Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm

• Decision Date: 16 August 1995
• Docket Number: No. 94-1113,94-1113
• Citation: 652 N.E.2d 684,73 Ohio St.3d 107
• Parties: , 101 Ed. Law Rep. 1070 NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Appellee, v. GUMAN BROTHERS FARM et al.; Mercer et al., Appellants.
• Court: Ohio Supreme Court

Page 107

73 Ohio St.3d 107

652 N.E.2d 684, 101 Ed. Law Rep. 1070

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Appellee, v. GUMAN BROTHERS FARM et al.; Mercer et al., Appellants.

No. 94-1113.

Supreme Court of Ohio.

Submitted June 6, 1995.

Decided Aug. 16, 1995.

The defendant-appellee, seventeen-year-old Donald Mercer ("Donald"), was seriously injured while working in a silo on the Guman Brothers Farm. Donald's father, Charles Mercer ("Mercer"), filed suit on behalf of himself and as next friend, against Guman Brothers Farm, Nathan Guman and Gregory Guman ("the farm"), claiming their negligence caused Donald's injuries. At the time of the accident, the farm had liability insurance with Nationwide Mutual Fire Insurance Company ("Nationwide"). Nationwide filed a complaint seeking a declaratory judgment that its policy with the farm excluded coverage for claims for Donald's injuries, based on his status as a farm "employee." Mercer took the position in the declaratory-judgment action that because his son's work on the farm was part of an Occupational Work Experience ("OWE") program through his high school, that he was a student and not an "employee." ¹

After the injury, Donald applied for and received workers' compensation payments, although the farm's workers' compensation coverage had presumably lapsed by reason of nonpayment of premium. Because it was a noncomplying employer, the farm was not entitled to the immunity accorded to complying employers by R.C. 4123.74; thus, the insurance coverage through Nationwide was a potential source of recovery for Donald's injuries.

The trial court declared Nationwide contractually obligated to defend the farm and pay any judgment rendered against it on behalf of Mercer. The court determined that Donald's participation in the OWE program rendered him a student, and, therefore, precluded him from qualifying as an "employee" for purposes of Nationwide's policy exclusion.

The court of appeals reviewed the decision de novo as an issue of law, and reversed the trial court, holding that while Donald had a dual status as both a student and an employee, his student status was incidental to his primary function as that of an employee on the farm. Accordingly, Nationwide had no duty to indemnify or defend the farm.

The cause is now before this court pursuant to an allowance of a discretionary appeal.

Baker, Hackenberg & Collins Co., L.P.A., I. James Hackenberg and Richard A. Hennig, Painesville, for appellee.

Sindell, Lowe & Guidubaldi, Mark L. Wakefield and Daniel M. Sucher, Cleveland, for appellants.

COOK, Justice.

This case presents two issues. We first determine that the court of appeals properly reviewed the trial court decision de novo because the interpretation of a clear and unambiguous insurance contract is a matter of law. Second, we conclude that a student who works part of the school day in an OWE program nevertheless qualifies as an "employee" while at work.

I

In his first proposition of law, Mercer argues that the judgment of the trial court was a factual determination rather than a legal interpretation, and that the appellate court's de novo review was therefore erroneous. Mercer contends that because the insurance contract failed to define "employee," the term is ambiguous and this ambiguity makes the interpretation one of fact rather than law.

The mere absence of a definition in an insurance contract does not make the meaning of the term ambiguous. "If a contract is clear and unambiguous, then its interpretation is a matter of law and there is no issue of fact to be determined." Inland Refuse Transfer Co. v. Browning-Ferris Industries of Ohio, Inc. (1984), 15 Ohio St.3d 321, 322, 15 OBR 448, 449, 474 N.E.2d 271, 272. A court must give undefined words used in an insurance contract their plain and ordinary meaning. Miller v. Marrocco (1986), 28 Ohio St.3d 438, 439, 28 OBR 489, 491, 504 N.E.2d 67, 69. Here, the term "employee" is not defined, but does have a plain and ordinary meaning. It is, therefore, unnecessary and impermissible for a court to resort to construction of that language. Karabin v. State Auto. Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 166-167, 10 OBR 497, 499, 462 N.E.2d 403, 406. Thus, the interpretation of this insurance contract is a matter of law. Unlike determinations of fact which are given great deference, questions of law are reviewed by a court de novo. Ohio Bell Tel. Co. v. Pub. Util. Comm. (1992), 64 Ohio St.3d 145, 147, 593 N.E.2d 286, 287. We conclude that the court of appeals properly applied a de novo standard of review.

II

In his second proposition of law, Mercer contends that because Donald was a full-time student in the OWE program, the policy exclusion of an "employee" is inapplicable to him and Nationwide had to indemnify the farm on this claim. The policy exclusion provides:

"This insurance does not apply to:

"(n) 'Bodily injury' sustained by:

"(1) Any employee (other than a 'residence employee') as a result of his or her employment by the 'insured;'

"(2) Any 'residence employee' * * *; or

"(3) The spouse, child, parent, brother or sister of any employee as a consequence of ...