Lima City Mutual Ins. Association v. Larry M. Mullins

• Decision Date: 06 November 1992
• Docket Number: 92WD012,92-LW-4919
• Parties: Lima City Mutual Insurance Association, et al., Appellants v. Larry M. Mullins, et al., Appellees Court of Appeals
• Court: Ohio Court of Appeals

Lima City Mutual Insurance Association, et al Appellants v. Larry M. Mullins, et al., Appellees

No. 92WD012.

92-LW-4919 (6th)

Court of Appeals of Ohio, Sixth District Wood

November 6, 1992

No 90-CV-494.

Keith J. Watkins, for defendant-appellant and third-party plaintiff, Jones Motor Group, Inc.

David W. Stuckey, for third-party defendant-appellee, Progressive Casualty Insurance Company.

OPINION

SHERCK J.

This is an appeal from an order of the Wood County Court of Common Pleas which granted summary judgment to an insurance company that had issued a liability policy covering a truck driver's "non trucking use" of his vehicle. Because we find the trial court properly found that the truck driver was operating his rig "in the business of" his employer at the time of the accident which gave rise to this suit, we affirm the trial court's decision.

Appellant is Jones Motor Group, Incorporated, a self-insured trucking company which brings this appeal from an order finding it the liable insurer for one of its leased trucks. Appellee is the Progressive Casualty Insurance Company which issued a policy on the same truck The policy which appellee issued covered appellant's truck when it Was not engaged in the act of trucking.

George McCullough, III is the owner and operator of a semi-tractor trailer truck which is under exclusive lease to appellant. On April 10, 1990, McCullough delivered a load to appellant's terminal in Whitehouse, Ohio. After unloading, McCullough telephoned a dispatcher at appellant's Canton, Ohio, terminal to see if another load was available. He was informed that no loads were available, but that he would be "put on the board" indicating that he was in line with other truckers for future loads. McCullough informed the Canton dispatcher that he intended to return to his home in Dundee, Michigan, and requested that he be informed as to when a load would be available for him. On April 11, 1990, McCullough telephoned the Canton dispatcher and was again advised that no load was available for him. On April 12, 1990, the Canton dispatcher told McCullough that he was next in line for a load to Chicago. It was at this point that McCullough opted to drive to Canton so as to be readily available when a load was assigned. As McCullough was driving to the Canton terminal, he was involved in a collision near the city of Perrysburg, Ohio, with another vehicle operated by Larry M. Mullins. As a result of the collision, Mullins' vehicle left the highway and struck a house owned by Denford and Darlene Tucker.

The Tuckers and their subrogee, Lime City Mutual Insurance Association, brought suit against Mullins and his employer, Midwest Environmental Control, Inc. The Tuckers also sued McCullough and appellant Jones Motor Group, Inc. McCullough cross-claimed against appellant alleging a duty to insure and filed a third-party complaint against appellee, Progressive Casualty Insurance-Company, seeking a declaration of indemnification for losses attributable to McCullough. Appellant filed a similar third-party complaint against appellee seeking indemnification. In the trial court both appellant and appellee moved for summary judgment. Appellant argued that McCullough's trip to Canton was a non-trucking use of the leased vehicle and for that reason appellee is responsible to insure McCullough. Appellee pointed to exclusionary language in an endorsement to its policy with McCullough which provides:

"1. The following exclusions are added:

"This insurance policy does not apply to:

"* * *

"b. A covered `auto' while used in the business of anyone to whom the 'auto' is rented. ***" (Emphasis added.)

Appellee argued McCullough was using his vehicle in the business of one to whom it had been rented; therefore, appellee was not obliged to provide insurance.

On November 13, 1991, the trial court entered a decision and order granting summary judgment to appellee and denying appellant's cross motion for summary judgment. Following a finding by the trial court that there was no just reason for delay, appellant perfected this appeal. Appellant cites three assignments of error:

"I. THE COURT BELOW ERRED TO THE PREJUDICE OF APPELLANT IN GRANTING APPELLEE'S MOTION FOR SUMMARY JUDGMENT.

"II. THE COURT BELOW ERRED TO THE PREJUDICE OF APPELLANT IN FAILING TO HOLD THAT AS A MATTER OF LAW, THE TERM 'USED IN THE BUSINESS OF' IN APPELLEE'S POLICY IS SUSCEPTIBLE OF DIFFERENT INTERPRETATIONS AND AMBIGUOUS.

"III. IN THE ALTERNATIVE, THE COURT BELOW ERRED TO THE PREJUDICE OF APPELLANT, BECAUSE REASONABLE MINDS COULD REACH THE CONCLUSION THAT MCCULLOUGH WAS NOT 'USING' HIS TRUCK 'IN THE BUSINESS OF' APPELLANT AT THE TIME OF THE ACCIDENT, AS CONTEMPLATED BY THE PARTIES IN THE CONTRACT OF INSURANCE.'S

As appellant's second and third assignments of error are essentially components of its first assignment which contests the grant of summary judgment, all will be discussed together.

The trial court found that appellee was entitled to a summary judgment. The rules governing motions for summary judgment pursuant to Civ.R. 56 are well established. Three factors must be demonstrated:

"(1) That there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.

"The burden of showing that no genuine issue exists as to any material fact falls upon the moving party in requesting a summary judgment." Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66.

See, also Johnson v. New London (1988), 36 Ohio St.3d 60, 61.

Between appellant and appellee no facts are in dispute. The sole question is whether McCullough was using his vehicle "in the business of" appellant trucking company. If he was, then the trial court did not err in finding that appellee was entitled to judgment as a matter of law.

Appellant makes two arguments. First, appellant maintains that the trial court erred by initially failing to find the phrase "used in the business of" to be ambiguous. This is a significant assertion because in cases where the terms of a contract are clear and unambiguous, courts may construe those terms as a matter of law. Inland Refuse Transfer v. Browning-Ferris (1984), 15 Ohio St.3d 321, 322.

Our research concerning the phrase "used in the business of" shows that phrase to be commonly used in insurance contracts. Numerous courts within and without this state have considered the language. See, Johnson v. Angerer (1968), 16 Ohio App.2d 16, 18; Overly v. American Fidelity & Casualty Company (Mahoning App. 1961), 89 Ohio Law Abs. 129, 130; Hartford Insurance Company v. Occidental Fire & Casualty (7 C.A. 1990), 908 F. 2d 235, 238-239; Central National Ins. Co. v. Liberty Mutual Ins. Co. (N.D.S.C. 1988), 685 F. Supp. 123, 126; Carriers Insurance Co. v. Griffie (W.D. PA. 1973), 357 F. Supp. 441, 442; St. Paul Fire & Marine Ins. Co. v. Frankart (1977), 69 Ill. 2d 209, 370 N.E. 2d 1058. These courts have found no ambiguity in the phrase and have defined the phrase by its common meaning: that being, "used to further the commercial interests of the lessee," Hartford Insurance Co. v. Occidental Fire & Casualty Co., supra, at 239, or "acting in the scope of his duties ***." Overly v. American Fidelity & Casualty Co., supra, at 130. Therefore, we find that the trial court acted properly in applying the common unambiguous meaning of the questioned phrase to the undisputed facts of the case.

Accordingly, appellant's second assignment of error is found not well-taken.

Next, we must analyze the court's employment of the phrase with respect to the facts of the case. The trial court found two grounds for determining that McCullough used his rig "in the business of" appellant. By applying the doctrine of respondeat superior, the trial court concluded that, "clearly, McCullough was not off on some independent adventure through the countryside. He was operating a truck leased to Jones, headed toward a Jones terminal knowing he was next on the list to haul a load to Chicago, and knowing that timing was important ***." Additionally, the trial court found that McCullough was acting as statutory employee of appellant as a matter of law by virtue of the syllabus rules of Wyckoff Trucking v. Marsh Brothers Trucking (1991), 58 Ohio St.3d 261. We will discuss these findings in reverse order.

In Wyckoff Trucking the Ohio Supreme Court established a "bright line" test concerning liability for vehicles leased by interstate motor carriers. At paragraph one of the syllabus, the Supreme Court held that the common law doctrine of respondeat superior as it relates to interstate motor carriers has been superseded by the Interstate Commerce Commission's ("ICC") regulations which form a basis for determining primary liability for the tortious acts of an employee of such carrier. Paragraph two of the Wyckoff Trucking syllabus holds that, under ICC regulations, for liability to attach to an interstate carrier-lessee it need only be established that (1) a lease of the vehicle was in effect at the time the cause of action arose, and (2) the vehicle...