[Cite as United Ohio Ins. Co. v. Schaeffer, 2014-Ohio-3854.]
IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT ERIE COUNTY
United Ohio Insurance Company Court of Appeals No. E-13-037
Appellant Trial Court No. 2012-CV-0426
v.
Donald R. Schaeffer, et al. DECISION AND JUDGMENT
Appellee Decided: September 5, 2014
*****
Ronald A. Rispo, for appellant.
Gary E. Miesle, for appellee Donald R. Schaeffer.
PIETRYKOWSKI, J.
{¶ 1} Appellant, United Ohio Insurance Company (“United”), appeals the July 10,
2013 judgment of the Erie County Court of Common Pleas which granted appellee
Donald R. Schaeffer’s motion for summary judgment, denied appellant’s motion for
summary judgment, and declared that United had a duty to defend and indemnify its insured for damages arising from the October 22, 2011 accident involving appellee’s
tractor. Because we find that the policy excluded coverage, we reverse.
{¶ 2} This declaratory judgment action commenced on June 7, 2012, with
United’s request that the court declare its rights and duties under its insurance policies
with appellee. The request for declaratory judgment stemmed from an incident on
October 22, 2011, when a tractor pulling three trailers full of people overturned and 28
were injured. The tractor at issue, a Case International MX190, was owned by appellee
who loaned it to the Mason Jar for a hayride or “bar crawl” event. Appellee had loaned
them a tractor for the event on multiple prior occasions. Mason Jar employee Mike
Hermes operated the tractor. The complaint named appellee, Schaeffer, as well as the
plaintiffs in the underlying personal injury lawsuits, which named Schaeffer as a
defendant.
{¶ 3} On February 6, 2013, United filed its motion for summary judgment. In its
motion, it first argued that there was no coverage for the tractor under the personal
automobile liability policy as it was not a “covered auto.” Next, under the primary farm
owner’s policy, United argued that the policy did not provide liability coverage for the
entrustment of the vehicle by an insured. Further, the policy excluded coverage for
motorized vehicles used for recreational purposes while away from the insured premises.
Finally, because no provision of the policy covered the claim, the excess policy provided
no coverage.
2. {¶ 4} Appellee filed his response in opposition and cross-motion for summary
judgment on March 15, 2013. Appellee argued that the tractor at issue was a motor
vehicle as defined under the policy; it was equipped with various lights and signals for
use on public roads and Schaeffer had, in fact, driven it on area roads on multiple
occasions. Appellee further argued that because the tractor is a “motor vehicle” the
exclusions which apply to “motorized vehicles” were not applicable. Appellee stressed
that if the court found any of the policy language ambiguous, it should construe it in
favor of coverage. Regarding the excess policy, appellee stated that if coverage was
found under the primary policy, it must be found under the excess/catastrophic policy.
{¶ 5} On July 10, 2013, the trial court granted appellee’s motion for summary
judgment and denied appellant’s motion for summary judgment. The court agreed that
the claim was not covered under the auto policy. As to the farm policy, the court
concluded that the tractor was a motorized vehicle. The court then determined that
because the tractor “could” be used as a recreational vehicle, the recreational motor
vehicle liability endorsement provided coverage. The court further concluded that
because the farm policy provided coverage, the excess policy did as well. Finally, the
court declared that appellant had a duty to defend and indemnify appellee for bodily
injuries and damages arising from the October 22, 2011 operation and use of his tractor.
This appeal followed.
3. {¶ 6} Appellant now raises two assignments of error for our review:
Assignment of Error #1
The trial court erred prejudicially to the appellant when it granted
summary judgment to Don Schaeffer and denied summary judgment to the
appellant Ohio Mutual Insurance Co., thereby requiring Ohio Mutual to
defend and indemnify Don Schaeffer in the underlying litigation under the
liability coverage for Recreational Vehicles and the excess/umbrella policy
as well.
Assignment of Error #2
The trial court erred prejudicially to the appellant when it found that
the excess/umbrella policy also provided coverage for the same reasons as
the primary Farm Owners policy.
{¶ 7} We first note that in reviewing a ruling on a motion for summary judgment,
this court must apply the same standard as the trial court. Lorain Natl. Bank v. Saratoga
Apts., 61 Ohio App.3d 127, 129, 572 N.E.2d 198 (9th Dist.1989). Summary judgment
will be granted when there remains no genuine issue as to any material fact and, when
construing the evidence most strongly in favor of the nonmoving party, reasonable minds
can only conclude that the moving party is entitled to judgment as a matter of law.
Civ.R. 56(C). Further, we review de novo all the evidence and arguments presented in
appellant’s motion for summary judgment and appellee’s opposition.
4. {¶ 8} At issue is whether the insurance policy provided coverage for the tractor at
the time of the incident. “In Ohio, insurance contracts are construed as any other written
contract.” Andray v. Elling, 6th Dist. Lucas No. L-04-1150, 2005-Ohio-1026, ¶ 18,
citing Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 597
N.E.2d 1096 (1992). If the language of the policy is clear and unambiguous, there are no
issues of fact and interpretation is a matter of law. Inland Refuse Transfer Co. v.
Browning-Ferris Industries of Ohio, Inc., 15 Ohio St.3d 321, 322, 474 N.E.2d 271
(1984), citing Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146
(1978). Conversely, policies that are “reasonably susceptible of more than one
interpretation * * * will be construed strictly against the insurer and liberally in favor of
the insured.” Lane v. Grange Mut. Cos., 45 Ohio St.3d 63, 65, 543 N.E.2d 488 (1989).
Whether a policy is clear and unambiguous or requires interpretation is therefore a proper
issue for summary judgment.
{¶ 9} In appellant’s first assignment of error it contends that the trial court erred
when it found an ambiguity in the policy’s definition of a recreational vehicle. The
recreational vehicle endorsement in the policy provides, in part:
Personal Liability or Farm Personal Liability is extended to apply to
damages for bodily injury or property damage for which an insured
becomes legally responsible and Medical Payments to Others because of an
accident arising out of:
5. A. the ownership, operation, maintenance, use, loading, or unloading
of a recreational motor vehicle;
B. the entrustment by an insured of a recreational motor vehicle to
any person; * * *.
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[Cite as United Ohio Ins. Co. v. Schaeffer, 2014-Ohio-3854.]
IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT ERIE COUNTY
United Ohio Insurance Company Court of Appeals No. E-13-037
Appellant Trial Court No. 2012-CV-0426
v.
Donald R. Schaeffer, et al. DECISION AND JUDGMENT
Appellee Decided: September 5, 2014
*****
Ronald A. Rispo, for appellant.
Gary E. Miesle, for appellee Donald R. Schaeffer.
PIETRYKOWSKI, J.
{¶ 1} Appellant, United Ohio Insurance Company (“United”), appeals the July 10,
2013 judgment of the Erie County Court of Common Pleas which granted appellee
Donald R. Schaeffer’s motion for summary judgment, denied appellant’s motion for
summary judgment, and declared that United had a duty to defend and indemnify its insured for damages arising from the October 22, 2011 accident involving appellee’s
tractor. Because we find that the policy excluded coverage, we reverse.
{¶ 2} This declaratory judgment action commenced on June 7, 2012, with
United’s request that the court declare its rights and duties under its insurance policies
with appellee. The request for declaratory judgment stemmed from an incident on
October 22, 2011, when a tractor pulling three trailers full of people overturned and 28
were injured. The tractor at issue, a Case International MX190, was owned by appellee
who loaned it to the Mason Jar for a hayride or “bar crawl” event. Appellee had loaned
them a tractor for the event on multiple prior occasions. Mason Jar employee Mike
Hermes operated the tractor. The complaint named appellee, Schaeffer, as well as the
plaintiffs in the underlying personal injury lawsuits, which named Schaeffer as a
defendant.
{¶ 3} On February 6, 2013, United filed its motion for summary judgment. In its
motion, it first argued that there was no coverage for the tractor under the personal
automobile liability policy as it was not a “covered auto.” Next, under the primary farm
owner’s policy, United argued that the policy did not provide liability coverage for the
entrustment of the vehicle by an insured. Further, the policy excluded coverage for
motorized vehicles used for recreational purposes while away from the insured premises.
Finally, because no provision of the policy covered the claim, the excess policy provided
no coverage.
2. {¶ 4} Appellee filed his response in opposition and cross-motion for summary
judgment on March 15, 2013. Appellee argued that the tractor at issue was a motor
vehicle as defined under the policy; it was equipped with various lights and signals for
use on public roads and Schaeffer had, in fact, driven it on area roads on multiple
occasions. Appellee further argued that because the tractor is a “motor vehicle” the
exclusions which apply to “motorized vehicles” were not applicable. Appellee stressed
that if the court found any of the policy language ambiguous, it should construe it in
favor of coverage. Regarding the excess policy, appellee stated that if coverage was
found under the primary policy, it must be found under the excess/catastrophic policy.
{¶ 5} On July 10, 2013, the trial court granted appellee’s motion for summary
judgment and denied appellant’s motion for summary judgment. The court agreed that
the claim was not covered under the auto policy. As to the farm policy, the court
concluded that the tractor was a motorized vehicle. The court then determined that
because the tractor “could” be used as a recreational vehicle, the recreational motor
vehicle liability endorsement provided coverage. The court further concluded that
because the farm policy provided coverage, the excess policy did as well. Finally, the
court declared that appellant had a duty to defend and indemnify appellee for bodily
injuries and damages arising from the October 22, 2011 operation and use of his tractor.
This appeal followed.
3. {¶ 6} Appellant now raises two assignments of error for our review:
Assignment of Error #1
The trial court erred prejudicially to the appellant when it granted
summary judgment to Don Schaeffer and denied summary judgment to the
appellant Ohio Mutual Insurance Co., thereby requiring Ohio Mutual to
defend and indemnify Don Schaeffer in the underlying litigation under the
liability coverage for Recreational Vehicles and the excess/umbrella policy
as well.
Assignment of Error #2
The trial court erred prejudicially to the appellant when it found that
the excess/umbrella policy also provided coverage for the same reasons as
the primary Farm Owners policy.
{¶ 7} We first note that in reviewing a ruling on a motion for summary judgment,
this court must apply the same standard as the trial court. Lorain Natl. Bank v. Saratoga
Apts., 61 Ohio App.3d 127, 129, 572 N.E.2d 198 (9th Dist.1989). Summary judgment
will be granted when there remains no genuine issue as to any material fact and, when
construing the evidence most strongly in favor of the nonmoving party, reasonable minds
can only conclude that the moving party is entitled to judgment as a matter of law.
Civ.R. 56(C). Further, we review de novo all the evidence and arguments presented in
appellant’s motion for summary judgment and appellee’s opposition.
4. {¶ 8} At issue is whether the insurance policy provided coverage for the tractor at
the time of the incident. “In Ohio, insurance contracts are construed as any other written
contract.” Andray v. Elling, 6th Dist. Lucas No. L-04-1150, 2005-Ohio-1026, ¶ 18,
citing Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 597
N.E.2d 1096 (1992). If the language of the policy is clear and unambiguous, there are no
issues of fact and interpretation is a matter of law. Inland Refuse Transfer Co. v.
Browning-Ferris Industries of Ohio, Inc., 15 Ohio St.3d 321, 322, 474 N.E.2d 271
(1984), citing Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146
(1978). Conversely, policies that are “reasonably susceptible of more than one
interpretation * * * will be construed strictly against the insurer and liberally in favor of
the insured.” Lane v. Grange Mut. Cos., 45 Ohio St.3d 63, 65, 543 N.E.2d 488 (1989).
Whether a policy is clear and unambiguous or requires interpretation is therefore a proper
issue for summary judgment.
{¶ 9} In appellant’s first assignment of error it contends that the trial court erred
when it found an ambiguity in the policy’s definition of a recreational vehicle. The
recreational vehicle endorsement in the policy provides, in part:
Personal Liability or Farm Personal Liability is extended to apply to
damages for bodily injury or property damage for which an insured
becomes legally responsible and Medical Payments to Others because of an
accident arising out of:
5. A. the ownership, operation, maintenance, use, loading, or unloading
of a recreational motor vehicle;
B. the entrustment by an insured of a recreational motor vehicle to
any person; * * *.
{¶ 10} “Recreational vehicle” is defined as:
A motorized land vehicle operated by you or any family member,
designed for recreational use off public roads including, but not limited to,
snowmobiles, tri-carts, all-terrain vehicles, similar motorized vehicles, and
motorized kick scooters with an engine size under 30 cc’s and does not
exceed 25 miles per hour.
Recreational motor vehicle does not include motorcycles,
motorbikes, trail motorcycles, dirt bikes, motor scooters, or mopeds.
Recreational motor vehicle also does not include any vehicle subject to
motor vehicle registration which is designated and equipped for use on
public roads.
{¶ 11} We agree with United that the tractor at issue was not designed for
recreational use. The term “designed” means the purpose for which the item was
manufactured or “devise[d] for a specific function or end.” Webster’s Collegiate
Dictionary 338 (2003). There is no dispute that the tractor was manufactured to be used
in farming, not recreational activities.
6. {¶ 12} We further note that appellee’s declarations page specifically listed
coverage for one recreational vehicle which was described under the “Recreational
Vehicles/Snowmobiles” property coverage page as “2004 Yamaha YFM660FTGR, 600
CC’s.”
{¶ 13} Finding that the tractor is a not a recreational vehicle we must now turn to
United’s chief argument in its summary judgment motion: that the tractor at issue was
not an “insured vehicle,” was properly categorized as a “motorized vehicle” and was
excluded from coverage. The liability coverage provision of the policy provides the
following definitions:
8. Motor Vehicle means a motorized vehicle, a trailer, or a semi-
trailer, and all attached machinery or equipment, if:
a. it is subject to motor vehicle registration; or
b. it is designed for use on public roads.
9. Motorized Vehicle means a self-propelled land or amphibious
vehicle regardless of method of surface contact. This includes parts and
equipment.
This does not include vehicles that are designed and used to assist
the handicapped and are not required to be licensed for road use.
{¶ 14} The parties have presented no evidence or arguments that the tractor at
issue was subject to motor vehicle registration. United contends that the tractor is a
7. motorized vehicle and coverage is excluded. The farm liability provisions provide, in
relevant part:
Coverage L- Farm Personal Liability
We pay up to our limit, all sums for which an insured is legally
liable because of bodily injury or property damage caused by an occurrence
to which this coverage applies. We will defend a suit seeking damages if
the suit resulted from bodily injury or property damage not excluded under
this coverage. We may make investigations and settle claims or suits that
we decide are appropriate. We do not have to provide a defense after we
have paid an amount equal to our limit as a result of a judgment or written
statement.
{¶ 15} The section captioned: “Exclusions that Apply to Coverages L and M”
provides, in part:
We do not pay for a loss if one or more of the following excluded
events apply to the loss, * * *. We do not pay for bodily injury or property
damage which results directly or indirectly from:
[7]b. the entrustment by an insured of a motorized vehicle,
recreational motor vehicle, or watercraft to any person; * * *.
{¶ 16} Appellee conversely argues that the tractor falls under the definition of a
“motor vehicle” and is covered because it is designed for use on public roads.
Specifically, it is equipped with lights, turn signals, seat belts, a horn, flashing lights, and
8. a slow-moving vehicle sign. Appellee further asserts that he did, on several occasions,
drive the tractor at issue on public roads in Erie County, Ohio, and that both parties
contracted with the knowledge that appellee desired coverage for these activities.
Appellee then contends that the exclusions relied upon by United apply only to motorized
vehicles and are, thus, inapplicable.
{¶ 17} In support, appellee relies on a Wisconsin Supreme Court case which
analyzed the issue of whether the insured’s tractor was a covered motor vehicle or a
motorized vehicle and excluded from coverage. Olson v. Farrar, 809 N.W.2d 1
(Wis.2012). In Olson, Olson enlisted Farrar to help him move a mobile home he had
purchased. Id. at 222-223. The home was hitched to Farrar’s tractor for the eight-mile
journey. Id. at 223. The tractor stalled at the top of a hill causing the home to roll
backwards and crash into Olson’s vehicle. Id. Olson commenced an action against
Farrar for damages.
{¶ 18} Thereafter, the insurer commenced a declaratory judgment action asking
the court to determine that it owed no coverage based on exclusions for motor vehicles
and for damage to property that is used by or in the care of an insured. Id. at 224.
Relevantly, the circuit court determined that it was a “very close issue” but found that
because the tractor was a motor vehicle there was no coverage under the policy. Id. The
appellate court reversed finding that the insurer had not pointed to any undisputed facts
showing that Farrar’s tractor was “designed for use on public roads.” Id. at 226.
9. {¶ 19} The Wisconsin Supreme Court disagreed finding that because the policy’s
definition of a motor vehicle, specifically the “designed for use” clause in the policy
could reasonably be interpreted to broadly mean any conceivable use, or narrowly
interpreted to include only the particular purpose for which the vehicle was contrived. Id.
at 239. The court opted to interpret the clause broadly in favor of the insured.
{¶ 20} Reviewing Olson, though we agree that clauses should be interpreted
broadly to favor insureds, we further note that contract interpretation also requires that
words and phrases be given their ordinary, common meanings. See Foster Wheeler
Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361,
678 N.E.2d 519 (1997). In our view, the fact that the tractor was equipped with safety
features allowing its use on public roads does not alter its purpose as farm equipment.
These features were installed because limited public road travel was anticipated in such
instances as going from farm field to field. The tractor’s slow speed and slow
acceleration and stopping make it unsafe for extended road travel. Thus, we find that the
tractor at issue was a motorized vehicle and subject to the exclusions which apply to
sections L and M as set forth above. Liability coverage is excluded for entrustment of a
motorized vehicle by any insured to any person. At the time of the incident, the tractor
was being operated by Mason Jar employee Mike Hermes.
{¶ 21} Based on the foregoing, we find that the policy did not provide liability
coverage under the recreational use endorsement and it is precluded under the motorized
vehicle coverage exclusions. Appellant’s first assignment of error is well-taken.
10. {¶ 22} Appellant’s second assignment of error contends that the court erred when
it summarily concluded that the excess/umbrella policy provided coverage based on the
same reasons that the primary farm policy provided coverage. Based on our disposition
of appellant’s first assignment of error, we find that appellant’s second assignment of
error is well-taken.
{¶ 23} On consideration whereof, we reverse the July 10, 2013 judgment of the
Erie County Court of Common Pleas. Because we find that there are no genuine issues
of material fact and that the policy excludes coverage, summary judgment is hereby
entered in favor of United. Pursuant to App.R. 24, costs of this proceeding are assessed
to appellee.
Judgment reversed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________ JUDGE Arlene Singer, J. _______________________________ Stephen A. Yarbrough, P.J. JUDGE CONCUR. _______________________________ JUDGE
This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.sconet.state.oh.us/rod/newpdf/?source=6.
11.