Erie Ins. Group v. Fisher

• Decision Date: 31 December 1984
• Docket Number: No. 84-43,84-43
• Citation: 15 Ohio St.3d 380,474 N.E.2d 320,15 OBR 497
• Parties: , 15 O.B.R. 497 ERIE INSURANCE GROUP et al., Appellees, v. FISHER; Hess, Appellant.
• Court: Ohio Supreme Court

Page 380

15 Ohio St.3d 380

474 N.E.2d 320, 15 O.B.R. 497

ERIE INSURANCE GROUP et al., Appellees, v. FISHER Hess, Appellant.

No. 84-43.

Supreme Court of Ohio.

Dec. 31, 1984.

Syllabus by the Court

A declaratory judgment action filed by an insurer against an insured, the purpose of which is to construe an insurance policy and determine the insurer's obligations to the insured, and is not for the purpose of determining liability in an action for the recovery of money, is properly triable to the court. (Travelers Indemnity Co. v. Cochrane, 155 Ohio St. 305, 98 N.E.2d 840 , approved and followed.)

The action arose out of a motor vehicle accident which occurred on October 24, 1978. Defendant-appellant, Brenda Hess, was the passenger in a van owned by plaintiff-appellee Starkey Refrigeration, Inc. ("Starkey") and operated by defendant, Roy Fisher, a Starkey employee.

Starkey service personnel, including Fisher, were given a company van for business use and for driving to and from their homes. Personal use of the vans, including the transporting of passengers, was prohibited by company rule. Evidence introduced at trial showed that Starkey's president, Jeff Starkey, knew of some departures from the "no personal use" rule. These departures consisted primarily of occasional stops at a bar on the way home from work by Fisher and Ezra Starkey, who is Jeff Starkey's brother and a company supervisor. No action was ever taken against Fisher for these known violations of the rule. Fisher also made extensive use of the van for other personal reasons.

On the night of the accident, Fisher left work around 5:00 p.m. and met Hess at the home of a mutual friend. Fisher and Hess proceeded to Betty and Tina's bar at approximately 11:00 p.m. Fisher was intoxicated when he began to drive Hess home in the company van around 1:00 a.m. The van left the road while rounding a curve and crashed into a culvert resulting in injuries to Hess.

Hess then filed suit against Fisher and Starkey. The van was covered by a contract of insurance issued by the Erie Insurance Group ("Erie") to Jeff Starkey as the named insured. The policy contained a section known as an "omnibus clause" as required by R.C. 4509.51. The clause included as an insured "any other person using such automobile with the permission of the named insured, provided his actual operation * * * thereof is within the scope of such permission * * *." Plaintiffs-appellees, Erie and Starkey, then filed this action against Fisher seeking a declaratory judgment that at the time of the accident Fisher was not an insured, and, therefore, that Erie was under no duty to defend Fisher in the suit by Hess. Pursuant to Civ.R. 24, Hess then moved to intervene in the declaratory judgment action as a party-defendant. Upon being permitted to intervene, Hess answered, maintaining that Fisher had been given implied permission to use the van for personal uses. The answer also included a jury demand. After reviewing the motions of the parties, the trial court ruled that the action should be tried to the bench. The evidence was heard by a referee who issued findings of fact and conclusions of law. The referee recommended that a declaratory judgment be issued finding that Fisher was not an insured at the time of the accident and that Erie had no duty to defend Fisher. The trial court issued the declaratory judgment as recommended. The court of appeals affirmed the trial court.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Graham, Dutro & Nemeth and John C. Nemeth, Columbus, for appellees.

Bradley & Farris Co., L.P.A., Philip R. Bradley and Richard D. Topper, Jr., Columbus, for appellant.

JAMES P. CELEBREZZE, Justice.

This appeal presents two issues for resolution. First, under what circumstances does the right to a jury trial exist in a declaratory judgment action? Second, once initial permission has been granted to use an automobile, for what scope of operations does the user remain a permitted user for purposes of coverage under the omnibus clause of an insurance policy?

A controversy between an insurer and its insured as to its liability or duty to defend is properly determinable by a declaratory judgment action. Travelers Indemnity Co. v. Cochrane (1951), 155 Ohio St. 305, 98 N.E.2d 840 , paragraph one of the syllabus. R.C. 2721.10 provides for jury trial in declaratory judgment actions as follows:

"When a proceeding under sections 2721.01 to 2721.15, inclusive, of the Revised Code, involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending."

In Cochrane, supra, at 314, 98 N.E.2d 840, this court construed the predecessor to R.C. 2721.10 (G.C. 12102-9) and stated that "[d]epending upon the character of the declaratory judgment sought, the action may be tried either to a jury or to a court. The question is determined as in other civil actions."

R.C. 2311.04 provides for the right to a jury trial in civil actions as follows:

"Issues of law must be tried by the court, unless referred as provided in the Rules of Civil Procedure. Issues of fact arising in actions for the recovery of money only, or specific real or personal property, shall be tried by a jury, unless a jury trial is waived, or unless all parties consent to a reference under the Rules of Civil Procedure.

"All other issues of fact shall be tried by the court, subject to its power to order any issue to be tried by a jury, or referred." (Emphasis added.)

In Cochrane, this court held that in an action whereby the insurer merely sought a determination of its obligations to the insured and sought the avoidance and cancellation of the policy as to the insured, and did not seek a decree relating to "the recovery of money only," the question was properly one for the court. It was further held to be the province of the court to ascertain the facts necessary to construe the contract and determine the obligations of the insurer. However, the right to trial by jury does exist in a declaratory judgment action which is between an insurer and the insured or the injured party, and which is for the recovery of money. See Ohio Farmers Indemnity Co. v. Chames (1959), 170 Ohio St. 209, 163 N.E.2d 367 ; Travelers Indemnity Co. v. Cochrane, supra; Schaefer v. First Natl. Bank (1938), 134 Ohio St. 511, 18 N.E.2d 263 ; Harleysville Mut. Ins. Co. v. Santora (1982), 3 Ohio App.3d 257, 444 N.E.2d 1076; R.C. 2721.10 and 2311.04. The courts of other states which have also enacted the Uniform Declaratory Judgments Act have consistently held that the right to a jury trial exists in such an action. See Annotation (1950), 13 A.L.R.2d 777. Where the issues for resolution are legal rather than equitable, attempts to circumvent the right to a jury trial by the filing of complaints which facially sound in equity have been rejected by the courts. Gordon v. Continental Cas. Co. (1983), 91 A.D.2d 987, 457 N.Y.S.2d 844; Utica Mut. Ins. Co. v. Beers Chevrolet Co. (1937), 250 A.D. 348, 294 N.Y.S. 82; American Employers Ins. Co. v. Wentworth (1939), 90 N.H. 112, 5 A.2d 265. The right to a jury trial depends...