832 F. Supp. 2d 804
N.D. Ohio2011Background
- Plaintiff Owners Insurance Company seeks a declaratory judgment on whether the Policy covers the July 31, 2008 accident involving Merritt.
- Defendant Barone owned a Florida residence with multiple boats; a 2008 Mastercraft Boat was delivered to Florida for anticipated use.
- Merritt’s Florida case alleges negligence in operating the Boat and in the wakeboard’s provision/defect.
- Defendant admitted not owning the Boat at the time of the accident; ownership and regular use are disputed.
- Court applies Ohio law to interpret the Policy and assesses coverage for the Boat, wakeboard, and duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Boat is covered as a watercraft under the Policy | Watercraft Endorsement, Watercraft Liability Endorsement provide coverage | Automatic Coverage/Declarations imply coverage when declared; regular-use analysis pending | Boat not covered as a watercraft under Declarations without formal addition |
| Whether the wakeboard is a watercraft and thus falls under Coverage E | Wakeboard not clearly excluded; may be watercraft | Wakeboard not a watercraft; falls under general Coverage E | Wakeboard not a watercraft; would fall under Coverage E if otherwise owned/covered, but not excluded |
| Who owned the wakeboard at the time of the accident | Defendant cannot claim ownership; wakeboard part of Boat | Defendant owned wakeboard; ownership not contradicted | Court finds Defendant owned the wakeboard at the time of the accident |
| Duty to defend Merritt’s Florida case | Policy covers wakeboard-related liability; insurer must defend | Only indemnity/defense for covered claims; ambiguity persists | Insurer has a duty to defend all Merritt claims arising from the July 31, 2008 accident; indemnity for wakeboard-related damages allowed |
Key Cases Cited
- St. Marys Foundry, Inc. v. Employers Ins. Of Wausau, 332 F.3d 989 (6th Cir. 2003) (strict construction of contract terms; give meaning to every term)
- Safeco Ins. Co. of America v. White, 122 Ohio St.3d 562 (Ohio 2009) (ambiguous policy terms interpreted in insured’s favor; consider whole contract)
- City of Sharonville v. American Employers Ins. Co., 109 Ohio St.3d 186 (Ohio 2006) (ambiguous provisions interpreted against insurer; duty to defend broad concept)
- Thompson v. Preferred Risk Mutual Ins. Co., 32 Ohio St.3d 340 (Ohio 1987) (regular use and ownership impact coverage under auto/boat policies)
- Auto-Owners Ins. Co. v. Merillat, 167 Ohio App.3d 148 (Ohio App. 2006) (definition of regular use; fact-specific inquiry for coverage)