Am. Natl. Property & Cas. Co. v. Sterling , 2014 Ohio 5674 ( 2014 )

[Cite as Am. Natl. Property & Cas. Co. v. Sterling, 2014-Ohio-5674.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
AMERICAN NATIONAL PROPERTY & )
CASUALTY COMPANY, )
) CASE NO. 13 MA 139
PLAINTIFF-APPELLANT, )
)
- VS - ) OPINION
)
PAULA STERLING, INDIVIDUALLY )
AND ADMINISTRATRIX OF )
THE ESTATE OF BRIAN G. STERLING,)
et al., )
)
DEFENDANTS-APPELLEES. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas
Court, Case No. 12 CV 2944.
JUDGMENT: Reversed and Remanded.
APPEARANCES:
For Plaintiff-Appellant: Attorney Edward Ryder
Attorney Frank H. Scialdone
Attorney Jeffrey S. Maynard
Mazanec, Raskin & Ryder Co., L.P.A.
100 Franklin Row
34305 Solon Road
Cleveland, OH 44139
For Defendants-Appellees: Attorney Brian P. Kopp
Attorney David J. Betras
Betras, Kopp & Harshman, LLC
6630 Seville Drive
Canfield, OH 44406
JUDGES:
Hon. Mary DeGenaro
Hon. Gene Donofrio
Hon. Joseph J. Vukovich
Dated: December 19, 2014
[Cite as Am. Natl. Property & Cas. Co. v. Sterling, 2014-Ohio-5674.]
DeGenaro, P.J.
{¶1} Plaintiff-Appellant American National Property & Casualty Company,
appeals from a Mahoning County Common Pleas Court judgment in favor of Defendants-
Appellees, Paula Sterling, individually and as Administratrix of the Estate of Brian
Sterling, (collectively referred to as Sterling) denying its motion for summary judgment
seeking a declaration that it had no duty to indemnify or defend the Estate of Shirley
Sterling, in a declaratory judgment action regarding coverage, arising from the deaths of a
husband and wife, wherein Brian's estate and beneficiaries are pursuing wrongful death
claims against Shirley's estate. American National asserts that the trial court erred by
concluding that wrongful death claims belong to the decedent's survivors, and that neither
the homeowner nor automobile policies exclude coverage for such claims against the
Estate of Shirley Sterling.
{¶2} American National's argument is meritorious. The wrongful death claim
stems exclusively from Brian's bodily injury. The clear, unambiguous language in both
policies specifically excludes liability coverage for bodily injury to an insured person or any
family member living with an insured person. Decedents, Brian and Shirley, were insured
persons under both policies. Therefore, there is no liability coverage for Shirley for
negligently causing bodily injury to Brian. Accordingly, the judgment of the trial court is
reversed, and declaratory judgment is entered in favor of American National; specifically,
that it has no duty to indemnify or defend the Estate of Shirley Sterling against any claims
for wrongful death brought by the beneficiaries of Brian Sterling and his estate.
Facts and Procedural History
{¶3} On June 4, 2010, spouses Brian and Shirley Sterling and a friend, Diane
Chips, returned to their home after going out to dinner. Shirley was driving, and she
stopped the couple's vehicle in their driveway; Brian and Diane got out and went into the
house, with Diane leaving shortly thereafter. In the meantime, Shirley parked the vehicle
in the garage, shut the garage door, and entered the house, but failed to turn off the
vehicle's engine. The next day, the couple's daughter, Paula Sterling, found Brian and
Shirley dead in their home due to carbon monoxide poisoning. Brian and Shirley's home,
where they died, and their vehicle, which emitted the carbon monoxide, were covered by,
respectively, a homeowners' and an automobile policy with American National.
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{¶4} On June 4, 2012, Paula, individually and on behalf of the Estate of Brain
Sterling, filed a complaint seeking compensation from the Estate of Shirley Sterling for
proximately causing Brian's death, asserting a survival claim for damages Brian suffered
before his death and a wrongful death claim on behalf of Brian's beneficiaries. As a
result, Shirley's Estate requested a defense and indemnification coverage from American
National.
{¶5} American National filed a declaratory judgment action against Sterling and
Shirley's Estate requesting a determination that it had no duty to defend or indemnify
Shirley's Estate as to either the survival claim or the wrongful death claim. American
National argued in a motion for summary judgment that these claims were excluded from
coverage by both policies because Brian and Shirley were named insureds and family
members. In response, Sterling argued that the wrongful death claim was brought for the
exclusive benefit of Brian's statutory beneficiaries and therefore not excluded by either
insurance policy. However, Sterling did not make any argument regarding the survival
claim.
{¶6} The trial court denied American National's summary judgment motion. It
found that both policy exclusions American National relied upon did not clearly
encompass all of the statutory wrongful death damages, reasoning that such claims
belong to the decedent's children and the policies do not exclude American National from
the potential liability associated with damages incurred under those claims.
{¶7} Turning to a preliminary matter, American National contends that at the trial
level, the parties did not seriously dispute that Brian's survivor claim was barred by the
exclusion language in both policies. Nonetheless, the trial court denied American
National's summary judgment in its entirety. On appeal, American National reasserts this
argument, and Sterling has conceded that there is no coverage for the survivorship claim.
Thus, we will limit our consideration to the wrongful death claim.
Declaratory Judgment and Standard of Review
{¶8} A declaratory judgment action is appropriate for establishing the obligations
of an insurer in a controversy between the insurer and its insured as to the fact or extent
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of liability under an insurance policy. Boatwright v. Penn-Ohio Logistics, 7th Dist. No. 10
MA 80, 2011-Ohio-1006, ¶15, quoting Lessak v. Metro. Cas. Ins. Co. of N.Y., 168 Ohio
St. 153, 155, 151 N.E.2d 730 (1958).
{¶9} When a trial court disposes of declaratory judgment action on summary
judgment, this court reviews the trial court's resolution of the legal issues de novo. Id.
Thus, we apply the same test as the trial court in determining whether summary judgment
was proper. Civ.R. 56(C) provides that the trial court shall render summary judgment if no
genuine issue of material fact exists and when construing the evidence most strongly in
favor of the nonmoving party, reasonable minds can only conclude that the moving party
is entitled to judgment as a matter of law. State ex rel. Parsons v. Fleming, 68 Ohio St. 3d
509, 511, 628 N.E.2d 1377 (1994). A material fact depends on the substantive law of the
claim being litigated. Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App. 3d 598, 603, 662
N.E.2d 1088 (8th Dist.1995), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
Duty to Defend – Homeowner Policy
{¶10} American National asserts in its sole assignment of error:
{¶11} "The trial court legally erred when it failed to grant summary judgment in
favor of Plaintiff/Appellant American National Property & Casualty Co. when it failed to
hold that no coverage existed."
{¶12} A liability insurer is only obligated to its insured if the insured's claim falls
within the scope of coverage. Cincinnati Indemn. Co. v. Martin, 85 Ohio St. 3d 604, 605,
710 N.E.2d 677 (1999). If the insurer establishes that the insured's claim falls within an
exclusion to coverage, the insurer is under no obligation to defend the insured. Gearing
v. Nationwide Ins. Co., 76 Ohio St. 3d 34, 36, 665 N.E.2d 1115 (1996).
{¶13} Two insurance policies are at issue in this case, the Homeowner's Policy
and the Automobile Policy. The Sterlings' Homeowner's Policy states in relevant part:
DEFINITIONS
Throughout this policy, "you" and "your" refer to the "named insured" shown
in the Declarations and the spouse if a resident of the same household,
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and "we," "us," and "our" refer to the Company providing this coverage.
***
SECTION II – LIABILITY COVERAGES
COVERAGE E – PERSONAL LIABLITY
If a claim is made or a suit is brought against any insured for damages
because of bodily injury or property damage to which this coverage
applies, we will:
a. pay up to our limit of liability for the damages for which the insured is
legally liable; and
b. provide a defense at our expense by counsel of our choice. We may make
any investigation and settle any claim or suit that we decide is appropriate.
Our obligation to defend any claim or suit ends when the amount we pay for
damages resulting from the occurrence equals our limit of liability.
***
SECTION II – EXCLUSIONS
1. Coverage E – Personal Liability and Coverage F – Medical Payments
to Others do not apply to bodily injury or property damage:
***
h. arising out of the ownership, maintenance, use, loading, or unloading of
motor vehicles or all other motorized land conveyances, including any
attached trailers, owned or operated by or rented or loaned to any insured.
***
2. Coverage E - Personal Liability does not apply to:
***
f. bodily injury to you and any insured within the meaning of part a. or b. of
Definition 6. "insured"
{¶14} The parties agree that both Brian and Shirley were insureds under the
Homeowner's Policy.
{¶15} American National argues the language of the Homeowner's Policy
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expressly bars coverage under the exclusions for bodily injury to an insured and for bodily
injury arising out of the use of a motor vehicle. As to the exclusion for bodily injury to an
insured, under the definitions for bodily injury and insured, there is no personal liability for
death of an insured, because both Brian and Shirley were named insureds under the
Homeowner's Policy. Regarding bodily injury from the use of a motor vehicle, because
there is no coverage for bodily injury arising out of the use of a motor vehicle owned by
any insureds, there is no coverage because Brian's death was caused by Brian and
Shirley's use of their vehicle; specifically, Shirley left the engine of the vehicle running
inside the garage with the doors and windows closed.
{¶16} Conversely, Sterling argues the exclusions do not clearly and
unambiguously exclude all of the non-bodily injury damages of Brian's wrongful death
beneficiaries.
{¶17} The Ohio Supreme Court's decision in Martin, 85 Ohio St. 3d 604, supra, is
dispositive here. In Martin, six-year-old Michael Martin died when his eight-year-old
brother shot him while playing at the home they lived in with their mother, Stephanie. At
the time, Stephanie had a homeowner's insurance policy with Cincinnati Indemnity
Company. Stephanie was divorced from the boys' father, David, who did not live in the
home. David, as administrator of Michael's estate, filed a wrongful death action against
Stephanie alleging her negligence in supervising the children and in storing the gun
caused Michael's death. CIC then filed a declaratory judgment action seeking a
determination as to whether it was required to defend and indemnify Stephanie against
the wrongful death claim. The parties stipulated that Michael and his brother were
insureds under the homeowner's policy since they were relatives residing with Stephanie,
the named insured, but that David was not an insured.
{¶18} The trial court granted summary judgment for CIC finding that David's claim
was excluded from coverage because the plain language of the policy excluded liability
coverage for bodily injury to an insured, including the wrongful death claim. The Twelfth
District Court of Appeals affirmed but certified the case to the Ohio Supreme Court after
finding a conflict with the decision from another district. David argued the exclusion
applied only to injuries suffered by an insured, not to injuries suffered by him, a
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noninsured, and thus, the exclusion was inapplicable, because he suffered his own injury
as a wrongful death beneficiary. Id. at 606.
{¶19} The Ohio Supreme Court rejected this argument, finding that the policy
language was clear and unambiguous, that the definition of bodily injury meant "bodily
harm, sickness or disease," noting the policy provided coverage for "required care, loss of
services and death resulting from bodily injury." Id. at 607. The Court held that under the
terms of the policy, David did not suffer his own bodily injury; instead, any injury to David
arose solely from the bodily injury his insured son sustained. Id.
{¶20} The Court concluded by noting that David could still pursue a wrongful
death claim, he just could not create insurance coverage where none existed. Id. at 608-
609. In sum, the Court held: "An insurer has no duty to defend or indemnify its insured in
a wrongful death lawsuit brought by a noninsured based on the death of an insured where
the policy excludes liability coverage for claims based on bodily injury to an insured." Id.
at the syllabus.
{¶21} We are faced with the same set of facts here as were present in Martin. An
insured under the Homeowner's Policy, Brian, suffered bodily injury resulting in death for
which nonresident, noninsured family members, Brian's adult children, filed a wrongful
death action against the insured policy holder, Shirley, via her estate. Like the father in
Martin, the wrongful death beneficiaries in this case did not suffer their own bodily injury.
Their only injury arose from the bodily injury sustained by Brian, who was an insured
under the Homeowner's Policy. And like the policy at issue in Martin, the Homeowner's
Policy here specifically excludes coverage for bodily injury to an insured. This is not to
say that Sterling cannot maintain a wrongful death action against Shirley's Estate.
Pursuant to Martin, American National has no duty under the Homeowner's Policy to
defend and indemnify Shirley's Estate on the wrongful death claim.
Duty to Defend – Automobile Policy
{¶22} We turn next to the Sterlings' Automobile Insurance Policy, which provides
in relevant part:
DEFINITIONS USED THROUGHOUT THIS POLICY
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***
(4) "Bodily injury" means bodily injury to a human being, and sickness,
disease, or death which results from it.
(5) "Insured" or "Insured person" means the person, persons, or
organization defined as an insured person in or with reference to a specific
coverage.
***
(7) "Occupying" means in, on, getting into, or out of.
***
(11) "Relative" means a person living with you and related to you by blood,
marriage, or adoption, including your ward or foster child, provided neither
the relative nor the relative's spouse owns, in whole or in part, a car.
***
PART I – LIABILITY
COVERAGE A – BODILY INJURY AND COVERAGE B – PROPERTY
DAMAGE
We will pay damages for which an insured person becomes legally liable
because of bodily injury or property damage resulting from the
ownership, maintenance, or use of your insured car or a non-owned car.
***
EXCLUSIONS
There is no coverage under PART I – LIABILITY:
***
(10) for bodily injury to any insured person or any member of your
family living with you;
PART II – EXPENSES FOR MEDICAL SERVICES
COVERAGE C – MEDICAL PAYMENTS COVERAGE
We will pay reasonable medical expenses actually incurred by an insured
person because of bodily injury caused by accident. * * *
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***
ADDITIONAL DEFINITION USED IN PART II ONLY
As used in this Part, "insured person" means:
(1) You or a relative for bodily injury sustained:
(a) While occupying your insured car;
{¶23} The parties agree that Brian and Shirley were both named insureds and
relatives under the Automobile Policy, and that the vehicle Shirley drove, parked in the
garage and failed to turn off, was an insured car.
{¶24} American National argues that because the policy expressly provides there
is no coverage for bodily injury to an insured person or any member of the insured's
family, both Brian and Shirley are specifically excluded from coverage for Shirley's
negligence. Additionally, American National argues there is no coverage under the
Automobile Policy for medical expenses incurred by Brian because he was not occupying
his insured car when he sustained bodily injury, Brian was inside his home when he died.
{¶25} Conversely, Sterling argues the liability section of the Automobile Policy
provides coverage for damages that Shirley may be liable for as a result of her ownership,
maintenance, and/or use of her vehicle unless an exclusion applies. Sterling asserts the
policy only excludes coverage for bodily injury to an insured or a family member who lives
with the insured, that the wrongful death claimants did not live with Shirley and Brian, and
that the policy does not unambiguously exclude coverage for the non-bodily injury claims
by Brian's wrongful death beneficiaries.
{¶26} Sterling additionally argues that Martin is inapplicable in consideration of the
Automobile Policy because that case involved a homeowner's policy, which additionally
excluded claims for loss of services resulting from bodily injury to an insured, unlike the
Automobile Policy at hand. Sterling finally contends that while the exclusion applies only
to actual bodily injury up to a person's death, coverage for personal liability extends to
damages because of bodily injury as opposed to damages of actual bodily injury, noting
any ambiguity must be construed against the insurer.
{¶27} Although we are reviewing language from an automobile policy, Martin's
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analysis of the same issues regarding a homeowner's policy is equally applicable here.
The language in the Automobile Policy is clear and unambiguous. It specifically excludes
liability coverage for bodily injury to an insured person or any family member living with an
insured person. Thus, there is no liability coverage for Shirley negligently causing bodily
injury to Brian. Regarding Sterling's wrongful death claim, it stems exclusively from
Brian's bodily injury, and Brian is an insured under the Automobile Policy. "[A]n insurer
has no duty to defend or indemnify its insured in a wrongful death lawsuit brought by a
noninsured based on the death of an insured where the policy excludes liability coverage
for claims based on bodily injury to an insured." Martin at 609. Thus, Sterling's wrongful
death claim is excluded from coverage and American National has no duty to defend or
indemnify the Estate of Shirley Sterling.
{¶28} In conclusion, American National's assignment of error is meritorious. The
wrongful death claim stems exclusively from Brian's bodily injury. The clear,
unambiguous language in both policies specifically excludes liability coverage for bodily
injury to an insured person or any family member living with an insured person.
Decedents, Brian and Shirley, were insured persons under both policies. Therefore, there
is no liability coverage for Shirley for negligently causing bodily injury to Brian.
Accordingly, the judgment of the trial court is reversed, and declaratory judgment is
entered in favor of American National; specifically, that it has no duty to indemnify or
defend the Estate of Shirley Sterling against any claims for wrongful death brought by the
beneficiaries of Brian Sterling and his estate.
Donofrio, J., dissents with dissenting opinion.
Vukovich, J., concurs.
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DONOFRIO, J. dissenting.
{¶29} For the following reasons, I respectfully dissent in part from the majority’s
opinion.
{¶30} I agree with the majority’s resolution regarding the Homeowner’s Policy. I
too would find that American National has no duty under the Homeowner’s Policy to
defend and indemnify the Estate of Shirley Sterling on the wrongful death claim.
{¶31} I write separately because I disagree with the majority’s resolution regarding
the Automobile Policy. I would find that Cincinnati Indemn. Co. v. Martin, 85 Ohio St. 3d
604,605, 707 N.E.2d 677 (1999), is distinguishable as applied to the Automobile Policy.
Therefore, I would affirm the trial court’s finding that American National had a duty to
defend and indemnify the Estate of Shirley Sterling under the Automobile Policy.
{¶32} The Automobile Policy differs from the Homeowners’ Policy in a significant
respect. Under the Homeowner’s Policy the definition of “bodily injury” is “bodily harm,
sickness, or disease, including required care, loss of services, and death resulting
therefrom.” (Emphasis added.) This definition is substantially similar to the definition of
“bodily injury” in Martin, 85 Ohio St. 3d at 606, which also included “loss of services”
resulting from bodily injury. Under the Automobile Policy, however, “bodily injury” means
“bodily injury to a human being, and sickness, disease, or death which results from it.” It
does not include “loss of services” resulting from bodily injury as do the Homeowner’s
Policy in this case and the homeowner’s policy at issue in Martin, supra.
{¶33} Due to this difference in the policies, Martin is distinguishable from this case
with respect to the Automobile Policy. Under the Homeowner’s Policy, loss of services,
which would encompass a wrongful death claim, was specifically included in the definition
of “bodily injury.” Therefore, under the exclusions, which excluded coverage for bodily
injury to an insured, coverage was necessarily excluded for loss of services resulting from
bodily injury to an insured, i.e., a wrongful death claim. The policy language was clear
and unambiguous.
{¶34} Under the Automobile Policy, however, loss of services is not included in the
definition of “bodily injury.” Therefore, loss of services resulting from bodily injury to an
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insured, i.e., a wrongful death claim, is not specifically excluded under the exclusions for
bodily injury to any insured person. Because it is not specifically excluded, an ambiguity
exists as to whether the policy provides coverage for the loss of services resulting from
bodily injury to an insured. “Where provisions of a contract of insurance are reasonably
susceptible of more than one interpretation, they will be construed strictly against the
insurer and liberally in favor of the insured.” King v. Nationwide Ins. Co., 35 Ohio St. 3d
208, 519 N.E.2d 1380 (1988), syllabus. Therefore, I would construe the ambiguity in this
case in favor of Sterling and in favor of finding coverage under the Automobile Policy.