Artisan & Truckers Cas. Co. v. United Ohio Ins. Co.

2019 Ohio 3, 127 N.E.3d 333

• Court: Ohio Court of Appeals
• Decided: December 28, 2018
• Docket: 18CA3639
• Status: Published

Opinion

[Cite as Artisan & Truckers Cas. Co. v. United Ohio Ins. Co., 2019-Ohio-3.]

IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT ROSS COUNTY

ARTISAN & TRUCKERS CASUALTY CO. :

Plaintiff-Appellee, : Case No. 18CA3639

v. : DECISION AND UNITED OHIO INSURANCE CO. : JUDGMENT ENTRY

Defendant-Appellant. :

APPEARANCES:

Josh L. Schoenberger and Susan S. R. Petro, Williams & Schoenberger Co. LLC, Columbus, Ohio, for appellant.

Richard M. Garner and Jeffery S. Maynard, Collins, Roche, Utley & Garner, Dublin, Ohio, for appellee.

Hoover, P.J.

{¶1} Defendant-appellant, United Ohio Insurance Company (“United”) appeals the

judgment of the Ross County Court of Common Pleas, which granted declaratory judgment in

favor of plaintiff-appellee, Artisan and Truckers Casualty Company (“Progressive”). In this case,

Progressive sought a declaratory judgment that its insurance policy was in excess of United’s

policy in the matter of Sabrina Stiffler, Administratrix of the Estate of Christopher Stiffler,

Deceased, et al. v. Stevens Enterprises of Ohio, LLC, et al., Jackson County, Ohio Court of

Common Pleas, Case Number 15 PI 0014 (“Underlying Litigation”). There, United and

Progressive agreed to split the $1,350,000.00 indemnity payment—with each paying

$675,000.00—but reserved the right to seek contribution from each other for amounts paid in

excess of their respective policies. The trial court ultimately found that United’s policy provided Ross App. No. 18CA3639 2

primary coverage for the liability claims while Progressive’s policy provided excess coverage.

Since both policies had a limit of $1 million, United was responsible for $1 million of the

$1,350,000.00; and Progressive was responsible for the remainder. Therefore, the trial court

ordered United to reimburse Progressive the amount of $325,000.00 plus statutory interest at a

rate of 3% per annum beginning September 28, 2016.

{¶2} On appeal, United contends that its policy and Progressive’s policy provided pro-

rata coverage with respect to the Underlying Litigation and that both parties were responsible for

a proportionate share of the indemnity payment. According to United, the trial court improperly

construed Progressive’s policy instead of applying the language as written. Progressive argues

that the trial court’s ruling was consistent with the intent of the parties to the Progressive policy

and consistent with common industry practice.

{¶3} For the reasons that follow, we find that Progressive’s policy provided excess

coverage in the Underlying Litigation. Accordingly, we affirm the judgment of the trial court.

I. Facts and Procedural History

{¶4} Both parties have agreed to the following stipulated facts:

1. [Progressive] is licensed and authorized to offer and sell insurance in the

State of Ohio.

2. [United] is licensed and authorized to offer and sell insurance in the State

of Ohio.

3. August 15, 2014, Progressive issued Policy No. 03241868-0 to David D.

Stevens/Stevens Enterprises (“Stevens”), effective for the policy period of August

15, 2014 to August 15, 2015 (“Progressive Policy”). * * * Ross App. No. 18CA3639 3

4. Pursuant to the Progressive Policy, a 1999 International 900 Tractor, VIN

2HSFTASR8XC041697 (“Tractor”)1 and a 1986 Strick Trailer, VIN

1512E9483GE278283 (“Trailer”) were included on the Auto Coverage Schedule

of the Progressive Policy.

5. The next day, August 16, 2014, United issued Policy No. CPP 0017890 to

Stevens, effective for the policy period of August 16, 2014 to August 16, 2015

(“United Policy”). * * *

6. Pursuant to the United Policy, the Tractor was included on the Schedule of

Covered Autos of the United Policy.2 The Trailer was not included on the United

Policy’s Schedule of Covered Autos.

7. At all times pertinent to this case, the Tractor and Trailer were owned by

[Stevens].

8. On November 11, 2014, the Tractor and Trailer, while being driven by

James Ostrander (“Ostrander”) in the course and scope of his employment for

Stevens, was involved in an automobile accident that allegedly caused the death

of Christopher Stiffler (“Stiffler”) in Ross County, Ohio (“Accident”).

9. Stiffler’s legal representative filed Sabrina Stiffler, Administratrix of the

Estate of Christopher Stiffler, Deceased, et al. v. Stevens Enterprises of Ohio,

LLC, et al., No. 15 PI 0014, in the Court of Common Pleas for Jackson County,

Ohio against Stevens and Ostrander seeking damages arising from the Accident

(“Underlying Litigation”).

1 The Progressive Policy refers to this vehicle as a “1999 Intl 990,” and (OP 8, Exhibit A at 3). 2 The United Policy refers to this vehicle as a “1999 International 9900 Tractor.” (OP 8, Exhibit B at 4). Ross App. No. 18CA3639 4

10. Stevens and Ostrander sought coverage under both the Progressive Policy

and the United Policy for the claims asserted against each of them in the

Underlying Litigation.

11. The claims against Stevens and Ostrander in the Underlying Litigation

were resolved through a confidential settlement agreement * * * (“Settlement

Agreement”).

12. Pursuant to the Settlement Agreement, Progressive and United each paid

$675,000 to settle the claims against Stevens and Ostrander in the Underlying

Litigation—for a total of $1,350,000.00. However, Progressive and United

reserved the right to seek contribution from each other for any amounts either

paid that were believed to be in excess of what their respective policies required.

(Joint Stipulation of Facts).

{¶5} On November 4, 2016, Progressive filed a Complaint for Declaratory Judgment in

the Ross County Court of Common Pleas, which asked the court to: (1) declare that the

Progressive Policy was in excess to the United Policy relative to coverage for claims for

indemnity with respect to the Underlying Litigation; and (2) award Progressive damages in the

amount of $325,000 plus interest from the date of settlement. (OP 1). In support of its argument,

Progressive attached a copy of the Progressive Policy, which includes an “Automatic

Termination” provision and an “Other Insurance” provision.

{¶6} The Automatic Termination provision states:

If you obtain other insurance on an insured auto, any similar insurance provided

by this policy will terminate as to that insured auto on the effective date of the

other insurance. Ross App. No. 18CA3639 5

(Emphasis sic.) (OP 8, Exhibit A at 26).

{¶7} Additionally, the Other Insurance provision provides:

For any insured auto that is specifically described on the declarations page, this

policy provides primary coverage. For an insured auto which is not specifically

described on the declarations page, coverage under this policy will be in excess

over any and all other valid and collectible insurance, whether primary, excess or

contingent. However, if the insured auto which is specifically described on the

declarations page is a trailer, this policy will be primary only if the trailer is

attached to an insured auto that is a power unit you own and is specifically

described on the declarations page, and excess in all other circumstances.

(Emphasis sic.) (Id. at 24).

{¶8} The Progressive Policy also contains a General Definitions provision, which

states in relevant part:

4. “Declarations” or “declarations page” means the document prepared by us

listing your policy information, which may include the types of coverage you

have elected, the limit for each coverage, the cost for each coverage, the

specifically described autos covered by this policy, and the types of coverage for

each specifically described auto.

5. “Insured auto” or “your insured auto” means:

a. Any auto specifically described on the declarations page * * *.

***

15. “Trailer” includes a semi-trailer and any piece of equipment used to

convert a semi-trailer to a full trailer while it is attached to the semi-trailer. Ross App. No. 18CA3639 6

17. “You” * * * refer[s] to the named insured shown on the declarations page.

(Emphasis deleted.) (Id. at 14-16).

{¶9} Ultimately, the trial court found that the United Policy provided primary coverage

for the liability claims while the Progressive Policy provided excess coverage. Since both

policies had a liability limit of $1 million, United was responsible for $1 million of the

$1,350,000.00 indemnity payment in the Underlying Litigation; and Progressive was responsible

for the remainder. (OP 8, Exhibit A at 2 & Exhibit B at 3). Therefore, the trial court granted

declaratory judgment in favor of Progressive and ordered United to reimburse Progressive the

amount of $325,000.00 plus statutory interest at a rate of 3% per annum beginning September

28, 2016, the date of the settlement.

{¶10} United timely appealed.

II. Assignments of Error

{¶11} On appeal, United assigns the following errors for our review:

First Assignment of Error:

The trial court erred in holding that the Progressive Policy provides excess

liability coverage for the Underlying Litigation.

Second Assignment of Error:

The trial court erred in construing the Progressive Policy’s language rather than

applying it as written.

Third Assignment of Error:

The trial court erred in holding that United is required to pay $325,000.00 in

contribution plus interest to Progressive. Ross App. No. 18CA3639 7

III. Law and Analysis

A. Standard of Review

{¶12} “[T]he interpretation of an insurance contract is a matter of law, which we review

de novo.” Comisford v. Erie Property Cas. Co., 4th Dist. Gallia No. 10CA3, 2011-Ohio-1373,

quoting Siegfried v. Farmers Ins. of Columbus, Inc., 187 Ohio App. 3d 710, 933 N.E.2d 815,

2010-Ohio-1173, at ¶ 11, citing Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio

St.3d 107, 108, 652 N.E.2d 684, 1995-Ohio-214. “In interpreting an insurance policy, the court’s

role is to give effect to the intent of the parties to the agreement. In doing so, [w]e examine the

insurance contract as a whole and presume that the intent of the parties is reflected in the

language used in the policy. We look to the plain and ordinary meaning of the language used in

the policy unless another meaning is clearly apparent from the contents of the policy. When the

language of a written contract is clear, a court may look no further than the writing itself to find

the intent of the parties.” Eastley v. Volkman, Scioto App. Nos. 09CA3308 & 09CA3309, 2010-

Ohio-4771, at ¶ 50, citing Westfield Ins. Co. v. Galatis, 100 Ohio St. 3d 216, 2003-Ohio-5849,

797 N.E.2d 1256, at ¶ 11 (internal quotations omitted) (alteration sic).

B. The Progressive Policy Provided Excess Coverage in the Underlying Litigation

{¶13} We address United’s first and second assignments of error in tandem.

{¶14} In its first assignment of error, United alleges that the trial court erred in finding

that the United Policy provided primary liability coverage while the Progressive Policy provided

excess coverage for the Underlying Litigation. According to United, both parties were

responsible for a proportionate share of the indemnity payment because the United Policy and

the Progressive Policy provided pro-rata coverage. Ross App. No. 18CA3639 8

{¶15} In its second assignment of error, United alleges that the trial court improperly

construed the language of the Progressive Policy rather than applying it as written. Based on the

clear and unambiguous language of the Progressive Policy’s Other Insurance provision, United

argues that the Progressive Policy provided primary coverage for the Trailer. Once again, the

Other Insurance provision states that:

[I]f the insured auto which is specifically described on the declarations page is

a trailer, this policy will be primary only if the trailer is attached to an insured

auto that is a power unit you own and is specifically described on the

declarations page, and excess in all other circumstances.

(Emphasis sic.) (OP 8, Exhibit A at 22). Since the phrase “insured auto,” as used in the

Progressive Policy, is defined as “[a]ny auto specifically described on the declarations page,”

United argues that the Progressive Policy provided primary coverage for the Trailer since the

Tractor remained listed on the policy’s declarations page. (Id. at 3 & 14). However, United

concedes that the August 16, 2014 issuance of the United Policy covering the Tractor terminated

Progressive’s coverage of the Tractor under Progressive’s Automatic Termination provision.

(Appellant’s Brief at 7).

{¶16} In contrast, Progressive believes that the trial court properly applied the

Progressive Policy in a way that was consistent with the language of the policy and the intent of

the parties. According to Progressive, the purpose of the Other Insurance provision was to render

trailer coverage in excess unless the power unit pulling the trailer was an auto owned by the

policyholder and insured only by Progressive. This is consistent with other provisions of the

Progressive Policy, which provide that “[a]n insured auto and any trailer or trailers attached

thereto shall be deemed to be one auto with respect to our Limit of Liability.” (Emphasis Ross App. No. 18CA3639 9

deleted.) (OP 8, Exhibit A at 20). Progressive agrees that United’s Policy, which it issued on

August 16, 2014 and which covered the Tractor, terminated Progressive’s coverage of the

Tractor under Progressive’s Automatic Termination provision. Since the Progressive Policy no

longer covered the Tractor at the time of the Accident, Progressive alleges that coverage for the

Trailer was rendered excess.

{¶17} Insurance policies cannot be read in an overly circumscribed fashion. Gomolka v.

State Auto. Mut. Ins. Co., 70 Ohio St.32 166, 172, 436 N.E.2d 1347 (1982). “One may not regard

only the right hand which giveth, if the left hand also taketh away. The intention of the parties

must be derived instead from the instrument as a whole, and not from detached or isolated parts

thereof.” Id., citing Stickel v. Excess Ins. Co. of Am., 136 Ohio St. 49, 53, 23 N.E.2d 839 (1939),

and Germania Fire Ins. Co. v. Schild, 69 Ohio St. 136, x, 68 N.E. 706 (1903). “Since courts must

examine the insurance policy as a whole to determine the parties’ intentions, it follows that

courts must also examine the policy as a whole when determining whether a word or phrase of

the policy is ambiguous.” Sauer v. Crews, 140 Ohio St. 3d 314, 2014-Ohio-3655, 18N.E.3d 410,

¶ 14. Further, “[a] policy should not be read so as to extend coverage to absurd lengths or to be

inconsistent with logic or the law.” Ryan v. Hartford Co., 12th Dist. Butler No. CA2000-10-210,

2001 Ohio App, LEXIS 2772, at *12 (June 25, 2001), citing Lovewell v. Physicians Ins. Co. of

Ohio, 79 Ohio St. 3d 143, 148, 679 N.E.2d 1119 (1997), and West v. McNamara, 159 Ohio St.

187, 197, 111 N.E.2d 909 (1953).

{¶18} We recognize that the phrase “insured auto” as used in the Progressive Policy is

defined as “[a]ny auto specifically described on the declarations page.” (OP 8, Exhibit A at 14);

and if we were read the Other Insurance provision in isolation, it would appear that the Tractor

remained an “insured auto” because it was still listed on the declarations page at the time of the Ross App. No. 18CA3639 10

Accident. However, we find that this interpretation produces an absurd result. See United Ohio

Ins. Co. v. Calvalege, 3d Dist. Allen No. 1-93-36, 1993 Ohio App. LEXIS 6148, at *8 (Dec. 13,

1993) (“Although the language in the policy may be clear and unambiguous, it must nevertheless

be considered in light of the fact that it is part of a policy of insurance.”). “The meaning of a

contract is to be gathered from a consideration of all its parts, and no provision is to be wholly

disregarded as inconsistent with other provisions unless no other reasonable construction is

possible.” German Fire Ins. Co. v Roost, 55 Ohio St. 581, 45 N.E. 1097 (1897), paragraph one of

the syllabus. When the disputed language is considered as part of the insurance contract as a

whole, especially in light of the Automatic Termination provision, it is clear that the meaning

United urges cannot be correct.

{¶19} The purpose of the Other Insurance provision was to provide primary trailer

coverage only in circumstances where the power unit pulling the trailer was an auto owned by

the policyholder and insured by Progressive. Although the Tractor remained on the Progressive

Policy’s declarations page, both parties agree that the issuance of the United Policy on August

16, 2014 terminated Progressive’s coverage of the Tractor under Progressive’s Automatic

Termination provision. (OP 8, Exhibit A at 3; Appellant’s Brief at 7). Since the Trailer’s power

unit was no longer insured by Progressive, it logically follows from the language and intent of

the Progressive Policy that the trailer coverage was rendered in excess. See Calvalege at *9.

Therefore, we find that the United Policy provided primary liability coverage while the

Progressive Policy provided excess coverage for the Underlying Litigation.

{¶20} Accordingly, we overrule United’s first and second assignments of error.

C. Progressive Is Entitled to Reimbursement from United in the Amount of $325,000 Plus

Statutory Interest Ross App. No. 18CA3639 11

{¶21} In its third assignment of error, United alleges that the trial court erred in holding

that United is required to pay $325,000.00 in contribution plus interest to Progressive. According

to United, the trial court should have found that United and Progressive’s policies were co-

primary and provided pro-rata coverage with respect to the Underlying Litigation. Therefore,

United argues that the parties properly split the $1,350,000.00 indemnity payment, with each

paying $675,000.00.

{¶22} However, we found that Progressive’s coverage was in excess, not co-primary.

Since both policies had a limit of $1 million, we find that United was responsible for $1 million

of the $1,350,000.00 indemnity payment; and Progressive was responsible for the remaining

$350,000.00. (OP 8, Exhibit A at 2 & Exhibit B at 3). Since Progressive paid in excess of

$350,000.00, it is entitled to reimbursement by United. Therefore, we affirm the damages award

in the amount of $325,000.00 plus statutory interest at a rate of 3% per annum beginning

September 28, 2016, the date of the Settlement Agreement.

{¶23} Accordingly, we overrule United’s third assignment of error.

IV. Conclusion

{¶24} Having overruled all three of United’s assignments of error, we therefore affirm

the judgment of the trial court.

JUDGMENT AFFIRMED. Ross App. No. 18CA3639 12

JUDGMENT ENTRY

It is ordered that the JUDGMENT IS AFFIRMED. Appellant shall pay the costs.

The Court finds that reasonable grounds existed for this appeal.

It is ordered that a special mandate issue out of this Court directing the Ross County Court of Common Pleas to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.

Harsha, J.: Abele, J.:

For the Court,

By: ________________________________ Marie Hoover Presiding Judge

NOTICE TO COUNSEL

Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.