole and Union Baptist Association had any interest in or control over Reverend Daniels's unpaid past wages or his expectancy of continued employment by Parkview.

'I 10 Union Baptist Association, through its agent, Reverend Cole, presided over the Parkview business meeting on February 19, 1997, at the request of several of its members. Only after a unanimous vote of those present at that meeting did Reverend Cole agree to moderate the meeting. Comprehensive minutes of that meeting are in the ree-ord. We note that seven of the Parkview members of the twenty-one persons present at the business meeting voted against the motion to replace Reverend Daniels. Even the seven members who resisted Reverend Daniels' replacement as pastor, including Parkview's assistant pastor, Bill Blair, approved Reverend Cole's presiding over the meeting. The minutes of the meeting make clear that Reverend Cole made no attempt to exert any influence on any decision made at the meeting.

1 11 We hold that the Reverend Cole's act of presiding over Parkview's February 19, 1997 business meeting was exempt from judicial scrutiny because it occurred in an ecclesiastical setting. Reverend Cole acted as Union Baptist Association's Director of Missions at the behest of one of the Association's member churches. The exception to the rule we recognized in Fowler does not apply to either Reverend Cole or Union Baptist Association because neither had any power to replace Reverend Daniels as Parkview's pastor. Further, for the reasons discussed in part II of this opinion, neither Reverend Cole nor Union Baptist Association owed a duty to Reverend Daniels to take affirmative steps to help him keep his job. We expressly decline to address the issue of whether the Milivoje-vich rule or the Fowler exeeption to that rule applies with respect to the defendants in this case who are not parties to this appeal.

IL.

112 Reverend Daniels contends that Reverend Cole and Union Baptist Association committed two torts against him: (1) malicious interference with contract, and (2) negligence. We hold that the facts presented by the record in this appeal support neither theory.

¶13 In Mac Adjustment, Inc. v. Property Loss Research Bureau, 1979 OK 41 ¶ 5, 595 P.2d 427, 428 we identified the elements necessary to establish a cause of action for malicious interference with contract or business relations:

In order to recover in such an action, a plaintiff must show:
1. That he or she had a business or contractual right that was interfered with.
2. That the interference was malicious and wrongful, and that such interference was neither justified, privileged nor excusable.
3. That damage was proximately sustained as a result of the complained of interference.

{14 The facts in Mac Adjustment are instructive here. Mac was in the business of adjusting insurance claims for insurance companies. One of the companies for which Mac did work was Mutual of Towa. Iowa Mutual belonged to defendant Property Loss Research Bureau, which was an unineorpo-rated association of one-hundred insurance companies. It was undisputed that Bureau had no authority to decide which adjustment companies handled its members adjustment business. Towa Mutual withdrew its business from Mac after Bureau investigated Mac's handling of Mutual's claims and found them "questionable." We reversed a jury verdict that had been returned in favor of Mac on the ground that the facts presented were, as a matter of law, insufficient to support a cause of action for malicious interference with contract. We held:

... Although the fact that Bureau's report to Iowa Mutual Insurance Company may have caused Iowa Mutual to investigate Mac's handling of their business, no malicious or wrongful intent was shown. Here, the Bureau was merely performing its investigative service for one of its member compamies and would not benefit in any way by the continuance or termination of Mac's accounts ....

[Emphasis added.] 595 P.2d 427, 1979 OK 41 at 1 15.

Here, as in Mac Adjustment, defendants did the acts about which Reverend Daniels complains at the behest of third parties and those acts were not shown to have been calculated to benefit either Reverend Cole or Union Baptist Association. Reverend Daniels argues that a $100.00 payment Parkview made to Reverend Cole in March 1997 and an increase in Parkview's payments to Union Baptist Association from $40.00 per month to $86.00 per month after Parkview's members replaced Reverend Daniels was sufficient to make a prima facie case for intentional interference. We disagree. Reverend Cole was paid a modest stipend for moderating the meeting. The record is undisputed that the payments to Union Baptist Association were supposed to equal four percent of Sunday school offerings each month. Reverend Daniels has not shown that the amounts paid by Parkview and later its successor, New Covenant, exceeded this amount. We hold, therefore, that the fact of these payments does not support the necessary conclusion that Union Baptist Association, through its agent Reverend Cole, acted as they did for the purpose of benefitting themselves.

116 As an alternative to his malicious interference with contract claim, Reverend Daniels takes the position that Union Baptist Association and its agent, Reverend Cole, were negligent because Reverend Cole moderated the meeting at which Parkview's members made the decision to replace Reverend Daniels as Parkview's pastor. Reverend Daniels relies on one sentence in a brochure for Union Baptist Association's annual meeting in October 1999, which described Reverend Cole as "a pastor to the pastors of Union Association." The entire paragraph, however, read as follows:

Dr. Tom Cole is the Executive Director of Missions for Union Baptist Association. He has served Union Baptist Association for more than ten years. One of the many significant ministries he performs is to be a pastor to the pastors of Union Association. When a pastor needs advice or a listening ear, he can turn to Tom for prayer support, encouragement and Biblical help. There are also times when a congregation is without a pastor and they can turn to Tom for assistance in their search for God's man to lead their congregation.

17 Reverend Daniels claims that the de-seription of Reverend Cole as "pastor to the pastors" in Union Baptist Association's brochure would support a jury's finding that Union Baptist Association through its agent Reverend Cole had undertaken a duty to be an advocate on the Reverend Daniels's behalf. To reach such a conclusion, however, one would first have to assume that Reverend Cole had a duty to Reverend Daniels to seek to resist his replacement as Parkview's pastor, although it was clear that many Park-view members wanted Reverend Daniels replaced. Reverend Cole undertook only to be an unbiased moderator of a church business meeting. The minutes of the February 19, 1997 meeting reflect that Reverend Cole carried out that duty. Reverend Cole had been told that there was a claim of sexual harassment against Reverend Daniels from a Park-view member. Under these cireumstances, Reverend Cole's duty was to Parkview itself, not to either Reverend Daniels or those Parkview members who wanted Reverend Daniels replaced. We hold, therefore, that Reverend Daniels cannot be subjected to tort liability because he did not take sides in the dispute.

118 It is fundamental that before one may be held liable for negligence he must have owed a duty to the plaintiff, Grover v. Superior Welding, Inc., 1995 OK 14 15, 8983 P.2d 500, 502. For the reasons previously stated, we find that there are no facts in this record that could support an inference that Reverend Cole or Union Baptist Association had a duty to advocate Reverend Daniels's case.

SUMMARY

1 19 Reverend Cole and Union Baptist Association are exempt from judicial scrutiny for claims arising as a result of Reverend Cole's having moderated Parkview's February 19, 1997 business meeting. Reverend Cole and Union Baptist Association were acting in aid of a member church and neither had any authority to cause the replacement of Reverend Daniels as Parkview's pastor and the record is clear that they made no attempt to exert influence over Parkview's deliberations on this score.

120 Union Baptist Association and Reverend Cole had rothing to gain either from Reverend Daniels' replacement or his retention. Thus, Reverend Daniels's malicious interference with contract claim is insupportable. Similarly, Reverend Daniels's negligence claim must fail, too, because Reverend Cole owed no duty to Reverend Daniels to help Reverend Daniels retain his job. Reverend Cole's duty was to Parkview and he discharged that duty by moderating Parkview's business meeting in an unbiased way, taking sides with neither the faction of Parkview's members that wanted Reverend Daniels replaced nor the faction that wanted him retained.

T21 CERTIORARI GRANTED, COURT OF CIVIL APPEALS' OPINION VACATED, JUDGMENT OF THE DISTRICT COURT AFFIRMED.

1 22 HARGRAVE, C.J., WATT, V.C.J., HODGES, LAVENDER, OPALA, SUMMERS, BOUDREAU, and WINCHESTER, JJ.-coneur.

1 23 KAUGER, J.-concurs in result.


source: Caselaw Access Project

author: WINCHESTER, J. BOUDREAU, J.,

license: Public Domain

text:
    2002 OK 15
    Charles REDCORN, Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, and State Farm General Insurance Company, Defendants.
    No. 96,562.
    Supreme Court of Oklahoma.
    March 12, 2002.
    Rehearing Denied Sept. 10, 2002.

      Michael W. Hinkle, Oklahoma City, OK; Reggie N. Whitten, Jason E. Roselius, Whit-ten, Nelson, McGuire, Wood, Terry Roselius & Detrich, Oklahoma City, OK; Jack Mat-tingly, Sr., Jack Mattingly, Jr., Mattingly, Snow & Mattingly, Seminole, OK; Attorneys for Plaintiffs.
    Richard C. Ford, Rustin J. Strubhar, Crowe & Dunlevy, Attorneys for State Farm Fire & Casualty Company, Defendant.
    Burck Bailey, Eric S8. Eissenstat, Dino E. Viera, Fellers, Snider, Blankenship, Bailey & Tippens, Attorneys for Amici Curiae Farmers Insurance Company, Inc. and Mid-Century Insurance Company.
    John T. Edwards, Shannon L. Edwards, Monnet, Hayes, Bullis, Thompson & Edwards, Attorneys for Amici Curiae James E. Davis, Virginia Calame and Elden Branch.
   WINCHESTER, J.

11 The United States District Court for the Western District of the State of Oklahoma has certified the following question: "In determining actual cash value, using the replacement costs less depreciation method, may labor costs be depreciated?" We answer that a roof is a single product consisting of both materials and labor, and that pursuant to the "broad evidence rule," which allows a fact-finder to consider the age and condition of the roof, depreciation of the whole product is appropriate. Because labor is a part of the whole product, it is included in the depreciation of the roof.

[2 The federal district court has provided a joint statement of agreed facts by the parties. The plaintiff, Charles Redecorn, purchased a homeowner's policy from State Farm Fire and Casualty Company, one of the defendants. Redeorn's policy provided for roof surface repair and replacement coverage on an actual cash value basis. His policy includes an endorsement entitled "ROOF SURFACE LOSSES-ACTUAL CASH VALUE ENDORSEMENT:

"Roof Surfaces: We will pay the actual cash value at the time of loss for loss or damage to roof surfaces. We will not pay an amount exceeding that which you actually and necessarily spend to repair or replace the damaged roof."

Redceorn's policy does not define "actual cash value" nor does it prescribe means for determining actual cash value.

13 On November 9, 1998, Redcorn's roof was damaged by either a windstorm or hail. On February 11, 1999, State Farm issued a payment for the actual cash value of the damage to the roof,. The payment was caleu-lated by determining the replacement cost, including materials and labor, and depreciating it. Redcorn contends that Oklahoma law permits actual cash value to be measured by replacement cost less depreciation, but he advocates separating the cost of the roof replacement into components of materials and labor, and depreciating only the materials. The federal district court cited two federal district court cases that are now on appeal which address the same issue, Davis v. Mid Century Ins. Co., CIV-96-2070-T (W.D.Okla. March 26, 1998) (Westlaw 1998 WL 1285714), and Branch v. Farmers Ins. Co., 123 F.Supp.2d 590 (W.D.Okla.2000). The district court additionally observes that there have been numerous other lawsuits raising the same issue. The United States Court of Appeals for the Tenth Circuit has certified similar questions to this Court in case number 96,790, 55 P.3d 1023. The answers to these questions are handed down contemporaneously with the answer to the federal district court question in this case.

14 To answer the question submitted by the federal court, we must construe the term "actual cash value." An insurance policy is a contract. The same principles generally apply to the construction of a policy of insurance as apply to any adhesion contract. Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 10, 812 P.2d 372, 376. Wiley v. Travelers Ins. Co., 1974 OK 147, 16, 534 P.2d 1293, 1295, reviews certain established rules for construing terms in insurance policies. Parties to a contract for insurance are free to choose the risks to be covered by the policy. Onee agreed upon, the parties are bound by the terms of the contract; and courts will not rewrite those terms. The construction of a policy should be natural and reasonable, viewed in the light of common sense. The result should not be absurd. The interpretation of an insurance contract and whether it is ambiguous is a matter of law that will be resolved by the court. Dodson, 1991 OK 24, ¶ 12, 812 P.2d at 376.

15 Subsection B of 36 0.8.S8upp.2000, § 4808, provides that "no policy or contract of fire insurance shall be made, issued or delivered by any insurer or by any agent or representative thereof, on any property in the state, unless it shall conform as to all provisions, stipulations, agreements and conditions, with such form of policy." The standard fire insurance policy found in subsection G uses the term "actual cash value." That term has a specific meaning that has been construed by this Court, and is not ambiguous.

T6 The fact that "actual cash value" is part of an endorsement in Redeorn's policy insuring roof surfaces for a hazard other than fire or lightening, does not affect the construction of the term. An endorsement that is not a part of the standard fire policy and which insures against other perils is permitted by 36 O.S.Supp.2000, § 4803 (C) Though the term "actual cash value" is used in a permitted endorsement, it may not be given a different meaning than that used in the standard fire policy. Any other rule would create confusion and unnecessary ambiguity.

17 Actual cash value in Oklahoma is determined by the "broad evidence rule" as described in Rochester American Ins. Co. v. Short, 1953 OK 4, 252 P.2d 490. The Court-approved Syllabus in Rochester American Ins. Co., 1953 OK 4, ¶0, 252 P.2d at 490, explains the relation between actual cash value and the broad evidence rule. Syllabus 8 provides that actual cash value of a building totally destroyed by fire is a matter of fact to be determined by a consideration of all relevant factors and cireumstances existing at the time of loss. Some relevant factors listed in Rochester include purchase price, replacement cost, appreciation or depreciation, the age of the building, the condition in which it has been maintained and market value. Rochester American Ins. Co., 1953 OK 4, ¶¶ 11-18, 252 P.2d at 493-494.

18 In rejecting the plaintiff's argument that cost of reproduction was the exclusive measure of recovery, Rochester American Ins. Co. quoted McAnarney v. Newark Fire Ins. Co., 247 N.Y. 176, 159 N.E. 902, 56 A.L.R. 1149, that "Indemnity is the basis and foundation of insurance law." The goal of indemnity is to place the insured in as good a condition, so far as practicable, as he would have been if no fire had occurred. McAnar-ney added that to effectuate complete indemnity, every fact and cireumstance tending to aid in formation of a correct estimate of the loss should be considered by the trier of fact. McAnarney, 247 N.Y. at 184, 159 N.E. at 904-905.

I 9 Like this Court in Rochester American Ins. Co., the Supreme Court of Indiana also quoted McAnarney in deciding Travelers Indemmity Co. v. Armstrong, 442 N.E.2d 349 (Ind.1982). That case cited four methods in determining actual cash value of losses, but identified the fourth test, the broad evidence rule originating with MceAnarney, as the majority rule. Travelers Indemmity Co., 442 N.E.2d at 356. The Indiana court called the broad evidence rule a flexible rule that permitted an appraiser, court, or Jury to consider any relevant factor in determining actual cash value of damaged property. Travelers Indemnity Co., 442 N.E.2d at 356.

[10 Redcorn insists that depreciation of labor costs is inconsistent with the principle of indemnity. He argues that to be indemnified the materials for a roof may be depreciated, but not the labor to put the roof in place. If he were put in the same position as he was before his roof was destroyed, his replacement roof would have shingles the same age and in the same condition as before the damage. He theorizes that if it were possible to purchase depreciated shingles, the cost of the labor to install them would be the same as the cost of installing new shingles. He concludes that while the insurer is entitled to depreciate the cost of the materials for a roof, the cost of labor should be paid without any adjustment.

11 A roof does not have a separate market value from the building it covers. The relevant evidence for determining actual cash value for a roof would include cost of reproduction, the age of the roof, and the condition in which it has been maintained. A building is the product of both materials and labor. The age and condition of the building were considered relevant facts in the Rochester American Ins. Co. case. Likewise, a roof is the product of materials and labor, and its age and condition are also relevant facts in setting the amount of a loss.

12 Depreciation in insurance law is not the type that is charged off the books of a business establishment, but rather it is the actual deterioration of a structure by reason of age, and physical wear and tear, computed at the time of the loss. Travelers Indemmity Co., 442 N.E.2d at 353. For example, if a roof has an expected life-span of twenty years, and it is near the end of that time but could be expected to last five more years, given its condition, that is a fact to be considered in setting the amount of a loss. Likewise, if a roof is in worse condition than would be expected from its age, that is also a factor to be considered.

{13 Despite the objections of Redcorn, indemnity is served by considering the age and condition of a roof, both materials and labor, in setting an amount of loss. To meet the goal of indemnity, Redeorn should be placed, as nearly as practicable, in the same condition as he was in just prior to the insured loss. Pursuant to the broad evidence rule, a fact-finder is entitled to consider what the life of the destroyed roof, both materials and labor, would have been, as well as any other relevant evidence presented. In Rochester American Ins. Co., 1958 OK 4, 119, 252 P.2d at 492, the Court observed that the jury instruction stated that the actual cash value of a building is the cost of replacing the building with material of like kind and quality less depreciation, and that the amount of depreciation was to be determined by considering the age of the building, the condition in which it had been maintained, changes in the neighborhood and any other facts and circumstances in evidence that affected the value of the property, including the viewing of the premises by the jury. When the Rock-ester Court mentions replacing the building with material of like kind and quality, replacing necessarily includes labor.

1 14 Redeorn chose an "actual cash value" policy, and paid premiums based on his choice. He insured a roof surface, not two components, material and labor. He did not pay for a hybrid policy of actual cash value for roofing materials and replacement costs for labor. To construe the policy in such a manner would unjustly enrich the policy holder.

4 15 In summary, actual cash value is determined by the broad evidence rule. That rule requires that all relevant evidence be considered in determining a loss. A roof is the product of both materials and labor just as a building is the product of both materials and labor. Age and condition of a roof is relevant evidence in determining actual cash value.

16 CERTIFIED QUESTION ANSWERED.

117 CONCUR:; HARGRAVE, C.J.; HODGES, LAVENDER, OPALA, WINCHESTER, JJ.

18 DISSENT: WATT, v.C.J. (JOINS BOUDREAU, J.); SUMMERS (BY SEPARATE WRITING AND JOINS BOUDREAU, J), BOUDREAU (BY SEPARATE WRITING), JJ.

119 RECUSED: KAUGER, J.

BOUDREAU, J.,

dissenting, WATT, V.C.J., and SUMMERS, J. joining.

1 1 I respectfully dissent.

4 2 The question certified to us is whether in Oklahoma an insurance company may depreciate the cost of labor to replace a residential roof when determining the actual cash value of the roof using the replacement cost less depreciation method. The parties advise us this is an issue of first impression not only for Oklahoma but for the entire country.

T 3 The material facts are not disputed and are found in the certification order. Charles Redcorn (Redeorn) purchased a homeowner's policy from State Farm Ins. Co. (State Farm). The policy provided for roof surface repair and replacement coverage on an actual cash value basis. The policy does not define actual cash value. A windstorm or hail damaged Redcorn's roof on November 9, 1998. State Farm concluded that the total amount of loss to the roof was $11,050. Because the roof was approximately sixteen years old, State Farm applied a depreciation factor of 80% (based on a twenty-year roof life). Subtracting 80% of the total amount of the loss, State Farm concluded the actual cash value of the roof was $2,210 ($11,050 less $8,840 equals $2,210). State Farm then reduced the actual cash value by the amount of Redeorn's deductible resulting in a payment to Redeorn of $1,960 ($2,210 less $250 equals $1,960). Redcorn sued State Farm. While he agrees State Farm properly depreciated the cost of shingles to be installed on his roof, he argues State Farm may not depreciate the cost of labor to install them.

14 The majority holds that State Farm may depreciate the cost of labor. It reaches this result by defining Redcorn's roof as a "single product consisting of both materials and labor."

15 I would resolve the issue differently. Oklahoma adopted the broad evidence rule to calculate actual cash value in Rochester American Ins. Co. v. Short, 1953 OK 4, 252 P.2d 490. The broad evidence rule permits the trier of fact to consider "any evidence logically tending to establish the correct estimate of the value of the property at the time of the loss." Zochert v. National Farmers Union Property & Casualty Co., 516 N.W.2d 531, 534 n. 2 (S.D.1998) (emphasis added); Giulietti v. Connecticut Ins. Placement Facility, 205 Conn. 424, 534 A.2d 213, 216 (1987); Brooks Realty, Inc. v. Aetna Ins. Co., 276 Minn. 245, 149 N.W.2d 494, 495 (1967); see also 12 Couch on Insurance §§ 175:33, 177:25 (3d ed.1998). Applying the rule to the issue presented in this case, we must determine whether depreciating the cost of labor to replace Redcorn's roof logically tends to establish the correct estimate of the actual cash value of the roof at the time of the loss.

T6 In making this determination, I reject the majority's characterization of Redeorn's roof as a single product. A roof, unlike a preassembled consumer good, is not an integrated product. Redeorn cannot go the lumber yard or the retail store and buy a roof. A roof does not exist until the shingles are transported to the site and installed on top of the house. A roof is not a unified product but a combination of a product (shingles) and a service (labor to install the shingles).

17 The shingles are of course logically depreciable. As they age, they certainly lose value due to wear and tear. They typically have a useful life of twenty years. It makes sense, then, that sixteen-year-old shingles have lost sixteen/twentieths, or eighty percent, of their value over time.

11 8 Labor, on the other hand, is not logically depreciable. Does labor lose value due to wear and tear? Does labor lose value over time? What is the typical depreciable life of labor? Is there a statistical table that delineates how labor loses value over time? I think the logical answers are no, no, it is not depreciable, and no. The very idea of depre-clating the value of labor is illogical. The image that comes to me is that of a very old roofer with debilitating arthritis who can barely climb a ladder or hammer a nail. The value of his labor, I suppose, has depreciated over time.

T9 It is important to keep in mind that "{ilndemnity is the basis and foundation of all insurance law." Rochester American Ins. Co., 252 P.2d at 493. The objective of indemnity is to put the insured in as good a condition, as far as practicable, as he would have been in if the loss had not occurred, that is, to reimburse the insured for the loss sustained, no more, no less. Id. To properly indemnify Redcorn, State Farm should pay him the actual cash value of the shingles, depreciated for wear and tear, plus the cost of their installation. In my view, allowing State Farm to depreciate the cost of labor would leave Redcorn with a significant out-of-pocket loss, a result that is inconsistent with the principle of indemnity.

{10 In sum, I would answer no to the certified question. I would hold that depreciating the cost of labor to install a roof does not logically tend to establish the correct estimate of the actual cash value of the roof at the time of the loss. I would respond to the certifying court that in determining actual cash value of a residential roof using the replacement cost less depreciation method, labor costs may not be depreciated.

SUMMERS, J.

1 I join in Justice Boudreau's dissenting opinion with this additional observation:

Before the damage the insured had on his house a roof with sixteen-year-old shingles. After the damage the insured is contractually entitled to have on his house sixteen-year-old shingles, or their value in money. He should not bear any of the cost of installing them, because that would deprive him of that for which he contracted-being made whole as if the damage had not occurred.

      . Section 4803 was last amended by 1993 Okla. Sess.Laws, ch. 222, § 1.

      . Title 36 O.$.$upp.2000, § 4803 (C) provides: "Appropriate forms of additional contracts, riders or endorsements, insuring against indirect or consequential loss or damage or against any one or more perils other than those of fire and lightning, or providing coverage which the insurer issuing the policy is authorized by charter and by the laws of this state to assume or issue, may be issued in connection with the standard fire policy.
      "Such other perils or coverages may include those excluded in the standard fire insurance policy, and may include any of the perils or coverages permitted to be insured against or issued by property and casualty insurers. Such forms of contracts, riders and endorsements may contain provisions and stipulations inconsistent with such standard fire insurance policy, if said provisions and stipulations are applicable only to such additional coverage or to the additional peril or perils insured against."

      . The other methods cited as minority rules are (1) Replacement cost, without deduction for depreciation, (2) The market value test, and (3) The replacement cost with deduction for depreciation. Travelers Indemnity Co., 442 N.E.2d at 355.

      . Redcorn advises us that only California, through its Department of Insurance (not through its courts), has addressed the issue. He provided copies of excerpts from a report titled "The California Department of Insurance Market Conduct Examination Report of State Farm Fire and Casualty Company (NAIC #25143) and State Farm General Insurance Company (NAIC #25151) Bloomington, Illinois." The report appears to have been prepared in early 1998. The report contains the following with respect to depreciation of labor:
      113. Depreciation of Labor Costs: While not cited as errors, the Companies depreciated labor cosis when determining ACV settlements. Labor costs should not be depreciated. This matter is referred to CDI Legal Division for review and opinion. (emphasis added).
      The report also contains the following with respect to depreciation of labor:
      Depreciation of labor: Nowhere in the claim files is it explained how any depreciation amounts are calculated, nor do the files reflect that the basis of depreciation is ever explained to the insured. Moreover, labor of subcontractors is depreciated; labor is not a depreciable item. (emphasis added)

      . For the sake of simplicity I will refer to the materials needed to replace a roof as shingles. Certainly nails and other materials are also needed.

      . New York was the first state to adopt the broad evidence rule to calculate actual cash value. See McAnarney v. Newark Fire Ins. Co., 159 N.E. 902 (N.Y.1928). For a list of other jurisdictions that have adopted the broad evidence rule, see 12 Couch on Insurance § 175:33 at n. 24.

      . Among the materials provided by Redcorn are copies of excerpts from a State Farm training manual. In several different ways the training manual suggests that labor is not a depreciable item. For example, it defines depreciation as "decrease in the value of the property over a period of time due to wear, tear and obsolescence." This definition necessarily excludes depreciation of labor. It states that "[djepreciation should be taken on a line-by-line basis from dollar one on items subject to weathering and/or wear and tear." This statement, too, necessarily excludes depreciation of labor.
      Even more interesting, the training manual shows that State Farm does not always depreciate labor. For example, the manual states that State Farm does not depreciate the additional cost of labor to install shingles on an especially steep roof ("steep charges"), does not depreciate the cost of labor to hand carry shingles to the second level of a two-story building ("two-story charges") and does not depreciate the cost of labor to tear off multiple layers of shingles when the top layer is destroyed ("tear off guidelines").

      . State Farm argues that Redcorn will realize a windfall if the cost of labor is not depreciated. According to State Farm, Redcorn will be able to postpone paying the cost of labor to replace his roof by an extra sixteen years. This argument is specious. In evaluating whether an adjusting practice accomplishes the aim of indemnity, the proper scope of inquiry focuses on a conceptual snapshot of the roof at the instant before the loss, and not on speculations about contingent betterment that may occur in the future.


text:
    2002 OK 16
    Eldon Carl BRANCH, Plaintiff, v. FARMERS INSURANCE COMPANY, INC., and Farmers Group, Inc., Defendants.
    No. 96,790.
    Supreme Court of Oklahoma.
    March 12, 2002.
    Rehearing Denied Sept. 9, 2002.

      Gary B. Homsey, Kevin Hill, Homsey, Cooper, Hill & Associates; Shannon L. Edwards, Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, OK; for Plaintiff.
    Burck Bailey, Eric S. Eissenstat, Dino E. Viera, Fellers, Snider, Blankenship, Bailey & Tippens, Oklahoma City, OK, for Defendants.
    Richard C. Ford, Rustin J. Strubhar, Crowe & Dunlevy, Attorneys for Amici Curiae State Farm Fire & Casualty Company, and State Farm General Insurance Company.
   WINCHESTER, J.

1 1 The United States Court of Appeals for the Tenth Cireuit has certified three questions of law pursuant to the Oklahoma Certification of Questions of Law Act, 20 0.8.1991, §§ 1601-1611. The court states that it has heard oral arguments in two substantially similar diversity cases appealed from the United States District Court for the Western District of Oklahoma, Branch v. Farmers Ins. Co., 123 F.Supp.2d 590 (W.D.Okla.2000), and Davis v. Mid-Century Ins. Co., CIV-96-2070-T (W.D.Okla. March 26, 1998) (Westlaw 1998 WL 1285714). The federal court informs us that it is aware of the case of Redcorn v. State Farm Fire and Casualty Co., 55 P.3d 1017 (2002). where the United States District Court for the Western District of Oklahoma has certified a question substantially similar to the first question certified by the Tenth Cireuit. The answer to the certified question in Redcorn is being handed down contemporaneously with the answers to those presently before us.

[ 2 The facts reported by the Tenth Cireuit are as follows. The plaintiffs in these cases purchased homeowner's policies from various insurance companies. Those policies provide for roof surface repair and replacement coverage and separate coverage for "debris removal" following a covered loss. Hail and wind damaged the plaintiffs' roofs causing a total loss. The insurers do not dispute coverage. The insurers determined replacement cost, including materials and labor, and reduced that amount by depreciating both those components of the total cost. The plaintiffs contend that neither the labor associated with installing a new roof, nor the labor incurred during tear-off of damaged roofs are depreciable. The Tenth Cireuit has certified the following questions:

"(1) In determining actual cash value, using the replacement costs less depreciation method, may labor costs be depreciated?
"(2) In determining replacement cost less depreciation, are labor costs of removing a damaged roof necessarily included or may roof tear-off be separately covered as 'debris removal?
"(3) If tear-off costs are properly included as necessary replacement costs and labor costs are depreciable generally, may the labor costs incurred during tear-off also be depreciated?"

T3 In the Davis case, the insurer figured the cost to tear off and replace the old damaged roof. The insurer then reduced this total amount by fifty percent for depreciation based on the roof's age in ratio to its estimated life. The plaintiffs argued that neither the labor for the tear-off, nor the labor for replacement should be subject to depreciation. In construing the plaintiffs' policy, the federal district court in Davis found that both the plaintiffs and the insurers suggested reasonable interpretations of the provisions regarding depreciation of labor. As a result, the court determined that an ambiguity existed in the policy as to whether the cost of labor associated with replacement of the roof was subject to depreciation. In that regard, the court concluded that the materials were properly subject to depreciation, but labor costs to replace the roof should not have been depreciated. Concerning the question of debris removal, representatives of the insurer testified that the damage caused to the plaintiffs' roof in this case resulted in the roof surfacing becoming debris. The court found that the plaintiffs' policy regarding debris removal was unambiguous, and that it was a separate item of coverage not subject to depreciation.

T4 Like the Davis case, the insurer in Branch depreciated the tear-off cost and the labor cost for installing a new roof to replace one that had been destroyed by wind and hail. The insurer paid the balance to the plaintiff, who was the insured. He sued, alleging that the insurer breached the terms of the insurance policy by depreciating the labor for tear off and installation. The federal district court in Branch found that tear-off costs and installation costs were reasonably likely in replacing a roof and therefore were included within the meaning of "replacement cost." The court further found that the term "replacement cost" was unambiguous, and it was proper to depreciate the cost of labor.

I. IN DETERMINING ACTUAL CASH VALUE, USING THE REPLACEMENT COSTS LESS DEPRECIATION METHOD, MAY LABOR COSTS BE DEPRECIATED?

15 The Davis case included an endorsement to the plaintiffs' policy that provided, "Loss to roof surfacing will be settled at Actual Cash Value." The Branch case provided, "[W]e will settle covered losses to the roof surfacing ... on a replacement cost less depreciation basis." The Davis policy measures the loss at "actual cash value," and the Branch policy measures the loss at "replacement cost less depreciation." The question from the Tenth Cireuit appears to make these terms equivalent, but they are not.

A. ACTUAL CASH VALUE IN DAVIS.

16 Actual cash value in Oklahoma is determined by the "broad evidence rule" as described in Rochester American Ins. Co. v. Short, 1953 OK 4, 252 P.2d 490. The Court-approved Syllabus in Rochester American Ins. Co., 1953 OK 4, 10, 252 P.2d at 490, explains the relation between actual cash value and the broad evidence rule. Syllabus 8 provides that actual cash value of a building totally destroyed by fire is a matter of fact to be determined by a consideration of all relevant factors and cireumstances existing at the time of loss. Some relevant factors listed in Rochester include purchase price, replacement cost, appreciation or depreciation, the age of the building, the condition in which it has been maintained and market value. Rochester American Ins. Co., 1958 OK 4, TM11-18, 252 P.2d at 498 494. While replacement cost and depreciation are considerations in determining actual cash value, the two terms of the Davis and Branch policies are not equivalent.

T7 The plaintiff, in Rochester American Ins. Co., argued that cost of reproduction was the exclusive measure of recovery. But the Court answered by quoting McAnarney v. Newark Fire Ins. Co., 247 N.Y. 176, 159 N.E. 902, 56 A.L.R. 1149, that "Indemnity is the basis and foundation of insurance law." The goal of indemnity is to place the insured in as good a condition, so far as practicable as he would have been if no fire had occurred. McAnarney added that to effectuate complete indemnity, every fact and circumstance tending to aid in formation of a correct estimate of the loss should be considered by the trier of fact. McAnarney, 247 N.Y. at 184, 159 N.E. at 904-905.

8 Like this Court in Rochester American Ins. Co., the Supreme Court of Indiana also quoted MceAnarney in deciding Travelers Indemnity Co. v. Armstrong, 442 N.E.2d 349 (Ind.1982). That case cited four methods in determining actual cash value of losses, but identified the fourth test, the broad evidence rule originating with MceAnarney, as the majority rule. Travelers Indemmity Co., 442 N.E.2d at 356. The Indiana court called the broad evidence rule a flexible rule that permitted an appraiser, court, or jury to consider any relevant factor in determining actual cash value of damaged property. Travelers Indemmity Co., 442 N.E.2d at 356.

T9 The Davis court found an ambiguity regarding whether the cost of labor associated with roof replacement may be depreciated in an actual-cash-value policy. This Court has previously held that the interpretation of a contract and whether it is ambiguous is a matter of law for the Court to determine and resolve accordingly. Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 12, 812 P.2d 372, 376. The term "actual cash value" is found in the standard fire insurance policy, 36 O.S.Supp. 2000, § 4803 (G). Subsection B of that statute provides that "no policy or contract of fire insurance shall be made, issued or delivered by any insurer or by any agent or representative thereof, on any property in the state, unless is shall conform as to all provisions, stipulations, agreements, and conditions, with such form of policy." Because the term "actual cash value" is a statutory term that has been construed by this Court in the Rochester American Ins. Co. case, it has a specific meaning that is not ambiguous.

11 10 The Rochester American Ins. Co. case involved the destruction of a building, in contrast to the Davis case that involves the destruction of a roof. The issue is how the broad evidence rule applies to the destruction of a roof. The Davis court found that the roof had a fixed life expectancy of twenty years. It had been in place ten years. The court concluded that replacement cost less depreciation was the primary factor to be considered in applying the broad evidence rule. This determination is permissible under the broad evidence rule. The court correctly acknowledged that the presentation of a different factual scenario could mandate that other factors be given more weight, but observed such a seenario was not before the court.

B. REPLACEMENT COST LESS DEPRECIATION IN BRANCH.

T11 Replacement cost is correctly defined by the Branch court as "the sum of those costs an insured is reasonably likely to incur in replacing his covered loss." The court cited the holding in Gilderman v. State Farm Ins. Co., 437 Pa.Super. 217, 226, 649 A.2d 941, 945 (1994). The Branch court then found that the term "replacement cost" was unambiguous and subject to only one reasonable interpretation. Therefore, since labor to install a new roof was a cost the insured was reasonably likely to incur in replacing his roof, the cost of labor was included within the meaning of "replacement cost." Because labor was included within that definition, it was proper to depreciate both materials and labor when calculating the loss suffered by the insured. We agree with the conclusion of the Branch court.

1 12 A roof is the product of materials and labor, and the roof's age and condition are also relevant facts in setting the amount of a loss. Depreciation in insurance law is not the type that is charged off the books of a business establishment, but rather it is the actual deterioration of a structure by reason of age, and physical wear and tear, computed at the time of the loss. Travelers Indemnity Co., 442 N.E.2d at 353.

C. SUMMARY AND ANSWER FOR CERTIFIED QUESTION NUMBER 1.

13 In summary, actual cash value is determined by the broad evidence rule. The Davis court determined that under the broad evidence rule, "replacement cost less depreciation" was the proper measure for the loss of the roof under the facts before that court. The Branch policy contained an endorsement providing for "replacement cost less depreciation" to settle covered losses to roof surfacing. Therefore, in both cases, the losses of the two roofs were measured in the same manner. A roof is the product of both materials and labor, just as a building in Rock-ester American Ins. Co. was the product of both materials and labor. Depreciation was one of the factors considered in determining the loss in the Rochester case. We answer the first question certified to us by the Tenth Cireuit that labor costs may be depreciated when using the replacement costs less depreciation method.

IL IN DETERMINING REPLACEMENT COST LESS DEPRECIATION, ARE LABOR COSTS OF REMOVING A DAMAGED ROOF NECESSARILY INCLUDED OR MAY ROOF TEAR-OFF BE SEPARATELY COVERED AS DEBRIS REMOVAL?

114 Our answer to the first certified question was that replacement cost includes the labor involved in replacement, and therefore is subject to depreciation under a "replacement cost less depreciation" endorsement in the insurance policy. The second question asks whether, given the rule cited, debris removal must be included in "replacement cost less depreciation." The Tenth Circuit observes that the insurance industry does not appear to have a uniform practice on whether labor costs incurred during tear-off are depreciable Both the Davis and Branch policies contain identical endorsements regarding debris removal. They provide: "We will pay your reasonable expenses to remove debris caused by a covered loss to covered property under Section 1 [Branck reads 'SECTION I]J-Property." In Davis, the insurance adjuster recommended tear off and removal of one layer of roofing, and included this labor in the total cost of replacement. This labor cost of tear off was reduced by fifty percent for depreciation based on the roofs age. In Branch, the insurance adjuster recommended tearing off two layers of old roof surfacing. A depreciation factor of thirty-five percent was applied, based on the adjuster's estimate of the age and condition of the old roof and the average life of a similar composition shingle roof. The plaintiffs in the two cases assert that the labor involved in tearing off the old roof surface should not have been depreciated.

I 15 The federal district courts in the two cases reach different conclusions. In Davis, the court listed as an undisputed fact that the roof surfacing had become debris. The court found that the parties' respective arguments regarding depreciation of expenses for debris removal presented a close question. The court observed that the policy appeared to set out debris removal as a separate item of coverage, not subject to depreciation, but also found merit in the insurer's explanation of its adjustment practices regarding including debris removal as one of the costs associated with replacement. The court concluded that the policy should be construed to give effect to the language of the endorsement providing coverage for debris removal without deduction for depreciation.

T16 In Branch, the insurer asserted that the plaintiff's existing roof surfacing was not debris, and therefore the tear off was an integral part of the total replacement cost. The court defined "debris" as "Scattered remains: RUINS," and "Discarded waste." Webster's II New Riverside University Dictionary 351 (1984). The court found no evidence to indicate that the plaintiff's old roof surfacing constituted debris. The court observed that the undisputed facts showed that the plaintiff's roof remained useful and was repaired a full year after the storm that caused the damage. There was no evidence that he had to remove any scattered or fallen shingles after the storm. The court further stated as undisputed that tearing off the plaintiff's old roof surfacing was necessary to the proper installation of a new roof.

T17 An insurance policy is a contract. The same principles generally apply to the construction of a policy of insurance as apply to any adhesion contract. Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 10, 812 P.2d 372, 376. In Johnny F. Smith Truck & Dragline Service v. United States, 49 Fed.Cl. 448 (2001), the Court of Federal Claims resolved a contract dispute between the plaintiff and the United States regarding debris removal in a flood damaged area. The dispute involved the definition of "debris." That court used a similar definition as the Branch court: "1. a. The scattered remains of something broken or destroyed; rubble or wreckage. b. Carelessly discarded refuse; litter." American Heritage Dictionary of the Einglish Language (4th ed.2000).

118 If a roof has been damaged by wind or hail to the degree that it must be replaced, then the damaged portion is rubble or wreckage. If the whole roof must then be torn off to repair or replace the damaged portion, then those materials also must be considered wreckage. Farmers Union Mutual Ins. Co. v. Oakland, 251 Mont. 352, 825 P.2d 554 (1992). See also, Manduca Datsun, Inc. v. Universal Underwriters Ins. Co., 106 Idaho, 163, 168, 676 P.2d 1274, 1279 (Idaho Ct.App.1984). Replacement costs include the cost of the labor to install the new materials forming the new roof. Removing damaged materials, and materials that have to be removed as a result of storm damage to the roof in order to install the new roof, must all be treated as rubble, or in the contract language, debris. If the insurer intended to exclude debris removal of damaged roofing products, it could have done so. To answer the question of the 10th Cireuit, labor costs to tear off an old roof are not included as a necessary part of the replacement costs of installing a new roof.

II. IF TEAR-OFF COSTS ARE PROPERLY INCLUDED AS NECESSARY REPLACEMENT COSTS AND LABOR COSTS ARE DEPRECIABLE GENERALLY, MAY THE LABOR COSTS INCURRED DURING TEAR-OFF ALSO BE DEPRECIATED?

19 We have answered that tear off of the old roof is not included as a necessary part of the replacement costs of installing a new roof, The debris removal clauses in the insurance policies before this Court are identical, and do not mention depreciation. Therefore, the labor costs in debris removal may not be depreciated.

120 CERTIFIED QUESTIONS ANSWERED.

121 CONCUR: HARGRAVE, C.J.; HODGES, LAVENDER, OPALA, WINCHESTER, JJ.

122 CONCUR IN PART; DISSENT IN PART: WATT, V.C.J. (JOINS BOUDREAU, J.); SUMMERS (JOINS BOUDREAU, J.), BOUDREAU (BY SEPARATE WRITING), JJ.

23 RECUSED: KAUGER, J.

BOUDREAU, J.,

concurring in part and dissenting in part, WATT, V.C.J., and SUMMERS, J. joining.

1 1 I concur in part and dissent in part.

T2 I concur in the majority's answers to the second and third certified questions.

[3 I dissent from the majority's answer to the first certified question for the reasons stated in my dissent to Redcorn v. State Farm Fire and Casualty Co., 2002 OK 15, 55 P.3d 1017 which is being handed down contemporaneously. I would hold that in determining actual cash value using the replacement costs less depreciation method, labor costs may not be depreciated.

      . The other methods cited as minority rules are (1) Replacement cost, without deduction for depreciation, (2) The market value test, and (3) The replacement cost with deduction for depreciation. Travelers Indemnity Co., 442 N.E.2d at 355,

      . Section 4803 was last amended by 1993 Okla. Sess.Laws, ch. 222, § 1.


text:
    2002 OK 22
    Stanley M. WARD, V. Glenn Coffee, E. Scott Pruitt, Thad H. Balkman and Kevin J. Calvey, Petitioners, v. OKLAHOMA TAX COMMISSION and the State Board of Equalization, Respondents.
    No. 97,316.
    Supreme Court of Oklahoma.
    April 2, 2002.
   ORDER

{1 Upon consideration of the petitioners', Stanley M. Ward, V. Glenn Coffee, E. Scott Pruitt, Thad H. Balkman and Kevin J. Cal-vey (collectively, taxpayers), application to assume original jurisdiction, the responses thereto and the related applications filed in this matter, THE COURT DETERMINES THAT:

1) The respondent, Board of Equalization, has a constitutional duty to annually estimate and certify the funds available for appropriation for the upcoming fiscal year to the Oklahoma Legislature. Okla. Const. art. 10, § 28.
Duties placed with the Board of Equalization pursuant to the Okla. Const. art. 10, § 28 and 68 0.8.2001 §§ 2855 and 4001 are exercised subject to constitutional and legislatively established standards and guidelines. Therefore, there is no unconstitutional delegation of legislative authority. Continental Oil Co. v. Oklahoma State Bd. of Equalization, 1976 OK 23, 17, 570 P.2d 315.
The application to assume original jurisdiction and petition for writ of mandamus should be denied.
Pending applications for oral argument, intervention, appearances as amici curiae, and submission of additional briefs should be denied.

I 3 Pending applications for oral argument, intervention, appearances as amict curige, and submission of additional briefs are denied. The application to assume original jurisdiction and petition for writ of mandamus is denied.

{4 DONE BY ORDER OF THE SUPREME COURT IN CONFERENCE THIS ist DAY OF APRIL, 2002.

ALL JUSTICES CONCUR.


author: LAVENDER, J.

text:
    2002 OK 34
    BITUMINOUS CASUALTY CORP., Plaintiff, v. COWEN CONSTRUCTION, INC., and Hospital Casualty Company, Defendants.
    No. 95,971.
    Supreme Court of Oklahoma.
    April 30, 2002.
    Rehearing Denied Sept. 10, 2002.

      Robert N. Naifeh, Jr. of Derryberry, Quig-ley, Solomon, Blankenship & Naifeh, Oklahoma City, OK, for the plaintiff.
    Alan Wayne Gentges of Seott & Gentges, Tulsa, OK, for the defendant, Cowen Construction, Inc.
    Michael J. Heron, Mary Beth Hanan and Patrick R.B. Sherry of Johnson Hanan & Heron, Oklahoma City, OK, for the defendant, Hospital Casualty Co.
   LAVENDER, J.

{1 Pursuant to the Uniform Certification of Questions of Law Act, 20 0.8.1991 §§ 1601 et seq., the United States District Court for the Northern District of Oklahoma certified the following questions:

1. Under Oklahoma law, what is the proper "trigger of coverage" theory to determine the applicability of a commercial general liability policy to injuries allegedly caused by lead poisoning?
2. Under Oklahoma law, is the scope of the total pollution exclusion of a commercial general liability policy limited to "environmental pollution?"

12 Since the language used in the insurance contract (in issue) is in itself clear and unambiguous insofar as it addresses coverage for "property damage" and "bodily injuries" occasioned by "pollutants," it will be given its plain and ordinary meaning. The second certified question is answered in the negative. Because our response to the see-ond query disposes of the case, we decline to answer the first certified question. The Court will answer only those certified questions which are "determinative" of a cause When, as here, the provided answer resolves the case, any additional response would necessarily be given in the abstract and, hence, will not be offered.

I

STATEMENT OF FACTS AND PROCEDURAL HISTORY

T3 St. John Medical Center [hospital] contracted with Cowen Construction, Inc.[Cow-en] to build a kidney dialysis center in Tulsa, Oklahoma. Cowen completed the contracted-for dialysis center in November 1998. In October 1996 eight patients -who had received dialysis treatments at the center-were diagnosed as suffering from lead poisoning and associated illnesses. Tests revealed that the B-bath unit of the dialysis center was contaminated with lead.

T4 Patients who were treated in the contaminated dialysis unit and suffered lead poisoning brought actions in the District Court of Tulsa County, State of Oklahoma, against hospital [and others] for damages related to their injuries. Cowen was not directly sued im these actions. Nonetheless, in one of the state-court actions hospital brought a third-party petition against Cowen alleging that it had negligently constructed the venting system for the B-bath dialysis unit resulting in its contamination. Hospital's third-party petition is based upon theories of negligence, breach of warranty in the unit's construction and breach of contract.

5 During periods relevant to the dialysis unit's construction and the patient/plaintiffs' claims Cowen purchased Commercial General Liability ("GCL") insurance policies from Bituminous Casualty Corporation [Bituminous] [for three policy periods beginning June 15, 1991 and ending May 1, 1994], from CNA Insurance Company [CNA] [for policy periods from 1994 to 1996], and from United States Fidelity Insurance and Guaranty Company [USF & G] [from 1996 until the present.]

T6 In February 2000 Hospital Casualty Company [HCC], hospital's insurer, placed Bituminous and CNA on notice that it would seek indemnity from them if it had to pay-on hospital's behalf-for the patient/plaintiffs alleged injuries [Only USF & G had agreed to defend Cowen against hospital's claims.] After receipt of HCC's notice Bituminous sought declaratory relief in the United States District Court for the Northern District of Oklahoma to determine whether it had any contractual obligation to either defend or indemnify Cowen in the third-party action.

II

THE COURT'S FUNCTION WHEN RESPONDING TO A CERTIFIED QUESTION FROM A FEDERAL COURT

T7 Because the case from which the certified question emanates is not before us for resolution, we refrain (1) from applying the declared state-law response to the facts elicited in the federal-court litigation and (2) from passing upon the effect of federal procedure on the issues, facts and proof in the case. We have briefly outlined the case's factual underpinnings to place the certified questions in a proper perspective. It is for the United States District Court for the Northern District of Oklahoma to analyze our answer's impact on the case and facts ultimately before it.

III

CERTIFIED QUESTION ANSWERED

T8 The posited certified questions call for the Court to ascertain the meaning of certain terms found in general liability insurance policies/contracts between Bituminous (insurer) and Cowen (insured). It is settled under Oklahoma's extant jurisprudence that ascertaining whether the terms of an insurance policy are ambiguous is for the Court to determine as a matter of law.

§°9 Oklahoma's extant jurisprudence demarcates guidelines for ascribing meaning to an insurance policy's terms. Basically, an insurance policy is a contract. When its terms are unambiguous and clear, the employed language is accorded its ordinary, plain meaning and enforced so as to carry out the parties' intentions. In this process we are mindful that an insured and insurer are free to contract for that quantum of coverage which one is willing to extend and the other is willing to purchase. The parties are bound by the terms of their agreement and the Court will not undertake to rewrite the same nor to make for either party a better contract than the one which was executed. The last principle of construction relevant to resolution of the disposi-tive certified question before the Court requires that a contract be construed as a whole, giving effect to each of its parts. These rules are amplified by the provisions of 36 0.S$.1991 § 3621 "Construction of Poli-cles" which state:

Every insurance contract shall be construed according to the entirety of its terms and conditions set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application attached to and made a part of the policy.

{10 We begin by noting that today's case does not mark the first time the Court has considered the seope of a "pollution exclusion clause" in a comprehensive GCL insurance policy. The Court in Kerr-McGee Corp. v. Admiral Ins. Co. reviewed a similar policy exclusion and held that it was unambiguous. While we accept the certified question for answering because the wording of the insurance contract (in issue) is-although similar-different, we reach the same conclusion as the earlier Court did.

111 The primary focus of our analysis is construction of the following exclusion-from-coverage found in a special endorsement to the Bituminous/Cowen GCL policy:

(1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.

Bituminous would have the Court declare that the special endorsement's terms are unambiguous and limit the scope of covered harm-i.e, there is no coverage for damage occasioned by pollutants. The insured asks the Court (1) to find that the above-quoted policy language is ambiguous and (2) to construe the "pollution exclusion" endorsement to "mean pollution in the traditional environmental sense and for which the insured would have expected to exelude its products incorporated into its work." It is Cowen's claim that the word "pollutant" as used in the GCL policy is "unclear." .

112 The Court is required in its construction of the policy's terms to give effect to the entire contract. Our review discloses no observable ambiguity in the exelusion's language found on the insurance policy's face. Giving the language used in the pollution-exelusion clause-as stated in the special endorsement-its plain and ordinary meaning evinces an exclusion of coverage for bodily injury or property damage caused by a pollutant's release. Nowhere in the policy's lexicon is there language employed which would sustain finding-as suggested by the insured-the pollution exclusion clause only excluded from coverage that bodily injury and/or property damage which occurred when the general "environment" was damaged by the insured's acts. An insured cannot insist upon a strained construction of relevant policy language in order to claim a patent ambiguity exists nor can it contradict the written instrument's plain terms under the guise of a latent ambiguity.

1 13 The general import of the GCL insurance policy's original pollution-exelusion-clause-see policy paragraph "2. Exclusions (a) & a-d" -can be read to support a finding that an "environmental" limitation exists as to the original pollution-exelusion provision's seope. The base policy's limitation is couched in geographic terms and refers to clean up, removal and response to the effects of pollutants denoting an environmental element. However, the original limitations were removed or superceded by the special endorsement's terms. If we were to impose upon the special endorsement's pollution-exclusion-provision the same meaning and scope as that of the original contract's term, the former would be rendered redundant and the negotiation for and inclusion of the special endorsement would become a vain and useless act. The elimination of the language used in the original policy by way of the special endorsement is legally significant. The requirement that effect must be given to each part of the Bituminous/Cowen insurance contract (as amended by the special endorsement) compels today's construction of the contested term-ie., that it does not contain an environmental limitation but rather excludes from coverage any property damage or bodily injury caused by the discharge or release of pollutants.

114 In light of the clear and unambiguous text employed in the special endorsement and the language replaced in the base policy by the addendum, the pollution-exelugion clause embodied in the special endorsement excludes coverage for property damage or bodily injury-regardless whether there was damage to the general environment-occasioned by pollutants (as that term is defined in the endorsement).

IV

SUMMARY

115 The Court is aware that many jurisdictions have considered the issue encompassed in the certified question answered today and that there is a wide divergence of opinion as to how it should be resolved. In most of the jurisprudence suggested by the parties the issue came to the court construing the policy's terms in the context of extended litigation with well-defined records of the pollution-exelusion-clause's history before relevant state regulatory bodies. Such is not the context within which we have considered the contested policy's text today. The certified question in the federal declaratory action presented to us is bare of any evidence of the parties' intent other than as embodied in the language used in the policy and further is devoid of any factual record relative to approval of the policy's language by the Oklahoma State Insurance Commissioner. Hence, we have considered the insurance provision in issue by analysis focused upon the language employed by the parties in their contract.

T 16 The utilized terminology in the Bituminous/Cowen GCL policy is straightforward and not fairly susceptible to multiple meanings. Hence, we have given the policy's language its plain and ordinary meaning. The exclusion (here in issue) was not made ob-secure by being hidden deep within the bowels of a long insurance contract but rather is clearly identified for what it is-a special endorsement changing the scope and language of an earlier contractual provision. The Wisconsin Supreme Court's admonition in Peace v. Northwestern Nat'l Ins. Co., 228 Wis.2d 106, 596 N.W.2d 429, 441, is particularly relevant. There the court in construing a "pollution exelusion clause" observed: "Courts must not torture the policy language in order to 'create ambiguities where none exist. " [quoting Kaytes v. Imperial Casualty & Indem. Co., 1994 WL 780901 (E.D.Pa. 1994)] The contractual language identified in the certifying court's second query-ie., the special endorsement's pollution-exelusion-clause-excludes from coverage all damage cecasioned by the "discharge, dispersal, release or escape of pollutants" which causes "bodily injury" or "property damage." It is not limited in its seope to "environmental pollution."

CERTIFIED QUESTIONS ANSWERED.

[17 HARGRAVE, C.J., HODGES, OPALA, BOUDREAU and WINCHESTER, JJ., concur.

{18 KAUGER, J., concurs in part; dissents in part.

T 19 WATT, V.C.J. and SUMMERS, J., dissent.

      . Today's answers are limited to construction of the specific language of the policy or policies at issue in the federal declaratory-relief action pending before the certifying court. The relevant policy provisions are as follows:
      1. Insuring Agreement.
      a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend any "suit" seeking those damages. We may at our discretion investigate any "occurrence" and settle any claim or "suit" that may result.....
      #
      b. This insurance applies to "bodily injury" and "property damage" only if:
      #
      (2) The "bodily injury" or "property damage" occurs during the policy period.
      2. Exclusions.
      This insurance does not apply to:
      a. "Bodily injury" or "property damage" expected or intended from the standpoint of the insured....
      #o% 4
      £. (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:
      (a) At or from any premises, site or location which is or was at the time owned or occupied by, or rented or loaned to, any insured;
      (b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste;
      (c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any insured or any person or organization for whom you may be legally responsible; or
      (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations:
      (6) if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor; or
      (#) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.
      shove ork
      SECTIONV DEFINITIONS.

      3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

      9. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
      ENDORSEMENT POLLUTION EXCLUSION
      It is agreed that the exclusion relating to the actual, alleged or threatened discharge, dispersal, release or escape of pollutants is replaced by the following:
      (1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.
      (2) Any loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.
      Subparagraph (1) above does not apply to bodily injury or property damage caused by heat, smoke or fumes from a hostile fire. As used in this exclusion, a hostile fire means one which becomes uncontrollable, or breaks out from where it was intended to be.
      Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

      . See 20 0.$.1991 § 1602, whose pertinent terms provide:
      The Supreme Court ... may answer questions certified to it ... when requested by the certifying court if there are involved in the proceeding before it questions of law of this state which may be determinative of the cause then pending in the certifying court .... [Emphasis added.]

      . See Atlantic Richfield Co. v. Tomlinson, 1993 OK 106, 859 P.2d 1088, 1094. We note that other courts have declined to answer certified questions which are not determinative of the cause before the certifying court. See Greene v. Massey, 384 So.2d 24 (Fla.1980)(declined to answer certified question because Court's response would not be determinative of the cause); Grant Creek Water Works, Ltd. v. Commissioner of Int. Rev., 235 Mont. 1, 775 P.2d 684 (1988)(answer-ing issue presented would not control outcome of litigation).

      . The record indicates that four of the patient/plaintiffs began their initial dialysis treatment before May 1, 1994 while four others started after that date.

      . None of the parties in today's case dispute that lead is a pollutant.

      . See Gayenell Woodbridge v. St. John Medical Center, Inc., Case No. CJ-98-3032, in the District Court of Tulsa County, State of Oklahoma.

      . It is alleged that Cowen failed to install a goose-necked vent pipe from B-bath and that lead flashing placed in the installed straight vent pipe allowed steam from the bath to interact with the flashing resulting in lead percolating back into the affected dialysis unit.

      . In answering the second certified question the Court does not address whether the insurance coverage issued by Bituminous to Cowen extends to the repair of construction defects, if any, in the dialysis unit built by the insured. That issue's resolution is left to the certifying court. Today's answer only addresses coverage for damages occasioned by the pollutants themselves. It does not address coverage for property damage caused by a contractor's failure to comply with building plans.

      . Brown v. Ford, 1995 OK 101, 905 P.2d 223, 226.

      . See supra note 1 for the pertinent contract terms.

      . Kerr-McGee v. Admiral Insurance Co., 1995 OK 102, 905 P.2d 760, 762; Dodson v. St. Paul Ins. Co., 1991 OK 24, 812 P.2d 372, 376 (1991).

      . Phillips v. Estate of Greenfield, 1993 OK 110, 859 P.2d 1101, 1104. See also the terms of 15 0.$.1991 § 154, which provide:
      The language of a contract is to govern its interpretation, if the language is clear and explicit and does not involve an absurdity.

      . American Iron & Machine Works Co., Inc. v. Insurance Company of North America, 1962 OK 197, 375 P.2d 873, 2nd syl.; Torres v. Sentry Insurance, 1976 OK 195, 558 P.2d 400, 401.

      . Max True Plastering Co. v. U.S. Fidelity & Guaranty Co., 1996 OK 28, 912 P.2d 861, 869.

      . 15 O0.S.1991 § 157, whose pertinent terms provide:
      The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others.
      See also Kerr-McGee, supra note 11 at 763.

      . Supra note 11. The Court's attention is drawn to this jurisprudence by the parties' briefs. However, it appears they focused on the Court's construction of the terms "sudden" and "accidental" without realizing that the Kerr-McGee holding would be untenable sans a determination that the entire "pollution exclusion" clause was unambiguous.

      . For the full text of both the policy's stipulated exclusions from coverage and the special endorsement which amends the same, see supra note 1.

      . For the policy's definition of pollutants, see supra note 1.

      . Druggists' Mut. Fire Ins. Co. of Iowa v. Shaw, 1935 OK 132, 41 P.2d 69, 70.

      . For the pertinent policy language see supra note 1.

      . There is nothing in the record or materials accompanying today's certified questions which would suggest that-as in Morton Internat'l, Inc. v. General Accident Inc. Co. of Am., 134 N.J. 1, 629 A.2d 831, 852-53 (1993)-the special endorsement was but a clarification of earlier policy provisions.

      . "Pollutants" is defined in the special endorsement as follows:
      Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. While the parties may differ in the future over
      whether something is a pollutant or not within this definition's scope, there is no disagreement (in the case before the Court ) over whether lead is a pollutant within the policy's definition.

      . The Court understands that Cowen asserts that the endorsement in issue should be construed by application of the reasonable person test, adopted in Max True Plastering supra note 14. The insured's position misapplies the case's holding. The Court held in Max True Plastering that the reasonable expectations doctrine "may apply to the construction of ambiguous insurance contracts or to contracts containing exclusions which are masked by technical or obscure language or which are hidden in policy provisions." [Emphasis added.] Id. at 863. The criteria for the doctrine's application are not satisfied in the present case since the employed policy language is clear and unambiguous rather than masked in technical jargon and is set out in such a fashion that it would have been impossible for the insured to have missed it if the entire insurance policy were read.