Barge v. Jaber

Decision Date27 August 1993
Docket NumberNo. C-1-91-031.,C-1-91-031.
Citation831 F. Supp. 593
PartiesHarold A. BARGE, et al., Plaintiffs, v. Michael JABER, et al., Defendants.
CourtU.S. District Court — Southern District of Ohio

James R. Matthews, Keating, Muething & Klekamp, Cincinnati, OH, for Scott Allen Barge, Harold A. Barge and June Barge.

John G. Patten, Jr., Wilder, KY, for Safeco Ins. Co. of America.

Joseph Warren Gelwicks, Rendigs, Fry, Kiely & Dennis, and Kenneth Bruce Flacks, Cincinnati, OH, for Michael Jaber.

Timothy Paul Heather, Benjamin, Yocum & Heather, Cincinnati, OH, for Anthony J. Raniero.

Jay Richard Langenbahn, Lindhorst & Dreidame, Cincinnati, OH, for Northfield Ins. Co.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS' CROSS MOTION FOR SUMMARY JUDGMENT

SPIEGEL, District Judge.

This matter is before the Court on the Supplemental Defendants' Motion to Dismiss or for Summary Judgement (doc. 37), the Plaintiffs' Cross-Motion for Summary Judgement and Memorandum in Opposition to the Supplemental Defendants' Motion (doc. 38), the Supplemental Defendants' Reply and Memorandum in Opposition to the Plaintiffs' Motion (doc. 41), and the Plaintiffs' Reply (doc. 43).

BACKGROUND

On September 23, 1990, Cinderella Carriage Company ("Cinderella" or the "Insured"), a Kentucky corporation engaged in the business of providing horses and carriage rides, had a contract to provide horse carriage rides at a location in Indiana. Michael Jaber, an employee of Cinderella, was instructed to pick up a carriage in Cincinnati, Ohio and transport it to Indiana for the purpose of fulfilling the contract.

Upon learning that his truck would not start, Jaber contacted a friend, Anthony Raniero, in order to use Raniero's truck to pick up the carriage in Cincinnati and transport it to Indiana. The two attached a trailer belonging to Jaber to Raniero's truck. Unfortunately, the two used the wrong size towing ball for the trailer and failed to attach safety chains between the truck and trailer. The trailer broke free on I-71 in downtown Cincinnati, causing an accident which resulted in severe injuries to two of the Plaintiffs in this action ("Plaintiffs" or the "Barges").

As a result of the accident, the Plaintiffs filed an action against Cinderella. Cinderella in turn contacted its insurer, Northfield Insurance Company ("Northfield"), the Supplemental Defendant in this action. Northfield refused to defend Cinderella, and Cinderella failed to answer. This Court entered a default judgment against Cinderella on December 12, 1991.

The Plaintiffs then requested Northfield to pay its limit plus interest under the General Commercial Liability Policy it issued to Cinderella. Northfield refused, claiming that accident was exempt from coverage under a standard "auto exception" clause in the policy. It also claimed that absent the exception, the accident occurred outside the scope of the insurance policy which covered, according to Northfield, only accidents arising solely out of the horse carriage rides.

The Plaintiffs filed a supplemental petition in this Court seeking judgment against Northfield. Northfield, however, filed an action in state court in Kentucky seeking a declaratory judgment against Cinderella, to the effect that the accident was not within the scope of the policy's coverage. The Kentucky court found in favor of Northfield, concluding that the "accident was too remote to the specific policy classification of providing `horse carriage rides.'" See Supplemental Defendants' Motion to Dismiss or for Summary Judgement, Doc. 37, Exhibit "A" at 2.

Northfield now moves this Court to dismiss, or for summary judgment claiming that 1) the Kentucky judgment in its favor precludes this action; 2) the accident was excluded from the scope of the policy's coverage by virtue of the policy's "auto exception" clause; and 3) the accident was outside of the scope of the policy's coverage of injuries arising out of "horse carriage rides."

The Plaintiffs, on the other hand, claim that 1) the Kentucky judgment is not binding on this Court; 2) the "auto exception" provision is inapplicable to this case; and 3) the accident was clearly within the scope of the policy's coverage.

After careful consideration, the Court finds that the Kentucky judgment is not binding on this Court. We further find that there are no genuine issues of material fact in dispute. Finally, we hold that under the applicable theories of insurance law, the insurance policy's "auto exception" is applicable in this case, and the Defendant is entitled to judgment as a matter of law. We therefore conclude that the Supplemental Defendant's motion should be granted, and this case should be dismissed.

STANDARD OF REVIEW

The narrow question that we must decide on a motion for summary judgment is whether there exists a "... genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The Supreme Court elaborated upon the appropriate standard in deciding a motion for summary judgement as follows:

The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The moving party has the initial burden of showing the absence of a genuine issue of material fact as to an essential element of the non-movant's case. Id. at 321, 106 S.Ct. at 2552; Guarino v. Brookfield Township Trustees, 980 F.2d 399, 405 (6th Cir.1992); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989). If the moving party meets this burden, then the nonmoving party "must set forth specific facts showing there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Guarino, 980 F.2d at 405.

As the Supreme Court stated in Celotex, the non-moving party must "designate" specific facts showing there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553; Guarino, 980 F.2d at 405. Although the burden might not require the non-moving party to "designate" facts by citing page numbers, "`the designated portions must be presented with enough specificity that the district court can readily identify the facts upon which the non-moving party relies.'" Guarino, 980 F.2d at 405 (quoting Inter-Royal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir.1989), cert. denied, 494 U.S. 1091, 110 S.Ct. 1839, 108 L.Ed.2d 967 (1990)).

Summary judgment is not appropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Conclusory allegations, however, are not sufficient to defeat a motion for summary judgment. McDonald v. Union Camp Corp., 898 F.2d 1155, 1162 (6th Cir.1990).

ANALYSIS
I CHOICE OF LAW

As an initial matter, in this diversity suit, we must turn to Ohio choice of law principles to determine whether Ohio or Kentucky law should be applied in this case. Klaxon Co. v. Stentor Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941); Boys v. LaMaster, 927 F.2d 237, 239 (6th Cir.1991). While traditionally under Ohio choice of law principles, Ohio courts have applied the law of the state where the insurance contract was made, see generally, 16 Ohio Jur.2d Conflicts of Laws § 18 (1979 & Supp.1993), this principle should not be applied rigidly. In Paul v. West American Ins. Co., 19 Ohio App.3d 82, 482 N.E.2d 1309 (1984), for example, the Ohio court of appeals for Hamilton County applied the conflicts of laws doctrine of "interest analysis." Id. at 84, 482 N.E.2d 1309. Under this mode of analysis, the court must take into consideration numerous factors in deciding what law to apply. Included among those factors to be consider are a) whether the forum state or any other state involved in the action has a substantial interest in application of its law in the case at hand; and b) whether the interest of one of the states involved outweighs that of the other. Under this theory, the state with the greater interest in the matter should have its law applied. Id.

In this case, it is no simple task to determine which state's law should apply. Under the traditional theory, the law of Kentucky would apply, as the insurance policy was apparently made in Kentucky, the insured is a Kentucky Corporation, and the insurance agent is based in Kentucky as well. On the other hand, under the "interest analysis" approach, the Plaintiffs in this case are not only Ohio residents, but the injuries occurred in Ohio. The State of Ohio, therefore, would logically have a substantial interest in the application of its own laws, to its own citizens, who were injured within its borders. Clearly, there is no simple answer to the question of which law should apply.

Although it would appear that the balance of interests lean in favor of the application of Ohio law, after carefully considering the issues involved in this case, in conjunction with the applicable area of insurance law, we conclude that the result would be identical whether this Court applied Ohio or Kentucky law. We therefore deem it unnecessary to draw a definitive conclusion in this case with respect to which law is applicable, as we conclude that the courts of either state would reach the same result. See Restatement, Conflicts of laws 2d § 186, Comment c.

II THE KENTUCKY ACTION

First, Northfield claims that this action is barred by virtue of the judgement rendered in its favor in the Kentucky action. We disagree. In the Kentucky case, Northfield brought a declaratory judgement action seeking a determination that no coverage existed under the Northfield policy at issue in this case. In that case, in which Northfield was the...

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