Nationwide Mut. Ins. Co. v. Ferrin

• Decision Date: 02 January 1986
• Docket Number: No. 85-381,85-381
• Parties: , 21 O.B.R. 328 NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. FERRIN et al., Appellees.
• Court: Ohio Supreme Court

Page 43

21 Ohio St.3d 43

487 N.E.2d 568, 21 O.B.R. 328

NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. FERRIN et al., Appellees.

No. 85-381.

Supreme Court of Ohio.

Jan. 2, 1986.

This case arose July 5, 1979 when Carl D. Ferrin, an employee of Joule Yacht Transport, Inc., began transporting a yacht from Florida to Michigan with a semi-tractor truck. Because Ferrin's load was oversized, government regulations prohibited transporting the load on Ohio highways from Friday evening until Monday morning.

On Friday, July 6, 1979, Ferrin separated his tractor-truck from the trailer containing the yacht at a Dayton, Ohio truck stop. The next day Ferrin was driving the tractor to Orient to visit his parents when he became involved in an automobile accident.

Testimony was adduced from Barbara Joule of Joule Yacht Transporting, Inc. that drivers were not permitted to separate their tractors from the trailer or to use the tractor for personal business; that when confronted with a weekend layover the driver should plan to spend the weekend at the truck stop; and that as a consequence of his deviation from company rules, Ferrin was discharged. Ferrin testified however that he contacted the dispatcher who, upon being told of his plan to visit his parents, said "Okay," and hung up. Further testimony elicited the existence of written driver's instructions given to Ferrin by Joule which stated that weekend layovers were "a big problem" and the drivers were to be careful in such circumstances because of the potential for theft or damage to unattended loads. Barbara Joule testified that the Joule Employee Handbook indicated that "company drivers are never permitted to unhook from load and bobtail or use a company tractor for their personal use." Such personal use would be grounds for immediate dismissal.

The insurance contract, the interpretation of which comprises the underlying legal issue of this appeal, contained an omnibus "truckers endorsement" which states, with respect to liability insurance: " * * * 1. You are an insured for any covered auto. 2. Anyone else is an insured while using with your permission a covered auto you own, hire or borrow * * *."

Originally, the trial court sustained a motion for summary judgment on behalf of plaintiff, Nationwide Insurance Company, on May 27, 1980. The decision was subsequently reversed on appeal. On remand the trial court concluded, as a matter of law, that the insurance contract was a Florida contract governed by Florida law, which the trial court held to apply to the user of an insured vehicle who begins his journey with permission, and continues in force during the time he is operating the insured vehicle.

On appeal, the Court of Appeals for Franklin County affirmed the trial court.

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

Crabbe, Brown, Jones, Potts & Schmidt, William T. McCracken and David J. Richards, Columbus, for appellant.

Denmead, Gerrity & Tsitouris and Chris C. Tsitouris, Columbus, for appellee J.C. Penney Ins. Co.

Gary W. Hammond, Columbus, for appellee Allstate Ins. Co.

Ronald E. Plymale, Columbus, for appellees George Kemp and Eileen Murphy.

Douglas C. Myers, Columbus, for appellee Carl D. Ferrin.

PER CURIAM.

The issues presented for review are whether Florida or Ohio law applies and then, whether under the applicable law, Ferrin was using the tractor with permission at the time of the accident. For the reasons to follow we hold for appellees and affirm the appellate court below.

I

It is well-settled in Ohio that in cases involving a contract, the law of the state where the contract is made governs interpretation of the contract. Garlick v. McFarland (1953), 159 Ohio St. 539, 545, 113 N.E.2d 92 ; Switzer v. Carroll (C.A. 6, 1966), 358 F.2d 424, 426. In Gries Sports Enterprises, Inc. v. Modell (1984), 15 Ohio St.3d 284, 473 N.E.2d 807, this court adopted, in the syllabus, Section 188 of 1 Restatement of the Law 2d, Conflict of Laws (1971). Appellant seems to aver that, in addition, we implicitly adopted an exception to general conflict of law principles that would require an individual analysis of whether, absent express choice of law, Ohio has some "public policy" interest to obviate the intent of the parties and necessitate application of Ohio law. We did not adopt such a view. The only controlling law with precedential effect in Gries was the syllabus which adopted Section 188 of 1 Restatement of the Law 2d, Conflict of Laws. This section states at 575 that:

"In the absence of an effective choice of law by the parties * * *, the contacts to be taken into account * * * to determine the law applicable to an issue include:

"(a) the place of contracting;

"(b) the place of negotiations of the contract;

"(c) the place of performance;

"(d) the location of the subject matter of the contract, and

"(e) the domicile, residence, nationality, place of incorporation and place of business of the parties. * * * "

Insofar as the insurance contract herein was delivered to Joule's headquarters in Clearwater, Florida; that the address of Joule on the policy was Joule's Florida address; and that Ferrin was employed by Joule in Florida and left Florida to deliver the yacht to Michigan, more than ample basis was provided by the evidence to sustain the trial court's determination that Florida law was the applicable law. We therefore are compelled to affirm the determination that Florida law is applicable to the insurance contract.

II

Our second concern is whether the lower courts properly construed Florida law.

Appellant argues that the Florida Supreme Court, if confronted with the evidence before us today, would adopt the "minor deviation" rule. This rule would preclude liability insurance coverage where a driver materially deviates from the purpose and use for which permission was granted for the use of his vehicle. To support this position appellant...