Opinion
Case No. 1998CA00161
January 11, 1999
CHARACTER OF PROCEEDING:
Civil Appeal from the Court of Common Pleas, Case No. 1997CV00390.
JUDGMENT:
Reversed and Remanded
APPEARANCES:
For Plaintiff-Appellee
DOUGLAS J. O'MEARA.
For Defendant-Appellant
JOHN V. RASMUSSEN.
Hon. W. Scott Gwin, P. J., Hon. W. Don Reader, J., Hon. John W. Wise, J., JUDGES.
Summary Judgment Standard
Summary judgment proceedings present the appellate court with the unique opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36. As such, we must refer to Civ.R. 56 which provides, in pertinent part:
Summary judgment shall be rendered forthwith if the pleading, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. * * * A summary judgment shall not be rendered unless it appears from such evidence or stipulation and only therefrom, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor.
Pursuant to the above rule, a trial court may not enter summary judgment if it appears a material fact is genuinely disputed. The party moving for summary judgment bears the initial burden of informing the trial court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. The moving party may not make a conclusory assertion that the non-moving party has no evidence to prove its case. The moving party must specifically point to some evidence which demonstrates the non-moving party cannot support its claim. If the moving party satisfies this requirement, the burden shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Vahila v. Hall (1997), 77 Ohio St.3d 421, 429, citing Dresher v. Burt (1996), 75 Ohio St.3d 280. It is based upon this standard that we review appellant's assignment of error.
In its sole assignment of error, Liberty contends the trial court erred, as a matter of law, finding appellee's decedent was an insured under the policy issued by Liberty to Canton Drop Forge. We agree.
It is well-settled law, in the State of Ohio, that "[l]anguage in a contract of insurance reasonably susceptible of more than one meaning will be construed liberally in favor of the insured and strictly against the insurer." Buckeye Union Ins. Co. v. Price (1974), 39 Ohio St.2d 95, syllabus. Therefore, absent any ambiguity, the words of a policy must be given their plain and ordinary meaning. Burris v. Grange Mut. Co. (1989), 46 Ohio St.3d 84, 89.
The language contained in Liberty's policy, at issue on appeal, provides as follows under the uninsured motorist endorsements:
1. You.
2. If you are an individual, any family member.
3. Anyone else occupying a covered auto or temporary substitute for a covered auto. The covered auto must be out of service because of its breakdown, repair, servicing, loss or destruction.
4. Anyone for damages he or she is entitled to recover because of bodily injury sustained by another insured.
Pursuant to the above language, Liberty argues the term "you" refers to Canton Drop Forge. Decedent is not a named insured on the policy, and thus, Liberty asserts decedent was not covered by the uninsured motorist endorsement. The trial court found there was a split of authority on how to deal with this type of language with insurance policies for corporations. The court found the only individuals who would be covered for bodily injury under the "who is an insured" section are those who are occupying a covered vehicle at the time of the accident. None of the other definitions would apply because a corporation cannot suffer bodily injury in and of itself.
We recently addressed this issue in the case of Headley v. Ohio Government Risk Management Plan (March 20, 1998), Muskingum App. No. CT97-0017, unreported. Although Headley dealt with underinsured coverage as opposed to uninsured coverage, Headley is still applicable as the policy language, at issue, is identical to the language in the policies in Headley. In Headley, as in the case sub judice, appellee refers to the cases of King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208 and Decker v. CNA Ins. Company (1990), 66 Ohio App.3d 576. We find both of these cases distinguishable from the facts of the case sub judice. Instead, we find the cases of Keider v. Fed. Insurance Co. (Nov. 9, 1995), Cuyahoga App. No. 69196, unreported; Kitts v. Utica National Ins. Group (1995), 106 Ohio App.3d 692; and Michigan Prop. Cas. Guar. Assoc. v. Booth (Sept. 2, 1992), Wayne App. No. 2722, unreported, applicable to the matter under consideration.
On July 1, 1998, the Ohio Supreme Court allowed this appeal. Supreme Court Case No. 98-0856.
We will begin our analysis of appellant's assignment of error by first distinguishing the King and Decker cases from the facts of the matter currently on appeal. In King, Dale Gordon, an employee of the Akron-Summit Community Action Agency ("ASCAA"), was killed while driving an automobile owned by Mildred Foster, a co-worker. King at 208. Gordon was in the course of his employment when the accident occurred. Id. After Gordon's estate received compensation from the negligent driver's bodily injury insurance policy and Foster's underinsured motorist insurance coverage, the executor of Gordon's estate sought further recovery under a contract of insurance issued by Nationwide Insurance Company ("Nationwide"), to ASCAA, which provided underinsured motorist insurance in the amount of $250,000. Id.
Nationwide denied King's claim and King filed a declaratory judgment action seeking a declaration that Gordon was an insured under the Nationwide policy and requesting an order for Nationwide to submit to arbitration of the claim. Id. at 208-209. Both parties filed motions for summary judgment and the trial court entered summary judgment for King finding Nationwide's underinsured motorist provision encompassed all ASCAA employees. Id. at 209. The court of appeals reversed the trial court finding that the policy covered only employees designated as drivers in named vehicles owned by ASCAA and since Gordon was not a designated driver, he was outside the scope of the coverage afforded by the policy. Id.
Upon appeal to the Ohio Supreme Court, the Court found that Gordon was covered by ASCAA's insurance policy issued by Nationwide. Id. In reaching this conclusion, the Court relied upon the following language contained in the "Definitions" section of the insurance policy and the language contained in the underinsured motorist provision regarding coverage. The "Definitions" section defines "YOU" and "YOUR" as follows:
DEFINITIONS
The language of this insurance policy includes certain common words for easy understanding. They have exactly defined meanings, however. In this policy:
1. The words "YOU" and "YOUR" mean or refer to the policyholder first named in the attached Declarations, and include that policyholder's spouse if living in the same household. Id.
The underinsured motorist provision provides, in pertinent part:
COVERAGE
Under this coverage, we will pay bodily injury damages that you or your legal representative are legally entitled to recover from the owner or driver of an * * * [underinsured] motor vehicle. Damages must result from an accident arising out of the ownership, maintenance, or use of the * * * [underinsured] vehicle. Bodily injury means bodily injury, sickness, disease, or death.
Relatives living in your household also have this protection. Anyone else is protected while occupying:
1. your auto.
2. A motor vehicle you do not own, while it substitutes temporarily for your auto. Your auto must be out of use because of breakdown, repair, servicing, loss, or destruction.
* * *
4. any other motor vehicle while it is being operated by you or a relative living in your household. However, the vehicle must not be owned or furnished to you or a relative living in your household for regular use. (Emphasis added.) Id. at 210.
In interpreting the above language, the Court first determined that the "YOU" referred to in the policy, was ASCAA. Id. at 212. In concluding that Gordon was covered by the policy issued by Nationwide, the Court stated:
The stipulations establish that Foster's automobile was loaned to Gordon for use in the scope of his employment. As such, it was operated by and for ASCAA, the "YOU" referred to in the contract. Therefore, the policy language at issue places Gordon in the position of "anyone else" who is entitled to protection "* * * while occupying any other motor vehicle while it is being operated by you [ASCAA] * * *." Id at 213.
Based upon the above interpretation of the language contained in the insurance contract issued by Nationwide, to ASCAA, the Court reversed the decision of the appellate court and reinstated the decision of the trial court. Id. at 214. In doing so, the Court held that "[w]here 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. [Citations omitted.]" Id. at syllabus.
Appellees also rely upon the Decker case. In Decker, the decedent, Robert Decker, was struck and killed by an automobile while jogging. Id. at 577. Decker had been employed by Envirodyne Industries ("Envirodyne"). Envirodyne provided Decker with a company car and insurance on the car, through CNA Insurance Company ("CNA"). Id. The executrix of Decker's estate sought to make a claim against the underinsured provisions of Envirodyne's insurance policy. Id. Envirodyne refused to recognize the claim and the executrix filed a declaratory judgment action. Id.
Under the terms of the policy, issued by CNA, the following persons were insured:
D. WHO IS INSURED
1. You or any family member.
2. Anyone else occupying a covered auto or a temporary substitute for a covered auto. The covered auto must be out of service because of breakdown, repair, servicing, loss or destruction.
3. Anyone for damages he is entitled to recover because of bodily injury sustained by another insured. Id. at 577-578.
Further, the policy defined "you" or "your" as "the person or organization shown as the named insured * * *." The policy defined "family member" as "a person related to you by blood, marriage or adoption who is a resident of your household * * *." Id. at 578. The trial court determined that based upon the above language, neither the decedent nor his estate were covered by the policy issued to Envirodyne by CNA.
On appeal, the court noted that it was faced with attempting to interpret the language "relatives living in your household". The court referred to the Ohio Supreme Court's decision in King, which addressed the above phrase, and found that the language, in the business entity context, was inherently ambiguous and must be construed in such a way as to include the insured. Id. at 580. In finding the decedent covered by the policy issued by CNA, the court relied upon the case of Home Indemnity Co. v. Plymouth (1945), 146 Ohio St. 96, paragraph two of the syllabus which held: "Where exceptions, qualifications or exemptions are introduced into an insurance contract, a general presumption arises to the effect that that which is not clearly excluded from the operation of such contract is included in the operation thereof."
"Thus, as a matter of law, [the Decker court reasoned,] in the interpretation of these provisions, courts have construed the language to include the employee under the protection of the policy." Id. at 582. The court of appeals reversed the trial court's decision and found decedent and his estate covered by the policy of insurance issued by CNA.
We find the facts of this case distinguishable from the above cases because the case sub judice does not involve the same policy language and provides coverage to some individuals. It is undisputed that the term "You", under the section defining who is an "insured", in the policy issued by Liberty, refers to Canton Drop Forge. Second, we find the phrase "if you are an individual, any family member" unambiguous. A plain reading of this provision establishes that the provision applies only when the insured is an individual. Unlike the policies in King and Decker, a distinction is made between "you" and "an individual". Category 2 language "if you are an individual, any family member" would apply in those situations where an insurance policy is issued to an individual operating a sole proprietorship. Keider at 3.
In the case sub judice, since the term "you" refers to the origin corporations, which are not individuals, the condition in category 2 is not satisfied because this provision does not extend coverage to "family members" unless the named insured is an individual. However, coverage is available under category 3 for those persons "occupying a covered auto" for bodily injury sustained due to an uninsured motorist. At the time of the accident, in the case sub judice, appellant was not operating a "covered auto". Clearly, the language contained in the policy, at issue in this case, is not such that only the corporation and no individuals sustaining bodily injury are entitled to coverage. Because appellee does not fit any of the categories of "insured" under the policy issued by Liberty, appellee is not to be included in coverage for injuries sustained due to an uninsured motorist.
Appellant's assignment of error is sustained.
For the foregoing reasons, the judgment of the Court of Common Pleas, Stark County, Ohio, is hereby reversed and remanded for further proceedings consistent with this opinion.
By: Wise, J. Reader, J., concurs.
Gwin, P. J., dissents.
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I dissent from the conclusion reached by the majority. I would find the policy issued by appellant is ambiguous and would construe the ambiguity against appellant and in favor of appellee, the injured insured.
The ambiguity I find lies in the term "you". The policy language contains the phrase "if you are an individual, any family member" [is an insured]. The policy does not finish the analysis: it does not go on to describe what happens if "you" are not an individual, but rather, as here, if "you" are a corporation. In other words, the language of the policy defines who are included or excluded if the insured is an individual but fails to specify who are included or excluded if the insured is a corporation. The majority proceeds to construe the existing language of the policy not in favor of the insured, but in favor of the insurance company. Here, it is clear "you" refers not to an individual, but to an organization. Canton Drop Forge is not capable of sustaining bodily injury. If we do not construe the policy language to cover employees of the company, we have in fact nullified the policy because there will be no insured capable of incurring and presenting claims. For what did the parties contract and for what were the premiums paid?
". . . A general presumption arises to the effect that that which is not clearly excluded from the operation of such contract is included in the operation thereof. " Home Indemnity Co., supra.
I would find the policy language does not "clearly exclude "appellant from coverage, and I would affirm the trial court's judgment.
--------------------- JUDGE W. SCOTT GWIN
For the reasons stated in the Memorandum-Opinion on file, the judgment of the Court of Common Pleas of Stark County, Ohio, is reversed and remanded for further proceedings consistent with this opinion.
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