Scott-Pontzer v. Liberty Mut. Fire Ins. Co., SCOTT-PONTZE

CourtOhio Supreme Court
Writing for the CourtDOUGLAS; MOYER, C.J., and COOK; LUNDBERG STRATTON; COOK; MOYER; LUNDBERG STRATTON
Citation85 Ohio St.3d 660,710 N.E.2d 1116
Partiesppellant, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY et al., Appellees.
Decision Date23 June 1999
Docket NumberNo. 98-442,A,SCOTT-PONTZE

Page 660

85 Ohio St.3d 660
710 N.E.2d 1116
SCOTT-PONTZER, Appellant,
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY et al., Appellees.
No. 98-442.
Supreme Court of Ohio.
Submitted Dec. 16, 1998.
Decided June 23, 1999.

[710 N.E.2d 1117] On July 10, 1994, Christopher T. Pontzer was driving an automobile owned by his wife Kathryn Scott-Pontzer, appellant. Pontzer was killed when the vehicle

Page 661

he was driving collided with a motor vehicle driven by Troy W. Taylor. The collision was caused by the negligence of Taylor. Taylor was insured under a policy of automobile liability insurance with limits of $100,000 per person and $300,000 per accident.

Before his death, Pontzer was an employee of Superior Dairy, Inc. At the time of the accident, Superior Dairy was insured under a policy of commercial automobile liability insurance with Liberty Mutual Fire Insurance Company ("Liberty Fire"). Superior Dairy's policy of insurance with Liberty Fire contained a provision for underinsured motorist coverage. In addition to the liability policy provided by Liberty Fire, Superior Dairy also had in effect at the time of Pontzer's death an "umbrella/excess" insurance policy with Liberty Mutual Insurance Company ("Liberty Mutual").

On July 9, 1996, appellant brought, in the Court of Common Pleas of Stark County, an action as surviving spouse and executor of her husband's estate against Liberty Fire and Liberty Mutual. In the complaint appellant alleged that because her husband was an employee of Superior Dairy, she was entitled to the underinsured motorist benefits under Superior Dairy's automobile liability policy with Liberty Fire. Appellant also contended that she was entitled to any benefits accruing under Superior Dairy's umbrella policy with Liberty Mutual. On April 16, 1997, the trial court granted summary judgment in favor of Liberty Fire and Liberty Mutual. The trial court determined that, according to the policy language of the Liberty Fire policy, Pontzer was not a named insured and was not operating a "covered" automobile. The trial court further found that, for purposes of the Liberty Fire policy, no "insured" sustained "bodily injuries." Thus, the trial court concluded that appellant was not entitled to underinsured motorist benefits from Superior Dairy's commercial liability policy with Liberty Fire. The trial court also concluded that appellant's husband was not an executive officer, director, stockholder, or an employee acting within the scope of his employment, and thus he was not an insured according to the terms of Superior Dairy's umbrella policy. The trial court therefore held that appellant did not qualify for benefits under Superior Dairy's umbrella/excess insurance policy issued through Liberty Mutual.

On appeal, the court of appeals affirmed the judgment of the trial court, but based its decision on different reasons than those of the trial court. Specifically, the court of appeals determined that the policies in question were "ambiguous as to the 'insureds' under the underinsured motorist coverages." 1 The court of

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appeals concluded that, pursuant to our decision in King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208, 519 N.E.2d 1380, Pontzer, as an employee of Superior Dairy, was an insured under the policies issued by Liberty Fire and Liberty Mutual for purposes of underinsured motorist coverage. The court of appeals, however, held that underinsured motorist coverage under a [710 N.E.2d 1118] corporate policy is available only to those employees injured while acting within the scope of their employment. Thus, the court of appeals concluded that since appellant's husband was not within the scope of his employment when the accident occurred, underinsured motorist coverage was not available to appellant under the policies issued to Superior Dairy.

This matter is now before this court pursuant to the allowance of a discretionary appeal.

John S. Coury, Canton, for appellant.

Jan A. Saurman Law Offices and John V. Rasmussen, Lakewood, for appellees.

Allen Schulman, Jr., Canton, and Christopher J. Van Blargan, Eastlake, urging reversal for amicus curiae, Ohio Academy of Trial Lawyers.

DOUGLAS, Justice.

The parties present us with three issues for our determination. The first issue is whether Pontzer, as an employee of Superior Dairy, was an "insured," for purposes of underinsured motorist coverage, under the policies issued to Superior Dairy by Liberty Fire and Liberty Mutual. If he was, then the second issue is whether Pontzer, for coverage to be afforded, would have had to be in the course of his employment at the time of the accident. The third question, which pertains only to the Liberty Mutual policy, is whether, after underinsured motorist coverage is inserted into a policy by operation of law, the exclusions in the policy that have been written in so as to apply to the coverage for liability also pertain to the underinsured coverage.

If we find Pontzer was not an insured under the policies, then our inquiry is at an end. If we find that he was an insured, then we must proceed to the question of "scope of employment." If we find that for Pontzer to be covered he must have been in the scope of his employment, again our inquiry is at an end because it is stipulated that he was not. If, however, we find that Pontzer was an insured and that coverage ensued even though he was not in the course of his employment

Page 663

at the time of the occurrence of the accident, then our inquiry as to coverage under the Liberty Fire policy is ended (there would be coverage) and we then must proceed to whether Pontzer was also covered under the Liberty Mutual policy given that there is, in that policy, a "scope of employment" requirement.

In discussing the foregoing, hereinafter "Liberty Fire" and "Liberty Mutual" will also be referred to jointly as "appellees," since they submitted a joint brief to this court.

I. Liberty Fire Policy

In regard to the commercial automobile liability policy issued through Liberty Fire, appellees argue that the court of appeals erred in concluding that Pontzer was an insured. Appellees contend that the Liberty Fire policy unambiguously shows that Superior Dairy was the only named insured, that Pontzer could not be considered an insured under any language in the policy, and that, therefore, appellant cannot claim entitlement to underinsured motorist benefits. We disagree.

Regrettably, as so many of these types of cases do, this issue centers on construing certain words and phrases contained within the Liberty Fire policy. The declarations page of the Liberty Fire policy names Superior Dairy, Inc. as the named insured. The business auto coverage form of that policy states that "[t]hroughout this policy the words you and your refer to the [n]amed [i]nsured shown in the [d]eclarations." The policy also contains an Ohio uninsured motorist coverage form that defines an "insured" for purposes of underinsured motorist coverage as follows:

"B. Who Is An Insured

"1. You.

"2. If you are an individual, any family member.

"3. Anyone else occupying a covered auto or a temporary substitute for a covered auto. The covered auto must be out of service because of its breakdown, repair, servicing, loss or destruction.

[710 N.E.2d 1119] "4. Anyone for damages he or she is entitled to recover because of bodily injury sustained by another insured."

It is well settled that an insurance policy is a contract and that the relationship between the insured and the insurer is purely contractual in nature. Nationwide Mut. Ins. Co. v. Marsh (1984), 15 Ohio St.3d 107, 109, 15 OBR 261, 262, 472 N.E.2d 1061, 1062. Appellees contend that the above-quoted policy language indicates the intent of the parties to the insurance contract to provide that Superior Dairy is the only named insured. According to appellees, the inclusion

Page 664

of the phrase "[i]f you are an individual, any family member" removes any doubt that "you" refers to Superior Dairy and, thus, that Superior Dairy is the sole named insured. In other words, appellees contend that by the insertion of this conditional language a distinction is made between "you" and an "individual," thereby clearly evincing the intent of the parties that the corporate entity, Superior Dairy, be the sole named insured. While that is one interpretation of the policy, it is not the only interpretation.

In King, 35 Ohio St.3d 208, 519 N.E.2d 1380, syllabus, Chief Justice Moyer, speaking for the court, said that "[w]here 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." (Citations omitted.) The language of the Liberty Fire policy under consideration here is, in our view, subject to various interpretations.

Contrary to appellees' contentions, the policy language of the Liberty Fire policy can be interpreted to include company employees. Assuming arguendo that "you" does refer solely to Superior Dairy, this does not foreclose the inclusion of Pontzer as an insured under the policy. We note again, as we have often in the past, that uninsured motorist coverage, mandated by law pursuant to R.C. 3937.18, was designed by the General Assembly to protect persons, not vehicles. Martin v. Midwestern Group Ins. Co. (1994), 70 Ohio St.3d 478, 639 N.E.2d 438, paragraph one of the syllabus. Since R.C. 3937.18 mandates underinsured as well as uninsured motorist coverage, obviously the same rationale applies to underinsured motorist coverage. It would be contrary to previous dictates of this court for us now to interpret the policy language at issue here as providing...

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661 practice notes
  • Dolly v. Old Republic Ins. Co., No. 5:00CV1685.
    • United States
    • U.S. District Court — Northern District of Ohio
    • May 8, 2002
    ...at issue here. He operated out of the Con-Way terminal in Alliance, Ohio. 2. Under Scott-Pontzer v. Liberty Mutual Fire and Ins. Co., 85 Ohio St.3d 660, 710 N.E.2d 1116 (1999), where an employer is the actual named insured, employees can also be considered "persons 3. The parties have stipu......
  • Westfield Ins. Co. v. Galatis, No. 2002-0932.
    • United States
    • United States State Supreme Court of Ohio
    • November 5, 2003
    ...unrelated to the insured corporation. This examination results in the limitation of Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1999), 85 Ohio St.3d 660, 710 N.E.2d 1116, by restricting the application of uninsured and underinsured motorist coverage issued to a corporation to employees onl......
  • Johnston v. Johnston, No. 00 CV 001494.
    • United States
    • Court of Common Pleas of Ohio
    • October 25, 2001
    ...Linko v. Indemn. Ins. Co. of N. Am. (2000), 90 Ohio St.3d 445, 739 N.E.2d 338. 55. Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1999), 85 Ohio St.3d 660, 710 N.E.2d 56. Ezawa v. Yasuda Fire & Marine Ins. Co. of Am. (1999), 86 Ohio St.3d 557, 715 N.E.2d 1142. 57. State Farm Auto. Ins. Co. v.......
  • Hillabrand v. American Family Mut. Ins., No. S-05-049.
    • United States
    • Supreme Court of Nebraska
    • May 12, 2006
    ...Robert relies on Hawkeye-Sec. Ins. v. Lambrecht & Sons, 852 P.2d 1317 (Colo.App.1993), and Scott-Pontzer v. Liberty Mut. Fire, 85 Ohio St.3d 660, 710 N.E.2d 1116 In Hawkeye-Sec. Ins., the policy at issue named a corporation as the insured. The spouse of the corporation's owner was injured w......
  • Request a trial to view additional results
661 cases
  • Dolly v. Old Republic Ins. Co., No. 5:00CV1685.
    • United States
    • U.S. District Court — Northern District of Ohio
    • May 8, 2002
    ...at issue here. He operated out of the Con-Way terminal in Alliance, Ohio. 2. Under Scott-Pontzer v. Liberty Mutual Fire and Ins. Co., 85 Ohio St.3d 660, 710 N.E.2d 1116 (1999), where an employer is the actual named insured, employees can also be considered "persons 3. The parties have stipu......
  • Westfield Ins. Co. v. Galatis, No. 2002-0932.
    • United States
    • United States State Supreme Court of Ohio
    • November 5, 2003
    ...unrelated to the insured corporation. This examination results in the limitation of Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1999), 85 Ohio St.3d 660, 710 N.E.2d 1116, by restricting the application of uninsured and underinsured motorist coverage issued to a corporation to employees onl......
  • Johnston v. Johnston, No. 00 CV 001494.
    • United States
    • Court of Common Pleas of Ohio
    • October 25, 2001
    ...Linko v. Indemn. Ins. Co. of N. Am. (2000), 90 Ohio St.3d 445, 739 N.E.2d 338. 55. Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1999), 85 Ohio St.3d 660, 710 N.E.2d 56. Ezawa v. Yasuda Fire & Marine Ins. Co. of Am. (1999), 86 Ohio St.3d 557, 715 N.E.2d 1142. 57. State Farm Auto. Ins. Co. v.......
  • Hillabrand v. American Family Mut. Ins., No. S-05-049.
    • United States
    • Supreme Court of Nebraska
    • May 12, 2006
    ...Robert relies on Hawkeye-Sec. Ins. v. Lambrecht & Sons, 852 P.2d 1317 (Colo.App.1993), and Scott-Pontzer v. Liberty Mut. Fire, 85 Ohio St.3d 660, 710 N.E.2d 1116 In Hawkeye-Sec. Ins., the policy at issue named a corporation as the insured. The spouse of the corporation's owner was injured w......
  • Request a trial to view additional results

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