[Cite as Acuity, Mut. Ins. Co. v. Progressive Specialty Ins. Co., 2022-Ohio-1816.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY
ACUITY, A MUTUAL INSURANCE CASE NO. 2021-P-0001 COMPANY,
Plaintiff-Appellant, Civil Appeal from the Court of Common Pleas -v-
PROGRESSIVE SPECIALTY Trial Court No. 2020 CV 00508 INSURANCE COMPANY, et al.,
Defendant-Appellee.
OPINION
Decided: May 31, 2022 Judgment: Reversed and remanded
Douglas G. Leak, Kenneth A. Calderone, and John R. Chlysta, Hanna, Campbell & Powell, LLP, 3737 Embassy Parkway, Suite 100, Akron, OH 44333 (For Plaintiff- Appellant).
David L. Lester and David G. Utley, Collins, Roche, Utley & Garner, LLC, 520 South Main Street, Suite 2551, Akron, OH 44311 (For Defendant-Appellee).
MARY JANE TRAPP, J.
{¶1} This case presents an issue of competing insurance policies for liability
coverage of a motor vehicle collision where the driver was not the owner of the vehicle
but had the owner’s permission to drive the vehicle. Appellant, Acuity, A Mutual Insurance
Company (“Acuity”), appeals the judgment of the Portage County Court of Common
Pleas, which granted summary judgment to appellee, Progressive Specialty Insurance
Company (“Progressive”), on the issue of liability coverage after finding that the “other insurance” provisions did not conflict since the driver did not meet the definition of an
“insured” under Progressive’s policy.
{¶2} In its sole assignment of error, Acuity contends that, notwithstanding the
definition of “insured” under Progressive’s policy, when one insurer’s policy provides
excess liability coverage for an accident (an “excess” clause), and the other insurer
attempts to avoid coverage through an “escape” clause, the escape clause is
unenforceable, and that policy becomes primary. Thus, Acuity argues Progressive should
be primarily liable for the motor vehicle accident.
{¶3} After a careful review of the record and pertinent law, we find Acuity’s
argument to be with merit insofar as the trial court failed to apply the Supreme Court of
Ohio’s holding in State Farm Mut. Auto. Ins. Co. v. Home Indem. Ins. Co., 23 Ohio St.2d
45, 261 N.E.2d 128 (1970) (“State Farm”): “[w]here an insurance policy insures a loss
‘only if no other valid and collectible automobile liability insurance * * * is available,’ and
another insurance policy insures the same loss only as to the ‘excess over collectible
insurance,’ the latter provision will be given effect; thus, the former policy will be held to
furnish the insurance for the loss.” Id. at syllabus. Progressive’s definition of insured is
an escape clause – to find otherwise would be elevating form over substance. See id. at
47.
{¶4} Acuity’s analysis must be taken one step further, however, since once
Progressive’s escape clause is negated, we are left with two competing excess clauses.
Therefore, we must apply the Supreme Court of Ohio’s holding in Buckeye Union Ins. Co.
v. State Auto. Mut. Ins. Co., 49 Ohio St.2d 213, 361 N.E.2d 1052 (1977), which adopted
a method of proration in which “the two insurers become liable in proportion to the amount
of insurance provided by their respective policies.” Id. at 218. 2
Case No. 2021-P-0001 {¶5} Thus, we reverse the judgment of the Portage County Court of Common
Pleas granting summary judgment in favor of Progressive and remand to the trial court to
enter judgment based on the proration method in accordance with this opinion.
Substantive and Procedural Facts
{¶6} In August 2020, Acuity filed a complaint for declaratory judgment to
determine the coverage offered by two different insurance policies in a single-vehicle
accident.
{¶7} On June 4, 2020, Ashton Smith (“Mr. Smith”) was the permissive driver of a
2010 Toyota Corolla owned by Emily Willingham-Schiavoni. There were three
passengers in the vehicle: Nicolas Willingham, Anthony G. Sagaris, and Robert A.
Sagaris. Mr. Smith lost control of the vehicle while driving and went off of the road, striking
a utility pole.
{¶8} At the time of the accident, Progressive maintained an automobile liability
insurance policy on the Toyota Corolla that Mr. Smith was driving, and Acuity maintained
an automobile liability policy on Eric P. Smith, the named insured, which included Mr.
Smith as a listed driver. Both policies had liability limits of $100,000 per person and
$300,000 per accident.
{¶9} In its complaint, Acuity contended that because the Toyota was not owned
by Mr. Smith, its coverage was excess due to the “other insurance” provision in its policy,
which states that its coverage “is excess over any other collectible auto liability
insurance.” Acuity further argued that Progressive’s policy covers permissive users of
the vehicle and that its policy contains an “escape” clause, which, contrary to Ohio law,
purports to negate coverage if an insured has other coverage.
Case No. 2021-P-0001 {¶10} Acuity, citing State Farm, supra, argued that according to established
Supreme Court of Ohio precedent, when one policy contains escape language while
another contains excess language, the excess language prevails, and the policy with the
escape language provides primary coverage.
{¶11} Relevant to this appeal, Acuity demanded judgment determining and
declaring that Progressive’s policy was either primary to Acuity’s excess coverage or,
alternatively, applies pro-rata with Acuity’s coverage.
{¶12} Progressive filed an answer with a counterclaim and cross-claim for
declaratory judgment, asserting in one of its defenses that its policy defined “insured
person” for liability coverage, in pertinent part, as “any person who is not insured for
liability coverage by any other insurance policy * * * with respect to an accident arising
out of that person’s use of a covered auto with the permission of you, a relative, or a
rated resident.” (Emphasis sic.) Thus, Mr. Smith was not an “insured person” under
Progressive’s policy since he was a listed driver under Acuity’s policy and was insured
for liability coverage under that policy for the accident. Therefore, by its own terms, since
there was no “other applicable liability insurance,” Acuity’s other insurance clause did not
apply.
{¶13} Progressive demanded judgment determining and declaring that Mr. Smith
was not an “insured” person for liability coverage under the Progressive policy and that it
had no duty to defend or indemnify him as to any claims arising from the accident.
The Policies
{¶14} In relevant part, Progressive’s Policy defines an “Insured person” under
Additional Definitions for Part I – Liability to Others, as:
Case No. 2021-P-0001 {¶15} “a. you, a relative, or a rated resident with respect to an accident arising
out of the ownership, maintenance or use of an auto or a trailer;
{¶16} “b. any person who is not insured for liability coverage by any other
insurance policy, self-insurance program, or financial responsibility bond with respect to
an accident arising out of that person’s use of a covered auto with the permission of you,
a relative, or a rated resident;
{¶17} “c.
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[Cite as Acuity, Mut. Ins. Co. v. Progressive Specialty Ins. Co., 2022-Ohio-1816.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY
ACUITY, A MUTUAL INSURANCE CASE NO. 2021-P-0001 COMPANY,
Plaintiff-Appellant, Civil Appeal from the Court of Common Pleas -v-
PROGRESSIVE SPECIALTY Trial Court No. 2020 CV 00508 INSURANCE COMPANY, et al.,
Defendant-Appellee.
OPINION
Decided: May 31, 2022 Judgment: Reversed and remanded
Douglas G. Leak, Kenneth A. Calderone, and John R. Chlysta, Hanna, Campbell & Powell, LLP, 3737 Embassy Parkway, Suite 100, Akron, OH 44333 (For Plaintiff- Appellant).
David L. Lester and David G. Utley, Collins, Roche, Utley & Garner, LLC, 520 South Main Street, Suite 2551, Akron, OH 44311 (For Defendant-Appellee).
MARY JANE TRAPP, J.
{¶1} This case presents an issue of competing insurance policies for liability
coverage of a motor vehicle collision where the driver was not the owner of the vehicle
but had the owner’s permission to drive the vehicle. Appellant, Acuity, A Mutual Insurance
Company (“Acuity”), appeals the judgment of the Portage County Court of Common
Pleas, which granted summary judgment to appellee, Progressive Specialty Insurance
Company (“Progressive”), on the issue of liability coverage after finding that the “other insurance” provisions did not conflict since the driver did not meet the definition of an
“insured” under Progressive’s policy.
{¶2} In its sole assignment of error, Acuity contends that, notwithstanding the
definition of “insured” under Progressive’s policy, when one insurer’s policy provides
excess liability coverage for an accident (an “excess” clause), and the other insurer
attempts to avoid coverage through an “escape” clause, the escape clause is
unenforceable, and that policy becomes primary. Thus, Acuity argues Progressive should
be primarily liable for the motor vehicle accident.
{¶3} After a careful review of the record and pertinent law, we find Acuity’s
argument to be with merit insofar as the trial court failed to apply the Supreme Court of
Ohio’s holding in State Farm Mut. Auto. Ins. Co. v. Home Indem. Ins. Co., 23 Ohio St.2d
45, 261 N.E.2d 128 (1970) (“State Farm”): “[w]here an insurance policy insures a loss
‘only if no other valid and collectible automobile liability insurance * * * is available,’ and
another insurance policy insures the same loss only as to the ‘excess over collectible
insurance,’ the latter provision will be given effect; thus, the former policy will be held to
furnish the insurance for the loss.” Id. at syllabus. Progressive’s definition of insured is
an escape clause – to find otherwise would be elevating form over substance. See id. at
47.
{¶4} Acuity’s analysis must be taken one step further, however, since once
Progressive’s escape clause is negated, we are left with two competing excess clauses.
Therefore, we must apply the Supreme Court of Ohio’s holding in Buckeye Union Ins. Co.
v. State Auto. Mut. Ins. Co., 49 Ohio St.2d 213, 361 N.E.2d 1052 (1977), which adopted
a method of proration in which “the two insurers become liable in proportion to the amount
of insurance provided by their respective policies.” Id. at 218. 2
Case No. 2021-P-0001 {¶5} Thus, we reverse the judgment of the Portage County Court of Common
Pleas granting summary judgment in favor of Progressive and remand to the trial court to
enter judgment based on the proration method in accordance with this opinion.
Substantive and Procedural Facts
{¶6} In August 2020, Acuity filed a complaint for declaratory judgment to
determine the coverage offered by two different insurance policies in a single-vehicle
accident.
{¶7} On June 4, 2020, Ashton Smith (“Mr. Smith”) was the permissive driver of a
2010 Toyota Corolla owned by Emily Willingham-Schiavoni. There were three
passengers in the vehicle: Nicolas Willingham, Anthony G. Sagaris, and Robert A.
Sagaris. Mr. Smith lost control of the vehicle while driving and went off of the road, striking
a utility pole.
{¶8} At the time of the accident, Progressive maintained an automobile liability
insurance policy on the Toyota Corolla that Mr. Smith was driving, and Acuity maintained
an automobile liability policy on Eric P. Smith, the named insured, which included Mr.
Smith as a listed driver. Both policies had liability limits of $100,000 per person and
$300,000 per accident.
{¶9} In its complaint, Acuity contended that because the Toyota was not owned
by Mr. Smith, its coverage was excess due to the “other insurance” provision in its policy,
which states that its coverage “is excess over any other collectible auto liability
insurance.” Acuity further argued that Progressive’s policy covers permissive users of
the vehicle and that its policy contains an “escape” clause, which, contrary to Ohio law,
purports to negate coverage if an insured has other coverage.
Case No. 2021-P-0001 {¶10} Acuity, citing State Farm, supra, argued that according to established
Supreme Court of Ohio precedent, when one policy contains escape language while
another contains excess language, the excess language prevails, and the policy with the
escape language provides primary coverage.
{¶11} Relevant to this appeal, Acuity demanded judgment determining and
declaring that Progressive’s policy was either primary to Acuity’s excess coverage or,
alternatively, applies pro-rata with Acuity’s coverage.
{¶12} Progressive filed an answer with a counterclaim and cross-claim for
declaratory judgment, asserting in one of its defenses that its policy defined “insured
person” for liability coverage, in pertinent part, as “any person who is not insured for
liability coverage by any other insurance policy * * * with respect to an accident arising
out of that person’s use of a covered auto with the permission of you, a relative, or a
rated resident.” (Emphasis sic.) Thus, Mr. Smith was not an “insured person” under
Progressive’s policy since he was a listed driver under Acuity’s policy and was insured
for liability coverage under that policy for the accident. Therefore, by its own terms, since
there was no “other applicable liability insurance,” Acuity’s other insurance clause did not
apply.
{¶13} Progressive demanded judgment determining and declaring that Mr. Smith
was not an “insured” person for liability coverage under the Progressive policy and that it
had no duty to defend or indemnify him as to any claims arising from the accident.
The Policies
{¶14} In relevant part, Progressive’s Policy defines an “Insured person” under
Additional Definitions for Part I – Liability to Others, as:
Case No. 2021-P-0001 {¶15} “a. you, a relative, or a rated resident with respect to an accident arising
out of the ownership, maintenance or use of an auto or a trailer;
{¶16} “b. any person who is not insured for liability coverage by any other
insurance policy, self-insurance program, or financial responsibility bond with respect to
an accident arising out of that person’s use of a covered auto with the permission of you,
a relative, or a rated resident;
{¶17} “c. any person or organization with respect only to vicarious liability for the
acts or omissions of a person described in a. or b. above; and
{¶18} “d. any ‘Additional Interest’ shown on the declarations page with respect
only to its liability for the acts or omissions of a person described in a. or b. above.”
(Emphasis sic.)
{¶19} The policy’s “Other Insurance” provision under Part I states, “If there is any
other applicable liability insurance or bond, we will pay only our share of the damages.
Our share is the proportion that our limit of liability bears to the total of all applicable
limits. However, any insurance we provide for a vehicle or trailer, other than a covered
auto, will be excess over any other collectible insurance, self-insurance, or bond. Any
insurance we provide for use of a covered auto by any person other than you will be
excess over any other collectible insurance, self-insurance, or bond.” (Emphasis sic.)
{¶20} Acuity’s policy defines an “insured person” under Part I, Liability, as:
{¶21} “1. You for the ownership, maintenance or use of your insured car.
{¶22} “2. Any person while using your insured car with your permission or that
of any adult member of your household.
{¶23} “3. You or a relative while using a car or other utility trailer other than
your insured car with a reasonable belief of having permission to do so. 5
Case No. 2021-P-0001 {¶24} “4. Any other person or organization with respect only to legal liability for
acts or omissions of:
{¶25} “a. Any person covered under this Part while using your insured car.
{¶26} “b. You or any relative covered under this Part while using any car or utility
trailer other than your insured car if the car or utility trailer is not owned or hired by
that person or organization.” (Emphasis sic.)
{¶27} The “excess clause” is in the “Other Insurance” provision under Liability,
Part I and states, “If there is other applicable auto liability insurance on a loss covered by
this Part, we will pay our proportionate share as our limits of liability bear to the total of
all applicable liability limits. But, insurance afforded under this Part for a vehicle you do
not own is excess over any other collectible auto liability insurance.” (Emphasis sic.)
Summary Judgment
{¶28} Both parties filed summary judgment motions, each arguing that the other’s
policy provided primary coverage.
{¶29} The trial court found Progressive’s motion for summary judgment well-taken
and granted it as to liability coverage. More specifically, the court found that Mr. Smith
was not an “insured person” for liability coverage under Progressive’s policy. Therefore,
Progressive had no duty to defend or indemnify him as to any claims arising from the
June 4, 2020, accident. Further, Acuity did have a duty to defend or indemnify Mr. Smith
for any bodily injury and property damage claims arising from the accident. The trial court
denied Acuity’s motion for summary judgment as to liability coverage, finding that
because Mr. Smith was not an “insured person” under Progressive’s policy, no “other
insurance” issue was presented. The trial court granted summary judgment to
Case No. 2021-P-0001 Progressive on Acuity’s complaint and on Progressive’s counterclaim and cross-claim for
declaratory judgment as to liability coverage.
{¶30} Acuity raises one assignment of error on appeal:
{¶31} “The trial court erred in granting Progressive’s motion for summary
judgment and denying Acuity’s motion for summary judgment on the liability-coverage
issue.”
Standard of Review
{¶32} Once a trial court determines that a matter is appropriate for declaratory
judgment, its holdings regarding questions of law are reviewed on a de novo basis. Arnott
v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-3208, 972 N.E.2d 586, ¶ 13.
{¶33} Furthermore, this case comes before us on summary judgment. Pursuant
to Civ.R. 56(C), summary judgment is appropriate when there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law. Holik v.
Richards, 11th Dist. Ashtabula No. 2005-A-0006, 2006-Ohio-2644, ¶ 12, citing Dresher
v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996). In addition, it must appear from
the evidence and stipulations that reasonable minds can come to only one conclusion,
which is adverse to the nonmoving party. Id. citing Civ.R. 56(C). The standard in which
we review the granting of a motion for summary judgment is de novo. Id., citing Grafton
v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).
Analysis
{¶34} In Acuity’s sole assignment of error, it contends the trial court erred in
awarding summary judgment in favor of Progressive and denying its motion for summary
judgment on the liability-coverage issue. More specifically, Acuity argues the trial court
erred in failing to apply the Supreme Court of Ohio’s decision in State Farm, supra. 7
Case No. 2021-P-0001 {¶35} In State Farm, State Farm insured the driver, who was driving another car
with the permission of its owner and was involved in a collision. State Farm satisfied the
claims and then brought action against Home Indemnity under a policy issued by the latter
to the owner of the borrowed car. Id. at 45-46. Both conceded that were it not for the
“other language” in each, the driver would be covered under both policies. Conversely, if
both policies were given full effect, neither policy would cover the loss. Id. at 46.
{¶36} The Home Indemnity policy contained an “escape” provision, similar to
Progressive’s provision, stating that it would provide coverage to a person using the
covered auto with permission of the named insured “but only if no other valid and
collectible automobile liability insurance, either primary or excess * * * is available to such
person.” Id.
{¶37} State Farm’s “excess” clause conceded no basic or primary liability, limiting
liability to the excess over other collectible insurance. As the court pointedly inquired,
“But before the policy can ride as excess insurance, the other policy must be made to
walk as primary insurance. Can it?” (Footnote omitted.) Id. at 47.
{¶38} Because Home Indemnity’s policy contained the language “no other primary
or excess” available to the driver, the Supreme Court of Ohio found this language
insufficient to prevent liability from attaching to the insurer, Home Indemnity, who
designed it. Id. at 48.
{¶39} Similarly here, Progressive’s “escape clause” is insufficient to prevent
liability from attaching to it. The “escape clause” in Progressive’s policy is located within
its definition of an “insured person”: “any person who is not insured for liability coverage
by any other insurance * * * with respect to an accident arising out of that person’s use of
a covered auto with the permission of you * * *.” (Emphasis sic.) 8
Case No. 2021-P-0001 {¶40} There is one significant difference from State Farm in this case since we
are left with two competing “excess” clauses. Because Mr. Smith is an insured under
both policies, they each cover the same risk, and they each provide that their liability with
regard to that risk shall be excess insurance over other valid, collectible insurance. In
addition, each policy has the same liability coverage limits.
{¶41} In Buckeye Union, supra, the Supreme Court of Ohio determined that
“[s]ince there can be no primary insurance of the risk where there are conflicting excess
clauses, the excess clauses a fortiori cannot be a valid means of establishing only
‘secondary’ liability.” Id. at 216. The Supreme Court went on to hold that “where two
insurance policies cover the same risk and both provide that their liability with regard to
that risk shall be excess insurance over other valid, collectible insurance, the two insurers
become liable in proportion to the amount of insurance provided by their respective
policies.” Id. at 218. See also Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 6th Dist.
Lucas No. L-10-1095, 2010-Ohio-5176, ¶ 28 (Although differently worded, under Buckeye
Union both excess insurance clauses are deemed inoperable, and liability coverage is
apportioned between the insurers in proportion to the amount of insurance provided by
their respective policies).
{¶42} Progressive cites to a collection of underinsured/uninsured motorist
(“UIM/UM”) cases in support of their argument and, without citing to any caselaw in
support, contends there is no difference between primary auto liability and UIM/UM
contract interpretations under the law. See Ashcraft v. Grange Mut. Cas. Co., 10th Dist.
Franklin No. 07AP-943, 2008-Ohio-1519; Mitchell v. Motorists Mut. Ins. Co., 10th Dist.
Franklin No. 04AP-589, 2005-Ohio-3988; Engler v. Stafford, 6th Dist. Lucas No. L-06-
1257, 2007-Ohio-2256; Lightning Rod Mut. Ins. Co. v. Grange Mut. Cas. Co., 168 Ohio 9
Case No. 2021-P-0001 App.3d 505, 2006-Ohio-4411, 860 N.E.2d 1049 (9th Dist.). We are not persuaded by this
argument since the determinative issue when assessing the validity of an insurance policy
exclusion in the context of UIM/UM coverage is the exclusion’s conformity with the statute
governing UIM/UM coverage, i.e., R.C. 3937.18. See, e.g., Shepherd v. Scott, 3d Dist.
Hancock No. 5-02-22, 2002-Ohio-4417, ¶ 17; Martin v. Midwestern Group Ins. Co., 70
Ohio St.3d 478, 480, 639 N.E.2d 438 (1994). Thus, in Shepherd, a converse case to the
circumstances presented here, the Third District declined to apply State Farm since it was
not “decided in the context of UM/UIM coverage.” Id. at ¶ 17.
{¶43} Finding Acuity’s assignment of error to have merit in part, we reverse the
judgment of the Portage County Court of Common Pleas granting summary judgment in
favor of Progressive and remand to the trial court to enter judgment based on the proration
method in accordance with this opinion.
THOMAS R. WRIGHT, P.J.,
CYNTHIA WESTCOTT RICE, J.,
concur.
Case No. 2021-P-0001