2004 Ohio 806 | Ohio Ct. App. | 2004
{¶ 2} On July 15, 2000, Keith Homan, a minor, sustained physical injuries, resulting from a single vehicle accident that took place in Gibson Township in Mercer County. Erin Weitzel was driving a vehicle owned by her father, Phillip Weitzel, when she negligently lost control of it, causing the vehicle to travel off the roadway, strike several trees and flip over. There were four passengers, including Keith, occupying the vehicle at the time of the accident. Each sustained physical injuries.
{¶ 3} At the time of the accident, Weitzel's vehicle was covered under a personal automobile liability insurance policy issued by Cincinnati Casualty. The Cincinnati Casualty policy provided bodily injury liability coverage of $250,000 per person and $500,000 per accident. Additionally, Weitzel's policy provided uninsured and underinsured motorists (UM/UIM) coverage of $250,000 per person and $500,000 per accident.
{¶ 4} This case initally arose from an interpleader complaint filed by Cincinnati Company, Cincinnati Casualty's parent corporation. Pursuant to the underlying action, the trial court ordered Cincinnati Casualty to pay out the entire $500,000 per accident limit to the four passengers for personal injuries and damages arising from the accident. Of that amount, Cincinnati Casualty was ordered to pay Keith $200,000 for his injuries. Subsequently, Appellants presented a claim against the Cincinnati Casualty UM/UIM policy in the amount of $50,000. Cincinnati Casualty denied coverage for the UM/UIM claim, citing policy and statutory restrictions. For the purposes of resolving the disputed coverage issues, the parties stipulated that Keith's claim for damages exceeded $250,000.
{¶ 5} Thereafter, Cincinnati Casualty moved for summary judgment, claiming coverage was statutorily barred under R.C.
{¶ 6} Also at the time of the accident, Keith and Nancee Homan were resident relatives to Theodore Homan. Theodore was an employee of Chickasaw Machine and Tool, Inc ("Chickasaw"). Chickasaw maintained a business auto policy, providing UM/UIM coverage in the amount of one million dollars per accident, as well as a commercial umbrella liability policy, providing additional coverage for bodily injury liability of one million dollars per accident. Republic Franklin maintained both Chickasaw's business auto policy and its umbrella policy.
{¶ 7} In April of 2001, Appellants filed a third-party complaint against Republic Franklin, seeking numerous declarations as to the UM/UIM coverage under the business auto policy and the umbrella policy issued to Chickasaw. Subsequently, both parties moved for summary judgment. Again, on August 7, 2001, the court entered summary judgment in favor of Republic Franklin, finding Appellants were not entitled to UM/UIM coverage under either the business auto policy or the umbrella policy.
{¶ 8} It is from the August 7, 2001 judgments Appellants appeal, presenting the following assignments of error for our review.
{¶ 9} In the first assignment of error, Appellants contends that neither R.C.
{¶ 11} Appellate review of summary judgment determinations is conducted on a de novo basis. Griner v. Minster Bd. of Edn.
(1998),
{¶ 12} In its journal entry, which granted summary judgment in favor of Cincinnati Casualty, the trial court relied upon R.C.
(K) As used in this section, `uninsured motor vehicle' and`underinsured motor vehicle' do not include any of the followingmotor vehicles: (1) A motor vehicle that has an applicable liability coveragein the policy under which the uninsured or underinsured motoristscoverage are provided.
The court determined that the motor vehicle being operated by Weitzel was covered under the Cincinnati Casualty policy for the same amounts in both the liability and UM/UIM policies. Thus, based on the above statute, the court found that Weitzel's vehicle, which had applicable liability coverage, could not qualify as an underinsured motor vehicle. Accordingly, the court determined, as a matter of law, that UM/UIM coverage "does not exist for Keith Homan, a passenger who was injured in the vehicle and received liability insurance coverage benefits under the Cincinnati [Casualty] liability policy that provided coverage for the Weitzel vehicle." Finding the statute restricted coverage, the court did not make a coverage determination based on the expressed language of the Cincinnati Casualty UM/UIM endorsement.
{¶ 13} Because R.C.
{¶ 14} Turning to the Cincinnati Casualty policy, we note that it is well settled that an insurance policy is a contract and the relationship between the insured and the insurer is purely contractual in nature. Nationwide Mut. Ins. Co. v. Marsh
(1984),
{¶ 15} Looking at the Cincinnati Casualty UM/UIM endorsement, subpart (A) of part (C) of the policy provides, in pertinent part:
We will pay compensatory damages which a covered person islegally entitled to recover from the owner or operator of: 1. An uninsured motor vehicle as defined in SECTIONS 1., 2.,and 4. of the definition of an uninsured motor vehicle because ofbodily injury: a. Sustained by a covered person; and b. Caused by an accident.
Subpart (B) of the UM/UIM endorsement defines a "covered person," in its relevant part:
Any other person occupying your covered auto. Subpart (C), in its pertinent parts, defines an uninsured motor vehicle as:
Uninsured motor vehicle means a land motor vehicle or trailerof any type: 2. Which is an underinsured motor vehicle. An underinsuredmotor vehicle means a land motor vehicle or trailer for which thesum of all liability bonds or policies applicable at the time ofan accident provides at least the amounts required by theapplicable law where your covered auto is principally garaged buttheir limits are less than the limit of insurance of thiscoverage.
And, finally, subpart (D) provides the following exclusions:
However, uninsured motor vehicle does not include any vehicleor equipment: 1. Owned by or furnished or available for the regular use ofyou or any family member.
{¶ 16} Pursuant to the UM/UIM endorsement, Appellants are only entitled to coverage if Keith was a "covered person" and Weitzel's vehicle was an "underinsured motor vehicle." Based on the above definition of a "covered person," Keith, as "any other person in occupying your covered auto," is a covered person under the policy. Thus, the next step is to determine whether Weitzel's vehicle was an "underinsured motor vehicle."
{¶ 17} Pursuant to subpart (C) an underinsured motor vehicle is a vehicle in which the cumulative total of all applicable liability policies provide for at least the state minimum. However, the cumulative total of those limits "are less thanthe Limit of Insurance of this coverage." In other words, the Cincinnati Casualty UM/UIM endorsement limits, which is "the limit of insurance of this coverage," cannot be the same or more than the underlying liability policy limits. Here, the applicable liability policy in this case carried coverage of $250,000 per person and $500,000 per accident. The limits of "this coverage" under the UM/UIM endorsement were also $250,000 per person and $500,000 per accident. Thus, the limits of the liability policy were not less than the limits of the UM/UIM endorsement. Accordingly, Weitzel's vehicle does not qualify as an underinsured motor vehicle under subpart (C) of the UM/UIM endorsement.
{¶ 18} Further, coverage is excluded under subpart (D) of the UM/UIM endorsement. Under subpart (D) vehicles owned by "you or any family member" are excluded as an uninsured vehicle. The term "you" is defined by the Cincinnati Casualty policy as the named insured, which was shown on the declaration page as Phillip Weizel. In this case, Weitzel owned the car involved in the accident. Thus Weitzel's vehicle is excluded under subpart (D), since the policy excludes any vehicles owned by the named insured, Weitzel.
{¶ 19} Having found that Weitzel's vehicle was not in an uninsured motor vehicle, Appellants are not entitled to UM/UIM coverage pursuant to the Cincinnati Casualty UM/UIM endorsement. Accordingly, Appellants first assignment of error is overruled.
{¶ 20} In the second assignment of error, Appellants contend that the court erred in granting summary judgment to Republic Franklin, because they were entitled to UM/UIM coverage under the business auto policy pursuant to Scott-Pontzer v. Liberty Mut.Ins. Co. (1999),
{¶ 21} Pursuant to the Ohio Supreme Court's recent decision in Westfield Ins. v. Galatis,1
{¶ 22} In Galatis, the Court noted:
The general intent of a motor vehicle insurance policy issuedto a corporation is to insure the corporation as a legal entityagainst liability arising from the use of motor vehicles. It issettled law in Ohio that a motor vehicle operated by an employeeof a corporation in the course and scope of employment isoperated by and for the corporation and that an employee, undersuch circumstances, might reasonably be entitled to uninsuredmotorist coverage under a motor vehicle policy issued to hisemployer. However, an employee's activities outside the scope ofemployment are not of any direct consequence to the employer as alegal entity. An employer does not risk legal or fiscal liabilityfrom an employee's operation of a non-business-owned motorvehicle outside the scope of employment is extraneous to thegeneral intent of the commercial auto policy. Id. at ¶ 20 (citations omitted).
{¶ 23} Accordingly, the Court found that "[a]bsent specific language to the contrary, a policy of insurance that names a corporation as an insured for [UM/UIM] coverage covers a loss sustained by an employee of the corporation only if the loss occurs within the course and scope of employment." Id. at ¶ 62.
{¶ 24} It is undisputed that Keith Homan was not a Chickasaw employee. Further, neither the business auto policy nor the Ohio UM/UIM endorsement extends coverage for employees or their family members acting outside the course and scope of employment. Thus, Appellants are not insured under the business auto policy. Accordingly, the second assignment of error is overruled.
{¶ 25} Appellants also maintain they are entitled to coverage under the Republic Franklin umbrella policy. Section I of the umbrella policy, which defines the terms of excess coverage, provides:
COVERAGE A — EXCESS LIABILITY
* * *
a. We will pay those sums, in excess of the limits ofliability under the terms of any `underlying insurance,' that theinsured becomes legally obligated to pay as damages because of`injury' or `wrongful act,' to which this insurance applies,provide that the `underlying insurance' also applies, or wouldapply but for the exhaustion of its applicable limits ofinsurance.
* * *
This insurance is subject to the same terms, conditions,agreements, exclusions and definitions as the `underlyinginsurance' except with respect to any provision to the contrarycontained in this insurance.
Section V provides the following definitions:
`Underlying insurance' means the liability insurance coverageprovided under policies shown in the Declarations, for the limitsand periods indicated.
Section I also provides the terms of extended coverage under the umbrella policy as follows:
COVERAGE B — EXTENDED LIABILITY We will pay those sums that the insured becomes legallyobligated to pay as damages because of "injury" to which thisinsurance applies.
Further, section II designates the insured under Coverage B for a corporation as the officers, directors and stockholders with respect to their duties, as well as employees for acts within the scope of their employment.
{¶ 26} Here the Republic Franklin commercial umbrella liability policy declarations listed the general commercial liability policy, the business auto policy and the employer's liability policy. Thus, based on the express language of the umbrella policy, Appellants must either be an insured under the one of the underlying policies or subject to coverage for an injury enumerated under Coverage B in order to qualify for coverage under the umbrella policy.
{¶ 27} Based on the above analysis, Appellants were not insured under the underlying insurance. Thus, they are not entitled to coverage under Coverage A. Further, Appellants do not qualify for coverage under Coverage B, since Keith was not a Chickasaw officer, director, stockholder or employee. Accordingly, since Appellants were not entitled to coverage under either Coverage A or B, the third assignment of error is overruled.
{¶ 28} Having found no error prejudicial to the appellant herein, in the particulars assigned and argued, we affirm the judgment of the trial court.
Judgment affirmed.
Cupp and Bryant, JJ., concur.
