Founders Ins.Co. v. Gurung
2017 Ohio 8983
| Ohio Ct. App. | 2017Background
- On August 16, 2014 Ran Gurung, driving with a temporary instruction permit, collided with a bus and injured passenger Dianne Badea.
- Gurung’s temporary permit required accompaniment by a licensed operator seated beside the driver; no one else in the car had a valid Ohio driver’s license.
- Founders Insurance filed a declaratory-judgment action seeking a ruling that Gurung’s policy provided no liability coverage because he violated a condition of his driving privileges.
- Gurung counterclaimed; both sides moved for summary judgment.
- The trial court granted Founders’ motion and denied Gurung’s, holding the policy unambiguous and the “driving privileges” exclusion applicable because Gurung violated permit conditions.
- The appellate court affirmed, concluding no genuine factual dispute and that the exclusion, read in its plain meaning, bars coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy’s “driving privileges” exclusion applies to operation in violation of a temporary instruction permit | Gurung: phrase ambiguous; exclusion should not be read to bar coverage for permit violations (or applies only to post-suspension limited privileges) | Founders: plain meaning excludes operation that violates any condition of a person’s authorization to drive, including temporary permits | Held: exclusion unambiguous; applies to violations of temporary permit conditions, so no coverage |
| Whether Founders may adjudicate, as a contractual matter, that Gurung violated permit conditions absent a criminal/citation determination | Gurung: insurer cannot make a binding finding reserved for courts; due process/public policy concerns | Founders: policy language conditions coverage on compliance; discovery admissions suffice to establish violation | Held: Gurung admitted no other licensed driver was present; no genuine issue of material fact; insurer’s declaratory ruling as to coverage was proper |
| Whether summary judgment was appropriate | Gurung: factual dispute and ambiguity preclude summary judgment for Founders | Founders: discovery admissions eliminate factual dispute; plain contract language entitles insurer to judgment as a matter of law | Held: summary judgment for Founders affirmed; Gurung’s motion denied |
Key Cases Cited
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (summary judgment standard)
- Dresher v. Burt, 75 Ohio St.3d 280 (movant’s burden in summary judgment)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo review of summary judgment)
- World Harvest Church v. Grange Mut. Cas. Co., 148 Ohio St.3d 11 (insurance contract interpretation; construing exclusions narrowly)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (plain-meaning rule for policy language)
- Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657 (exclusions construed only as clearly intended)
- Kettering v. Baker, 42 Ohio St.2d 351 (use of term “driving privilege” to mean general authorization to drive)