DocketNumber: Case No. 03CA2729.
Citation Numbers: 2004 Ohio 949
Judges: KLINE, P.J.
Filed Date: 1/27/2004
Status: Non-Precedential
Modified Date: 4/18/2021
{¶ 3} Detillion received the full policy limit of $12,500.00 from the Tortfeasor's insurer in settlement of his claims against her. Detillion then filed suit against State Farm Mutual Automobile Insurance Company ("State Farm"), Stauffer's insurer, and John Doe, who Detillion believed to be an insurance company issuing policies of motor vehicle insurance to Thomson, his employer at the time of the accident. Detillion later amended the complaint to identify Pacific and Lumbermens as the previously unknown John Doe Defendants.
{¶ 4} Thomson was the named insured under three separate insurance policies, to wit: a business auto policy ("business auto policy") and commercial general liability policy ("CGL") issued by Pacific; and, a commercial umbrella policy ("umbrella policy") issued by Lumbermens. Detillion argues that these policies are motor vehicle policies within the meaning of former R.C.
{¶ 5} After filing their answers in response to Detillion's complaint, both Pacific and Lumbermens filed motions for summary judgment alleging that Ohio law did not apply to the interpretation of the various insurance policies.
{¶ 6} With regard to the business auto policy, Pacific also advanced arguments that: 1) Detillion's settlement and release with the Tortfeasor breached the policy conditions; 2) the policy only covered employees acting in the scope of their employment; 3) the "drive other car" endorsement precluded coverage; 4) Detillion was not occupying a covered auto at the time of the accident; and, 5) any claim Detillion might have was subject to a $250,000.00 deductible.
{¶ 7} Pacific further argued that there was no UM/UIM coverage under the CGL policy because: 1) it was not a motor vehicle policy pursuant to former R.C.
{¶ 8} In addition to the argument that Ohio law did not apply, Lumbermens advanced arguments that: 1) the umbrella policy it issued to Thomson was not applicable to Detillion because the terms of the policy require exhaustion of the underlying insurance policies before any coverage is available; 2) Detillion did not qualify as an insured under the Lumbermens umbrella policy, in that the policy specifically defined "who is an insured" to include employees acting in the scope of employment while performing duties related to the conduct of business; 3) the arguments advanced in Pacific's motion for summary judgment with regard to lack of coverage pursuant to the underlying policies were equally applicable to the umbrella policy.
{¶ 9} The trial court granted summary judgment in favor of Pacific and Lumbermens, finding they were entitled to judgment as a matter of law because negotiation and performance of the insurance policies occurred in either Indiana or Illinois, but not Ohio, and therefore, Ohio law did not govern the dispute. In doing so, the trial court noted that the business auto policy did not provide uninsured motorist coverage in Ohio, nor did it reference any vehicles in Ohio. Therefore, the trial court inferred that the parties to the contract anticipated that the principle risk would not occur in Ohio. Because the trial court concluded Ohio law did not govern the dispute, and Detillion advanced no legal basis for recovery under the business auto policy other than Scott-Pontzer, a unique creature of Ohio law, the trial court concluded that Detillion did not meet the definition of an insured under the Pacific business auto policy.
{¶ 10} With regard to the Pacific CGL policy, the trial court concluded that the policy's coverage for "[p]arking an auto on, or on the ways next to, premises you own or rent, provided the `auto' is not owned by or rented or loaned to you or the insured," provided only incidental automobile liability coverage. Therefore, the trial court determined that the CGL policy is not an automobile or motor vehicle liability policy such that the insurer was required to provide UM/UIM coverage. Additionally, the trial court found that the CGL policy defined an insured to include employees only for acts within the scope of their employment or while performing duties related to the conduct of the business. Because Detillion admitted he was not acting in the scope of his employment at the time of the accident, the trial court concluded that Detillion was not an insured under the policy.
{¶ 11} Finally, with regard to the Lumbermens umbrella policy, the trial court found that the parties did not dispute that the policy provided only excess coverage to the underlying policies issued by Pacific. Having determined that Detillion was not an insured entitled to recover from the underlying policies, the trial court concluded that Detillion could not recover from Lumbermens under the umbrella policy. The trial court also noted that even if the umbrella policy did provide primary coverage, Detillion did not qualify as an insured pursuant to the terms of the policy.
{¶ 12} Detillion filed a timely notice of appeal raising the following assignments of error: "I. The trial court erred in granting Pacific's motion for summary judgment;" and "II. The trial court erred in granting Lumbermens' motion for summary judgment." In its brief, Lumbermens raises the following cross-assignment of error: "Appellant Randy Detillion is not entitled to coverage under the Lumbermens commercial umbrella policy since he failed to satisfy the policy's preconditions to coverage."3
{¶ 14} The burden of showing that no genuine issue of material fact exists falls upon the party requesting summary judgment. Dresher v. Burt (1996),
{¶ 15} We interpret insurance contracts using the identical standards of interpretation we apply to other written contracts.Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd. (1992),
{¶ 16} In both of his assignments of error, Detillion argues that the trial court erred in finding that Ohio law did not govern the dispute. Because Detillion's two assignments of error are interrelated, we address them together.
{¶ 17} In determining that Ohio law did not apply to Detillion's claims, the trial court relied upon the Ohio Supreme Court's decision in Ohayon v. Safeco Ins. Co. of Illinois
(2001),
{¶ 18} Section 187 of the Restatement of Conflicts provides that, subject to very limited exceptions, the law of the state chosen by the parties to a contract will govern their contractual rights and duties. Further, "Section 188 provides that, in the absence of an effective choice of law by the parties, their rights and duties under the contract are determined by the law of the state that, with respect to that issue, has `the most significant relationship to the transaction and the parties.' Restatement at 575, Section 188(1). To assist in making this determination, Section 188(2)(a) through (d) more specifically provides that courts should consider the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the domicile, residence, nationality, place of incorporation, and place of business of the parties."Ohayon,
{¶ 19} Here, the parties to the insurance contracts did not include choice of law provisions. Therefore, pursuant to Section 188 of the Restatement, we must look to the state with the most significant relationship to the transaction and the parties. The record reflects that Pacific, apparently a Pennsylvania company, acting through an agent located and doing business in Illinois, issued the business auto and CGL policies to Thomson Consumer Electronics in Indiana. Similarly, Lumbermens, a company with its principle place of business in Illinois, issued the umbrella policy to Thomson Consumer Electronics in Indiana through an Illinois agent.
{¶ 20} While all of the policies at issue contemplated coverage of the Thomson Consumer Electronics facility, in Circleville, Ohio, Thomson did not report any vehicles as being located in the State of Ohio. Therefore, based upon the factors enumerated in Section 188 of the Restatement, application of the laws of Illinois or Indiana would be most appropriate here.
{¶ 21} However, Detillion argues that Ohio law is applicable to the facts of this case based upon the Ohio Supreme Court's decision in Henderson v. Lincoln Natl. Specialty Ins. Co.
(1994),
{¶ 22} Detillion further argues that Ohio law should apply because Ohio has the most significant relationship to the transaction and the parties. He cites Glover v. Smith, Hamilton App. Nos. C-020192 and C-020205, 2003-Ohio-1020, for the proposition that "Ohio has by far the greatest interest in the subject matter in dispute" based upon the location of the accident, the Ohio domicile of both drivers, and the "likelihood that the vehicle involved in the accident was garaged in Ohio."
{¶ 23} However, the facts in Glover are distinguishable from the facts of this case in that the company insured inGlover had stores located and vehicles garaged in Ohio. Here, Thomson had a manufacturing facility located in Ohio, but, at the time the insurance policy was issued, reported no vehicles garaged in Ohio. Nor does the record reflect that Thomson had vehicles garaged in Ohio at the time of the accident. We find that, even if Ohio is the location of the accident, the state of domicile of both drivers, and the place that the vehicles involved in the accident were garaged, the focus of the inquiry is the state with the most significant relationship to thecontracting parties, not the parties to this suit. Thus, Detillion's choice of law argument must fail.
{¶ 24} Detillion has advanced no argument that either Illinois or Indiana follows the decision of the Ohio Supreme Court in Scott-Pontzer on which he relies. Nor are we aware of any such authority.
{¶ 25} Although it appears that the Illinois courts have not addressed the identical issue before this court, at least one Illinois appeals court has interpreted policy language identical to that at issue in Scott-Pontzer, with regard to coverage for family members. In doing so, the court determined that, where the named insured is a corporation, uninsured motorist coverage does not extend to cover employees or family members of employees for accidents that do not involve occupancy of covered vehicles. Further, the court concluded that to extend such coverage would be to rewrite the policy. Economy Preferred Ins. Co. v. JerseyCty. Const., Inc. (1993),
{¶ 26} We also note that at least one Indiana court has addressed the meaning of the infamous "you" when the "named insured" is a corporation. See, e.g., Peterson v. Universal Fireand Cas. Ins. Co. (1991),
{¶ 27} The Ohio Supreme Court noted in Westfield Ins. Co. v.Galatis (2003),
{¶ 28} Further, the Supreme Court has noted, "theScott-Pontzer rationale stands in stark contrast with decisions of the vast majority of states that have considered similar issues." Id., citing Concrete Services, Inc. v. United StatesFid. Guar. Co. (1998),
{¶ 29} Based upon the decisions of the Illinois and Indiana courts of appeal discussed above, the widespread criticism of the Ohio Supreme Court's decision in Scott-Pontzer, and the Court's recent limitation of the application the Scott-Pontzer decision in Galatis to employees acting within the scope of employment, we agree with the trial court's conclusion that Scott-Pontzer is not applicable under the laws of Illinois and Indiana.
{¶ 32} In Scott-Pontzer, the Ohio Supreme Court held that an uninsured motorist endorsement that identifies "you" as the named insured where "you" refers to a corporation extends coverage to an employee outside the scope and course of employment. However, as we have discussed above, the Ohio Supreme Court recently limited the application of its holding inScott-Pontzer, stating "[a]bsent specific language to the contrary, a policy of insurance that names a corporation as an insured for uninsured or underinsured motorist coverage covers a loss sustained by an employee of the corporation only if the loss occurs within the course and scope of employment." Galatis, 100 Ohio St.3d at ¶ 62. Because Detillion admits that he was not acting within the course and scope of his employment at the time of the loss, and the fact that there is no specific language providing coverage for employees outside the course and scope of their employment in the business auto policy, he cannot prevail on his claim for coverage under that insurance policy.
{¶ 34} Here, however, even if we presume that Pacific was required to offer UM/UIM coverage in connection with the CGL policy pursuant to former R.C.
{¶ 36} Detillion argues that he is an insured under "Coverage A" of the umbrella policy by virtue of the fact that he qualifies as an insured under the underlying primary policies issued to his employer. However, as we have previously discussed, Detillion does not qualify as an insured under the underlying insurance policies because he was not acting in the course and scope of his employment at the time of the accident.
{¶ 37} Detillion does not argue that "Coverage B" applies or that he qualifies as an insured under that portion of the umbrella policy. However, Section III of the policy defines "who is an insured" to include the following: "1. If you are designated in the Declarations as: * * * c. An organization other than a partnership or joint venture, you are an insured. Your `executive officers' and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are insureds, but only with respect to their liability as stockholders." Section III further provides: "6. Each of the following is also an insured: a. Your `employees," other than your `executive officers,' but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business." Thus, Detillion does cannot qualify as an insured pursuant to the terms of "Coverage B" under the umbrella policy.
{¶ 38} Based upon the foregoing, we find that Detillion is not an insured under the Lumbermens umbrella policy and therefore cannot prevail on his claims against Lumbermens.
{¶ 40} In conclusion, we find that either Illinois or Indiana law is applicable to the facts of this case, and that neither jurisdiction recognizes the Ohio Supreme Court's holding inScott-Pontzer. We also find that even if Ohio law were applicable to the facts presented here, Detillion is not an insured under the UM/UIM coverage of the Pacific business auto, Pacific CGL, or Lumbermens umbrella policies issued to Thomson Consumer Electronics pursuant to the Ohio Supreme Court's recent holding in Galatis. We find that there is no genuine issue as to any material fact, Pacific and Lumbermens are entitled to judgment as a matter of law, and reasonable minds can come to only one conclusion, and that conclusion is adverse to Detillion.
{¶ 41} Accordingly, we overrule Detillion's two assignments of error and affirm the judgment of the trial court.
JUDGMENT AFFIRMED.
Harsha, J., Concurs in Judgment and Opinion.
Concurs in Judgment Only as to Part III-B.
Abele, J., Concurs in Judgment and Opinion.
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Peterson v. Universal Fire & Casualty Insurance Co. , 572 N.E.2d 1309 ( 1991 )
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Lawler v. Fireman's Fund Insurance , 163 F. Supp. 2d 841 ( 2001 )
Szabo v. CGU International Insurance, PLC , 227 F. Supp. 2d 820 ( 2002 )