Ritenour v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 12 April 2006
• Docket Number: No. 5:05 CV 1478.,5:05 CV 1478.
• Citation: 426 F.Supp.2d 681
• Parties: Brad L. RITENOUR, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

426 F.Supp.2d 681

Brad L. RITENOUR, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

No. 5:05 CV 1478.

United States District Court, N.D. Ohio, Eastern Division.

April 12, 2006.

Harry C.E. Tolhurst, III, J. Kevin Lundholm, Miller & Kyler, New Philadelphia, OH, for Plaintiff.

James R. Gallagher, Gallagher Gams Pryor Tallan & Littrell, Columbus, OH, for Defendant.

MEMORANDUM OPINION AND ORDER

GALLAS, United States Magistrate Judge.

Plaintiff Brad L. Ritenour's lawsuit was tiled in the Court of Common Pleas for Tuscarawas County, Ohio and removed by defendant State Farm Mutual Automobile Insurance Co. (State Farm) to federal court on the basis of diversity jurisdiction. Although the complaint is premised on declaratory judgment, there is a demand for compensatory and punitive damages and based on the stipulation of fact (Docket No. 17), there clearly is an actual case and controversy over the denial of medical payment insurance coverage in the amount of $15,902.00 in the first count of the complaint and "bad faith claim" in processing the claim of insured in the second count. See Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 452 N.E.2d 1315 (1983) (failure to pay medical expenses in violation and breach of terms of policy).

At the case management conference the parties agreed that the key issue is whether State Farm's denial of medical payment coverage stands in breach of contract, and the court granted leave for Mr. Ritenour to move for partial summary judgment on the first count of the complaint with stipulated facts, and for State Farm to respond.

According to the factual stipulation, Mr. Ritenour purchased liability and medical insurance coverage through an agent of defendant State Farm in Tuscarawas County, Ohio to insure a 2001 Ford F150 pickup truck, which was garaged in Ohio. On March 31, 2003, Mr. Ritenour while walking across an intersection in Marietta, Ohio, was struck by a motor vehicle driven by. Michael Hercher. Mr. Ritenour sustained physical injuries and demanded medical payment coverage under the medical payments provision of the policy in question for medical bills in the amount of $15,902.00 arising from the pedestrian-motor vehicle collision.

The medical payment provisions in the policy State Farm issued to Mr. Ritenour and designated as "Coverage C" provides for coverage of necessary medical expenses including surgical, x-ray, dental, ambulance, hospital, professional, nursing and funeral services incurred for bodily injury. There is no dispute that Mr. Ritenour did suffer bodily injury as a result of the collision and the policy provides coverage extends to medical expenses for bodily injury sustained by, "the first person named in the declarations" (emphasis in original). There is no dispute that Mr. Ritenour is that person. Coverage also extends to bodily injury sustained, "through being struck as a pedestrian by a motor vehicle or trailer." (See § II — Medical Payments — Coverage C, pg. 9). Thus up to this point there is no dispute that Mr. Ritenour met the requirements of Coverage C for medical payments. However, excluded from this coverage are "medical expenses for bodily injury: . . . (b) TO THE EXTENT WORKERS' COMPENSATION BENEFITS ARE REQUIRED TO BE PAYABLE[.]"

The parties stipulate that Mr. Ritenour worked for a complying employer under Ohio's Workers' Compensation Act, and that Mr. Ritenour did not file a workers' compensation claim within the two-year period of Ohio Revised Code § 4123.84(A)(1). In fact, Mr. Ritenour allowed more than two years to pass before initiating this lawsuit against State Farm. The parties have implicitly agreed that Ohio law applies and this is certainly the natural consequence of any conflict in law analysis although State Farm is domiciled in the State of Illinois. The insurance policy was sold to an Ohio resident through an agency situated in New Philadelphia, Ohio and moreover the policy itself is described as "Ohio Policy Form 9835A." The parties have asked the court to presume that Mr. Ritenour was injured while in the course and scope of his employment. Omitted, though, is any stipulation that Mr. Ritenour's injuries were compensable under the state Workers' Compensation Act. The court notes that injuries eligible for workers' compensation coverage may only be compensated under Chapter 4123 of the Ohio Revised Code and must occur "in the course of employment." See Fisher v. Mayfield, 49 Ohio St.3d 275, 277, 551 N.E.2d 1271, 1274 (1990); Ruckman v. Cubby Drilling, Inc., 81 Ohio St.3d 117, 120, 689 N.E.2d 917, 921 (1998); MTD Products, Inc. v. Robatin, 61 Ohio St.3d 66, 68, 572 N.E.2d 661, 663-64 (1991) (injuries must be causally related to the activities, conditions and environment of employment). Depending on the particular employment circumstances, however, injuries suffered by a pedestrian-employee as a consequence of being struck by a motor vehicle, may not be entitled to workers' compensation benefits. See Powers v. Frank Z Chevrolet, 100 Ohio App.3d 718, 721-22, 654 N.E.2d 1053 (2nd Dist.1995) (no workers' compensation coverage); Castaneda v. AE Outfitters Retail Co., 2004 WL 2348147 (Ohio App. 9 Dist. 2004) (same); Selby v. Industrial Commission of Ohio, 36 Ohio L.Abs. 74, 42 N.E.2d 669 (2nd Dist.1942) (same); and see 80 ALR 2d 126 "Workmen's Compensation: Street Risk Incurred in Course of Employment." (illustrating differing views under the various state workers' compensation laws).

The parties, however, do not wish to he distracted by whether Mr. Ritenour's injuries would have been compensable under Ohio's workers' compensation scheme. Rather, they insist on a decision in the abstract based purely on the written clauses of the medical payment insurance contract. The court finds that the policy terms can be interpreted to ascertain their meaning without grounding them to the particular situation presented in Mr. Ritenour's circumstances, or whether this incident involving Mr. Ritenour's crossing the street would be deemed "in the course of employment" for purposes of Ohio's Workers' Compensation Act.

Ohio jurisprudence requires that insurance contracts be construed in accordance with the same rules as are other written contracts. See Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 597 N.E.2d 1096 (1992); Rhoades v. Equitable Life Assur. Soc. of U.S., 54 Ohio St.2d 45, 374 N.E.2d 643 (1978). Moreover, as outlined in the Sixth Circuit:

When the "terms of an insurance policy are clear and unambiguous," Ohio law requires a court to "appl[y] [them] to the facts without engaging in any construction." Ledyard v. Auto-Owners Mut. ins. Co., 137 Ohio App.3d 501, 739 N.E.2d 1, 3 (2000) (citation and quotation omitted). Conversely, when the insurer has drafted the contract and the "provisions of a contract of insurance are reasonably susceptible of more than one interpretation, a court must `construe[ ] [the terms] strictly against the insurer and liberally in favor of the insured.' " King v. Nationwide Ins. Co., 35 Ohio St.3d 208, 519 N.E.2d 1380, 1383 (1988).

Toledo-Lucas County Port Auth. v. Axa Marine & Aviation Ins. (UK), Ltd., 368 F.3d 524, 530 (6th Cir.2004); and see Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 220, 797 N.E.2d 1256 (2003) ("[W]here the written contract is standardized and between parties of unequal bargaining power, and ambiguity in the writing will be interpreted strictly against the drafter's . . .") Conversely, "this court cannot make a new contract for the parties where they themselves have employed express and unambiguous terms." See Kerry v. State Farm Mutual Auto. Ins. Co., 60 Ohio App.2d 8, 10, 14 O.O.3d 7, 8, 395 N.E.2d 375 (3rd Dist.1978). The intent of the parties is presumed to be reflected in the language used in the policy. Westfield, 100 Ohio St.3d at 219, 797 N.E.2d 1256; Kelly v. Med Life Ins. Co., 31 Ohio St.3d 130, 509 N.E.2d 411 (1987) (syllabus ¶ 1).

Mr. Ritenour attempts to read ambiguity into the very clear language of the instrument because in State Farm's letter denying benefits it explained:

The medical payments coverage on your personal auto policy has an exclusion for coverage when workers' compensation benefits apply. (Exhibit B to stipulation).

The language of the medical payments under "Coverage C" does not use the broad term "apply." The exclusion occurs only when workers' compensation benefits are "required to be payable." State Farm attempts to evade the consequences of this language by referring to the fact that medical payment coverage is simply a matter of contract between the insurer and insured,¹ and that neither public policy nor any statute is violated by an insurance contract clause excluding medical payments for workers' compensation covered injuries because the clause, "merely allows for setoff on medical expense payments to insure that there is no double recovery."²

State Farm further analogizes this case to the facts in Kerry, supra, where the policy exclusion stated in clear language that "Coverage C" benefits for bodily injury were benefits that were "in whole or in part either payable or required to be provided under any workmen's compensation law" were excluded. This language stands in stark contrast to the "required to be payable" language actually used in the policy in question. State Farm also believes that this court should follow the decision in Indelicato v. Capers, 1988 WL 54701 (E.D.La. May 24, 1988), where identical language, excluding benefits required to be payable, was used. However, in Indelicato, the workers' compensation benefits were in fact paid, which mooted any issue over whether such benefits were "required to be payable."

Mr. Ritenour points to three state court decisions finding ambiguity in identical "required to be payable" language of exclusion. See Walters v. State Farm Mut. Auto. Ins. Co., 793 S.W.2d 217 (Mo.App. S.D.1990); State Farm Mut. Auto. Ins. Co. v. Ley, 844...