[Cite as Discover Property & Cas. Co. v. Progressive Cas., 2011-Ohio-3841.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 96125
DISCOVER PROPERTY & CASUALTY CO. PLAINTIFF-APPELLANT
vs.
PROGRESSIVE CASUALTY, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-618197
BEFORE: Blackmon, P.J., Rocco, J., and E. Gallagher, J.
RELEASED AND JOURNALIZED: August 4, 2011 ATTORNEY FOR APPELLANT Philip J. Weaver Smith Marshall, LLP 1425 Superior Building 815 Superior Avenue Cleveland, Ohio 44114-2703
ATTORNEYS FOR APPELLEES
For Progressive Casualty
Joseph R. Tira Michael R. Shanabruch 625 Alpha Drive, Box #011B Highland Heights, Ohio 44143
For Geico Casualty Company
Ian R. Luschin Williams, Moliterno & Scully Co., L.P.A. 2241 Pinnacle Parkway Twinsburg, Ohio 44087-2387
PATRICIA ANN BLACKMON, P.J.:
{¶ 1} Appellant Discover Property & Casualty Co. (“Discover”) appeals
the trial court’s granting of summary judgment in favor of appellees
Progressive Casualty (“Progressive”) and Geico Casualty Company (“Geico”)
and assigns the following error for our review: “I. Discover is entitled to summary judgment because
Ohio law does not distinguish between carrying property
for ‘a fee’ for ‘compensation’ or for ‘hire’ whether the
driver is paid wages, commissions, mileage, and/or tips, or
any combination thereof. Insurance policy exclusions
based upon those phrases are ambiguous and
unenforceable under any of those payment means. The
only exception to the rule is if an insured is paid a specific
sum for the specific purpose of making the specific
delivery, which is not the case here.”
{¶ 2} Having reviewed the record and pertinent law, we affirm the trial
court’s decision. The apposite facts follow.
Facts
{¶ 3} Discover, an insurance carrier for Papa Johns Pizza, filed suit
against Progressive and Geico insurance companies seeking recovery for
attorney fees and litigation expenses incurred in defending Papa Johns in two
different cases. In each case, Papa Johns’ drivers struck pedestrians while
delivering pizzas. Geico and Progressive were the personal automobile
insurance carriers for the drivers, who were using their own automobiles to
deliver the pizzas. {¶ 4} Progressive and Geico filed motions for summary judgment
arguing Discover was not entitled to recover the cost of defending the cases.
They argued their policies excluded coverage for the drivers and their
employers because the accidents occurred while the drivers were delivering
pizzas “for hire” and “for compensation or a fee.” Discover filed cross motions
for summary judgment arguing the exclusion language was ambiguous. The
trial court granted the summary judgment motions of Progressive and Geico,
agreeing that the exclusion language applied.
Motion for Summary Judgment Granted
{¶ 5} In its sole assigned error, Discover argues that the trial court
erred by granting summary judgment in favor of Progressive and Geico.
Specifically, Discover argues there was no evidence presented that the
language used in the exclusion clauses were ambiguous and because there
was no evidence the drivers were paid a “specific sum” for the sole purpose of
delivering pizza. The exclusions did not apply.
{¶ 6} We review an appeal from summary judgment under a de novo
standard of review. Baiko v. Mays (2000), 140 Ohio App.3d 1, 746 N.E.2d
618, citing Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 506
N.E.2d 212; N.E. Ohio Apt. Assn. v. Cuyahoga Cty. Bd. of Commrs. (1997),
121 Ohio App.3d 188, 699 N.E.2d 534. Accordingly, we afford no deference to
the trial court’s decision and independently review the record to determine whether summary judgment is appropriate. Under Civ.R. 56, summary
judgment is appropriate when: (1) no genuine issue as to any material fact
exists, (2) the party moving for summary judgment is entitled to judgment as
a matter of law, and (3) viewing the evidence most strongly in favor of the
non-moving party, reasonable minds can reach only one conclusion that is
adverse to the non-moving party. We conclude that Progressive and Geico
were entitled to judgment as a matter of law.
{¶ 7} Discover argues the exclusion clauses for transportation of food or
property in Progressive and Geico’s insurance polices were ambiguous and
unenforceable because Ohio case law requires that such policies only apply
when the driver is paid a “specific sum” for delivering the product. After
reviewing the relevant case law, we conclude that Discover has
misinterpreted the law.
{¶ 8} The interpretation of an insurance policy is a question of law
appropriate for summary judgment. If the insurance policy is clear and
unambiguous, it should be given its plain and ordinary meaning. Sarmiento
v. Grange Mut. Cas. Co., 106 Ohio St.3d 403, 2005-Ohio-5410, 835 N.E.2d
692, at ¶9, citing Gomolka v. State Auto Mut. Ins. Co. (1982), 70 Ohio St.2d
166, 167-168, 436 N.E.2d 1347. Ambiguous language contained in the policy
is construed against the insurance company. King v. Nationwide Ins. Co.
(1988), 35 Ohio St.3d 208, 519 N.E.2d 1380, syllabus. {¶ 9} The insurance policies in the instant case are unambiguous, and
the exclusions from coverage applies to the set of facts. There is no dispute
that the pizza delivery drivers were working within their scope of
employment because they were delivering pizzas when the accidents
occurred. The policy exclusion in the Geico policy clearly states that
coverage does not apply for injury or damage arising out the use of a vehicle
for carrying “passengers or goods for hire.” The policy exclusion in the
Progressive policy clearly states that coverage does not apply for injury or
damage arising out of the use of the vehicle for carrying persons or property
“for compensation or a fee.” Given that both drivers were paid to deliver
pizzas, the exclusions apply. The language used in exclusions was also broad
so as to not require a “specific sum” to be paid for each delivery. Payment in
any form triggers the exclusions.
{¶ 10} Relying on cases with distinguishable facts and different policy
language, Discover argues that the exclusionary phrases are ambiguous.
Discover’s reliance on the Ohio Supreme Court’s decision in U.S. Fidelity &
Guaranty Co. v. Lightening Rod Mut. Ins. Co., 89 Ohio St.3d 584,
1997-Ohio-311, 687 N.E.2d 717, is misplaced. In that case, the pizza delivery
driver was paid on an hourly basis and reimbursed for mileage for his
deliveries. The Ohio Supreme Court found that the policy language that
excluded coverage for cars used to make deliveries “for a fee” was subject to two interpretations, and thus ambiguous. The language could be interpreted
to exclude coverage for using the car to transport property when there is any
kind of payment, or it could be interpreted to exclude coverage only when a
fee is paid specifically for the act of transporting property. The court
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[Cite as Discover Property & Cas. Co. v. Progressive Cas., 2011-Ohio-3841.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 96125
DISCOVER PROPERTY & CASUALTY CO. PLAINTIFF-APPELLANT
vs.
PROGRESSIVE CASUALTY, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-618197
BEFORE: Blackmon, P.J., Rocco, J., and E. Gallagher, J.
RELEASED AND JOURNALIZED: August 4, 2011 ATTORNEY FOR APPELLANT Philip J. Weaver Smith Marshall, LLP 1425 Superior Building 815 Superior Avenue Cleveland, Ohio 44114-2703
ATTORNEYS FOR APPELLEES
For Progressive Casualty
Joseph R. Tira Michael R. Shanabruch 625 Alpha Drive, Box #011B Highland Heights, Ohio 44143
For Geico Casualty Company
Ian R. Luschin Williams, Moliterno & Scully Co., L.P.A. 2241 Pinnacle Parkway Twinsburg, Ohio 44087-2387
PATRICIA ANN BLACKMON, P.J.:
{¶ 1} Appellant Discover Property & Casualty Co. (“Discover”) appeals
the trial court’s granting of summary judgment in favor of appellees
Progressive Casualty (“Progressive”) and Geico Casualty Company (“Geico”)
and assigns the following error for our review: “I. Discover is entitled to summary judgment because
Ohio law does not distinguish between carrying property
for ‘a fee’ for ‘compensation’ or for ‘hire’ whether the
driver is paid wages, commissions, mileage, and/or tips, or
any combination thereof. Insurance policy exclusions
based upon those phrases are ambiguous and
unenforceable under any of those payment means. The
only exception to the rule is if an insured is paid a specific
sum for the specific purpose of making the specific
delivery, which is not the case here.”
{¶ 2} Having reviewed the record and pertinent law, we affirm the trial
court’s decision. The apposite facts follow.
Facts
{¶ 3} Discover, an insurance carrier for Papa Johns Pizza, filed suit
against Progressive and Geico insurance companies seeking recovery for
attorney fees and litigation expenses incurred in defending Papa Johns in two
different cases. In each case, Papa Johns’ drivers struck pedestrians while
delivering pizzas. Geico and Progressive were the personal automobile
insurance carriers for the drivers, who were using their own automobiles to
deliver the pizzas. {¶ 4} Progressive and Geico filed motions for summary judgment
arguing Discover was not entitled to recover the cost of defending the cases.
They argued their policies excluded coverage for the drivers and their
employers because the accidents occurred while the drivers were delivering
pizzas “for hire” and “for compensation or a fee.” Discover filed cross motions
for summary judgment arguing the exclusion language was ambiguous. The
trial court granted the summary judgment motions of Progressive and Geico,
agreeing that the exclusion language applied.
Motion for Summary Judgment Granted
{¶ 5} In its sole assigned error, Discover argues that the trial court
erred by granting summary judgment in favor of Progressive and Geico.
Specifically, Discover argues there was no evidence presented that the
language used in the exclusion clauses were ambiguous and because there
was no evidence the drivers were paid a “specific sum” for the sole purpose of
delivering pizza. The exclusions did not apply.
{¶ 6} We review an appeal from summary judgment under a de novo
standard of review. Baiko v. Mays (2000), 140 Ohio App.3d 1, 746 N.E.2d
618, citing Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 506
N.E.2d 212; N.E. Ohio Apt. Assn. v. Cuyahoga Cty. Bd. of Commrs. (1997),
121 Ohio App.3d 188, 699 N.E.2d 534. Accordingly, we afford no deference to
the trial court’s decision and independently review the record to determine whether summary judgment is appropriate. Under Civ.R. 56, summary
judgment is appropriate when: (1) no genuine issue as to any material fact
exists, (2) the party moving for summary judgment is entitled to judgment as
a matter of law, and (3) viewing the evidence most strongly in favor of the
non-moving party, reasonable minds can reach only one conclusion that is
adverse to the non-moving party. We conclude that Progressive and Geico
were entitled to judgment as a matter of law.
{¶ 7} Discover argues the exclusion clauses for transportation of food or
property in Progressive and Geico’s insurance polices were ambiguous and
unenforceable because Ohio case law requires that such policies only apply
when the driver is paid a “specific sum” for delivering the product. After
reviewing the relevant case law, we conclude that Discover has
misinterpreted the law.
{¶ 8} The interpretation of an insurance policy is a question of law
appropriate for summary judgment. If the insurance policy is clear and
unambiguous, it should be given its plain and ordinary meaning. Sarmiento
v. Grange Mut. Cas. Co., 106 Ohio St.3d 403, 2005-Ohio-5410, 835 N.E.2d
692, at ¶9, citing Gomolka v. State Auto Mut. Ins. Co. (1982), 70 Ohio St.2d
166, 167-168, 436 N.E.2d 1347. Ambiguous language contained in the policy
is construed against the insurance company. King v. Nationwide Ins. Co.
(1988), 35 Ohio St.3d 208, 519 N.E.2d 1380, syllabus. {¶ 9} The insurance policies in the instant case are unambiguous, and
the exclusions from coverage applies to the set of facts. There is no dispute
that the pizza delivery drivers were working within their scope of
employment because they were delivering pizzas when the accidents
occurred. The policy exclusion in the Geico policy clearly states that
coverage does not apply for injury or damage arising out the use of a vehicle
for carrying “passengers or goods for hire.” The policy exclusion in the
Progressive policy clearly states that coverage does not apply for injury or
damage arising out of the use of the vehicle for carrying persons or property
“for compensation or a fee.” Given that both drivers were paid to deliver
pizzas, the exclusions apply. The language used in exclusions was also broad
so as to not require a “specific sum” to be paid for each delivery. Payment in
any form triggers the exclusions.
{¶ 10} Relying on cases with distinguishable facts and different policy
language, Discover argues that the exclusionary phrases are ambiguous.
Discover’s reliance on the Ohio Supreme Court’s decision in U.S. Fidelity &
Guaranty Co. v. Lightening Rod Mut. Ins. Co., 89 Ohio St.3d 584,
1997-Ohio-311, 687 N.E.2d 717, is misplaced. In that case, the pizza delivery
driver was paid on an hourly basis and reimbursed for mileage for his
deliveries. The Ohio Supreme Court found that the policy language that
excluded coverage for cars used to make deliveries “for a fee” was subject to two interpretations, and thus ambiguous. The language could be interpreted
to exclude coverage for using the car to transport property when there is any
kind of payment, or it could be interpreted to exclude coverage only when a
fee is paid specifically for the act of transporting property. The court
determined that because the language of the contract was ambiguous, it had
to be construed against the insurer; thus, the exclusion did not apply.
{¶ 11} Discover relies on U.S. Fidelity to argue that the policy language
in the Progressive and Geico policies are likewise ambiguous. We disagree.
The language in the Progressive policy includes the term “compensation” in
the exclusion, and the Geico policy includes the term “for hire” in the
exclusion. These added terms resolve the ambiguity that existed in the U.S.
Fidelity case. In U.S. Fidelity, the court found the exclusion ambiguous
because it was unclear whether the intended definition included
“compensation” in any form or when a separate fee is charged exclusively for
the delivery. Here, the terms “compensation” and “for hire” indicate the
exclusions apply to payment to drivers in any form for the deliveries, not just
a specific sum.
{¶ 12} Likewise, Discover’s reliance on the cases from other districts are
distinguishable from the instant case because in those cases, like in U.S.
Fidelity, the insurance companies used the narrow language “for a fee” in
the exclusion clause. See Progressive Ins. Co. v. Heritage Ins. Co. (1996), 113 Ohio App.3d 781, 682 N.E.2d 33; Nationwide Ins. Co. v. Johnson (1992), 84
Ohio App.3d 106, 616 N.E.2d 525; Nationwide Ins. Co. v. Thorley (Jan. 16,
1991), 9th Dist. No. 14658; Colonial Ins. Co. of Cal. v. Jermann (1995), 102
Ohio App.3d 384, 657 N.E.2d 336 (policy used the narrow language, “for a
charge” which was as susceptible of varying interpretation as “for a fee”). In
the instant case, the added words, “for compensation” and “for hire” allow a
broader interpretation that any compensation in any form is sufficient for the
exclusion to apply.
{¶ 13} Discover also relies upon a case from the Seventh District,
Progressive Max. Ins. Co. v. Matta, 7th Dist. No. 07 MA 30, 2008-Ohio-1112,
in which the policy language was identical to the Progressive policy in the
instant case. In Matta, the policy language excluded coverage for delivery of
property or food “for compensation or a fee.” The Seventh District, relying on
the Supreme Court case of U.S. Fidelity, concluded the language was
ambiguous. The Matta case is not binding on our court; thus, we are free to
disagree with the holding, which we do. The Matta court focused on the
words “for a fee” and found the preceding clause “for compensation” did not
clarify the meaning. However, we believe the added phrase “for
compensation” distinguishes the policy from the U.S. Fidelity case in which
the exclusionary clause only stated, “for a fee.” See Progressive Cas. Ins. Co.
v. Chalfant (N.D. Ind., 2010), Case No. 109-CV-5. As we previously discussed, the added verbiage, “for compensation” indicates that
compensation in any form applies, resolving the ambiguity that exists when
only the phrase “for a fee” is used.
{¶ 14} Discover’s argument that no evidence was presented that the
drivers received any compensation in any form ignores the fact that it is
undisputed the drivers were employed by the pizza companies. There is no
evidence the drivers were voluntarily delivering the pizzas. Thus, to argue
they were possibly paid nothing is not reasonable. Accordingly, Discover’s sole
assigned error is overruled.
Judgment affirmed.
It is ordered that appellees recover from appellant their costs herein
taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court 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.
PATRICIA ANN BLACKMON, PRESIDING JUDGE
KENNETH A. ROCCO, J., and EILEEN A. GALLAGHER, J., CONCUR