King v. Nationwide Ins. Co.

• Decision Date: 02 March 1988
• Docket Number: No. 87-595,87-595
• Citation: 35 Ohio St.3d 208,519 N.E.2d 1380
• Parties: KING, Exr., Appellant, v. NATIONWIDE INSURANCE COMPANY, Appellee.
• Court: Ohio Supreme Court

Page 208

35 Ohio St.3d 208

519 N.E.2d 1380

KING, Exr., Appellant, v. NATIONWIDE INSURANCE COMPANY, Appellee.

No. 87-595.

Supreme Court of Ohio.

March 2, 1988.

Syllabus by the Court

Where provisions of a contract of insurance are reasonably susceptible of more than one interpretation, they will be construed strictly against the insurer and liberally in favor of the insured. (Faruque v. Provident Life & Acc. Ins. Co. [1987], 31 Ohio St.3d 34, 31 OBR 83, 508 N.E.2d 949, syllabus; Thompson v. Preferred Risk Mut. Ins. Co. [1987], 32 Ohio St.3d 340, 342, 513 N.E.2d 733, 736, and cases cited therein, followed.)

As indicated from the record, including the stipulations of the parties, Dale Gordon died of personal injuries sustained as the result of an automobile accident that occurred on May 10, 1983. The driver of the other vehicle involved in the accident was the negligent party. At the time of the accident, Gordon was driving an automobile owned by Mildred Foster, a co-worker. Gordon was in the course of his employment with the Akron-Summit Community Action Agency ("ASCAA").

Gordon's estate sought compensation for Gordon's injuries and death, and was paid the maximum amount of $15,000 available under the negligent driver's bodily injury insurance policy, and received $35,000 under Foster's underinsured motorist insurance coverage. Plaintiff-appellant, H. Eugene King, executor of Gordon's estate, sought further recovery under a contract of insurance issued by defendant-appellee, Nationwide Insurance Company, to ASCAA, which provided underinsured motorist insurance in the amount of $250,000.

Upon Nationwide's denial of his claim, King filed this declaratory judgment action seeking, inter alia, a declaration that Gordon was an insured under the Nationwide policy and requesting an order for Nationwide to submit to arbitration of the claim.

Pursuant to motions for summary judgment filed by both parties, the trial court entered summary judgment for King, declaring that Nationwide's underinsured motorist provision encompassed all ASCAA employees (including Gordon), and ordered arbitration. The trial court further found no just reason for delay and Nationwide appealed.

The court of appeals reversed, finding that the policy covered only employees designated as drivers in named vehicles owned by ASCAA, and that, as Gordon was not a designated driver, he was outside the scope of coverage afforded by the policy.

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

Scanlon & Gearinger Co., L.P.A., Timothy F. Scanlon and Robert A. Royer, Akron, for appellant.

Robert J. Drexler, Akron, for appellee.

MOYER, Chief Justice.

This appeal raises the question whether underinsured motorist coverage provided in an employer's insurance policy extends to a deceased employee whose fatal injuries were sustained in the course of employment as the result of an automobile accident with an underinsured motorist, where the employee was not listed as a designated driver nor was he in an auto named under the policy issued to his employer.

For the reasons that follow, we hold that the employee, Gordon, was covered by his employer's insurance policy.

I

A

The insurance policy before the court is a standard form policy, applicable to individuals and families and, apparently, routinely issued to corporate and other legal entities as well.

The policy defines certain general terms, in pertinent part, as follows:

"DEFINITIONS

"The language of this insurance policy includes certain common words for easy understanding. They have exactly defined meanings, however. In this policy:

"1. the words 'YOU' and 'YOUR' mean or refer to the policyholder first named in the attached Declarations, and include that policyholder's spouse if living in the same household.

"2. the words 'WE,' 'US,' 'OUR,' and 'THE COMPANY' mean or refer to the Nationwide Mutual Insurance Company.

"3. the words 'THE INSURED,' 'AN INSURED,' and 'ANY INSURED' mean or refer to the persons and organizations specifically indicated as entitled to protection under the coverage being described.

"4. the words 'YOUR AUTO' mean the vehicle or vehicles described in the attached Declarations.

" * * *

"7. the word 'OCCUPYING' means in, upon, entering, or alighting from a motor vehicle."

The insuring provisions of the Nationwide contract provide coverage against physical damage to "your auto"; "auto liability (for damage or injury to others caused by your auto)"; "medical payments (medical expenses payable regardless of fault)"; "family compensation (medical, confinement, and death benefits, payable regardless of fault)"; "uninsured motorists (for bodily injury caused by uninsured motorists)"; and "comprehensive family liability (for damage or injury to others from nonvehicular causes)."

By endorsement, ASCAA's uninsured motorist coverage was extended to cover bodily injury caused by underinsured motorists. The uninsured motorist provision provides, in pertinent part:

"COVERAGE

"Under this coverage, we will pay bodily injury damages that you or your legal representative are legally entitled to recover from the owner or driver of an * * * [underinsured] motor vehicle. Damages must result from an accident arising out of the ownership, maintenance, or use of the * * * [underinsured] vehicle. Bodily injury means bodily injury, sickness, disease, or death.

"Relatives living in your household also have this protection. Anyone else is protected while occupying:

"1. your auto.

"2. a motor vehicle you do not own, while it substitutes temporarily for your auto. Your auto must be out of use because of breakdown, repair, servicing, loss, or destruction.

"3. a four-wheel motor vehicle newly acquired by you. The coverage applies only during the first 30 days you own the vehicle, unless it replaces your auto.

"4. any other motor vehicle while it is being operated by you or a relative living in your household. However, the vehicle must not be owned or furnished to you or a relative living in your household for regular use.

"This coverage also protects others for damages they may be legally entitled to recover because of bodily injury suffered by an insured.

"In any * * * [underinsured] motorists claim, we will jointly determine with the insured or his legal representative whether there is legal right to recover damages, and if so in what amount. If agreement cannot be reached with regard to liability or amount of damages, the matter will be decided by arbitration. * * *

" * * *

"COVERAGE EXCLUSIONS

"This * * * [Underinsured] Motorists insurance does not apply as follows:

" * * *

"4. It does not apply to bodily injury suffered while occupying a motor vehicle owned by you or a relative living in your household, but not insured for * * * [Underinsured] Motorists coverage under this policy. * * *"

In the absence of policy declarations in the record, the parties stipulated, inter alia, to the following facts:

"1. * * * the Akron-Summit Community Action Agency ('ASCAA') was the named insured under a contract of insurance issued by the defendant, Nationwide Insurance Company.

" * * *

"10. * * * [Mildred Foster's] vehicle was not furnished to Dale Gordon or the ASCAA for regular use.

" * * *

"12. Dale Gordon was not named as a designated driver under the auto policies issued to * * * [ASCAA].

"13. * * * [Mildred Foster] * * * was not named as a driver in any of the Nationwide policies issued to ASCCA [sic ].

" * * *

"15. Dale Gordon was not a resident of the households of any of the drivers named as drivers of any of the vehicle [sic ] insured by Nationwide for ASCAA.

"16. The five vehicles insured by Nationwide for ASCCA [sic ] were all operational and in use by others when this accident occurred.

"17. Each driver for the ASCCA [sic ] was listed by name for the vehicle they [sic ] were going to drive under a category which stated 'List Each Drive [sic ] in Household.' "

No list of designated drivers or named vehicles was made a part of the insurance policy or otherwise incorporated by reference into the policy. Nor do the stipulations or any other declaration indicate what significance, if any, was to be given the fact that Dale Gordon was not named as a designated driver under the auto policies and that each driver for ASCAA was "listed by name for the vehicle they [sic ] were going to drive."

Nationwide argues that we should interpret the stipulations to mean that only those drivers who were listed by name for the specific vehicles they were going to drive for ASCAA were covered by the Nationwide policy and that Dale Gordon was not covered because he was not named as a designated driver. The difficulty we have in adopting Nationwide's argument is that there simply is no language in the policy or in the stipulations that would cause us to conclude that such a legal conclusion flows from the facts before us.

B

As in all cases in which insurance coverage is provided by an insurance policy, the issue in this case will be determined by a " * * * reasonable construction [of the contract] in conformity with the intention of the parties as gathered from the ordinary and commonly understood meaning of the language employed." Dealers Dairy Products Co. v. Royal Ins. Co. (1960), 170 Ohio St. 336, 10 O.O.2d 424, 164 N.E.2d 745, paragraph one of the syllabus; Bobier v. National Cas. Co. (1944), 143 Ohio St. 215, 28 O.O. 138, 54 N.E.2d 798, paragraph one of the syllabus. However, it is well-settled that, where provisions of a contract of insurance are reasonably susceptible of more than one interpretation, they will be construed strictly against the insurer and liberally in favor of the insured. Faruque v. Provident Life & Acc. Ins. Co. (1987), 31 Ohio St.3d 34, 31 OBR 83, 508 N.E.2d 949, syllabus; Thompson v. Preferred Risk Mut. Ins. Co. (1987), 32 Ohio St.3d 340, 342, 513 N.E.2d 733, 736, and cases cited therein.

Considering the policy...