Univ. Hosps. Health Sys. v. Total Technical Servs., Inc., 2010 Ohio 2606 (Ohio App. 6/10/2010), 93708.
| Decision Date | 10 June 2010 |
| Docket Number | No. 93708.,93708. |
| Citation | 2010 Ohio 2606 |
| Parties | University Hospitals Health System, Plaintiff-Appellant, v. Total Technical Services, Inc., et al., Defendants-Appellees. |
| Court | Ohio Court of Appeals |
Daran P. Kiefer, Shaun D. Byroads, Kreiner & Peters Co., L.P.A., P.O. Box 6599, Cleveland, Ohio 44101, Attorneys for Appellant.
Thomas J. Cabral, Gary L. Nicholson, Richard C.O. Rezie, Gallagher Sharp, Bulkley Building, 1501 Euclid Avenue, Cleveland, Ohio 44115-2108, For Federal Insurance Company, Kathleen M. Guarente, Park Center Plaza II, Suite 450, 6150 Oak Tree Boulevard, Independence, Ohio 44131, For Total Technical Services and Travelers Insurance Company Attorneys for Appellees.
Before: Blackmon, J., Rocco, P.J., and Stewart, J.
JOURNAL ENTRY AND OPINION
{¶ 1} Plaintiff-appellant QualChoice, Inc. ("QualChoice")1 appeals the trial court's granting summary judgment in favor of Federal Insurance Company ("Federal") and assigns the following two errors for our review:
{¶ 2} Having reviewed the record and requisite law, we affirm the trial court's judgment. The apposite facts follow.2
{¶ 3} Ronald Bonner was attending classes at Total Technical Services, Inc. ("Total Technical") when he injured his back. Mr. Bonner had health
insurance coverage with QualChoice through his wife's employer. QualChoice allegedly paid $7,463 in medical bills on behalf of Mr. Bonner regarding the injury.
{¶ 4} Total Technical leased the space from the owner of the property, 8700 BrookPark LLC ("BrookPark"), which had a general liability policy with Federal Insurance. QualChoice filed suit against Federal3 seeking reimbursement for the medical expenses it paid on Mr. Bonner's behalf under Federal's no fault medical payment clause. It did so, even though the injury was not caused by any defect on the property.
{¶ 5} Federal filed a motion for summary judgment arguing that it had no duty to reimburse QualChoice because Mr. Bonner was not a named insured under Federal's policy, nor was he an intended third party beneficiary. Federal also argued that the law does not allow QualChoice to sue the insurer before it has obtained judgment against the insured. QualChoice did not include BrookPark as a party.
{¶ 6} QualChoice opposed the motion arguing it was not required to sue BrookPark because the general liability policy that BrookPark had with Federal stated that it would make medical payments of the party injured on
the property regardless of fault. The trial court granted Federal's motion for summary judgment, without opinion.
{¶ 7} QualChoice's two assigned errors will be addressed together because they both concern whether Federal's general liability policy permits QualChoice to seek subrogation for medical payments it made on Mr. Bonner's behalf.
{¶ 8} We review an appeal from summary judgment under a de novo standard of review. Baiko v. Mays (2000), 140 Ohio App.3d 1, 746 N.E.2d 618, citing Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 506 N.E.2d 212; N.E. Ohio Apt. Assn. v. Cuyahoga Cty. Bd. of Commrs. (1997), 121 Ohio App.3d 188, 699 N.E.2d 534. Accordingly, we afford no deference to the trial court's decision and independently review the record to determine whether summary judgment is appropriate. Under Civ.R. 56, summary judgment is appropriate when: (1) no genuine issue as to any material fact exists, (2) the party moving for summary judgment is entitled to judgment as a matter of law, and (3) viewing the evidence most strongly in favor of the non-moving party, reasonable minds can reach only one conclusion that is adverse to the non-moving party. We conclude Federal was entitled to judgment as a matter of law.
{¶ 9} QualChoice contends that it can sue Federal directly without first obtaining a judgment against Federal's insured, BrookPark, because it is
seeking recovery for medical payments under Federal's "no fault" clause. Under the policy section regarding medical expense coverage, the policy states:
(Emphasis added.) Federal CGL Policy at 4.
{¶ 10} We cannot read this provision in isolation. A contract is to be read as a whole and the intent of each part gathered from a consideration of the whole. Foster Wheeler Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361, 1997-Ohio-202, 678 N.E.2d 519. If it is reasonable to do so, we must give effect to each provision of the contract. Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 452, at ¶16. Under the section entitled "Legal Action Against Us," the policy states:
"No person or organization has a right under this insurance to:
* join us as a party or otherwise bring us into a suit seeking damages from an insured; or
* sue us on this insurance unless all of the terms and conditions of this insurance have been fully complied with.
* trial in a civil proceeding; or
* arbitration or other alternative dispute resolution proceeding; but we will not be liable for damages that are not payable under the terms and conditions of this insurance or that are in excess of applicable Limits of Insurance." Federal CGL Policy at 22.
{¶ 11} Reading the policy in its entirety as we are required to do, it is clear that the policy's no fault coverage applies when a judgment against Federal's insured is obtained, or when the insured has entered into a settlement agreement. The no fault provision allows the insured to settle the case and have Federal pay medical expenses without regard to fault. This interpretation of the policy is consistent with Ohio insurance law. Ohio does not permit an injured party to sue an insurance company, of which it is not an insured, directly without first obtaining a judgment against the tortfeasor. Chitlik v. Allstate Ins. Co. (1973), 34 Ohio App.2d 193, 299 N.E.2d 295; R.C. 3929.06(B);4 R.C. 2721.02(B).5
{¶ 12} QualChoice, in spite of Ohio law and the language in Federal's policy, argues that this principle does not apply when seeking subrogation of medical payments under an insured's no fault medical payment provision. In so arguing, QualChoice refers to several cases, including this court's recent decision of QualChoice, Inc. v. Nationwide Ins. Co., Cuyahoga App. No. 91964, 2009-Ohio-1696. These cases are distinguishable from the instant case.
{¶ 13} All of the cases cited by QualChoice, except one, concerned no fault clauses within an auto insurance policy, not general liability insurance. In those cases, the person injured sued their own insurance company or fell under the policy definition of who was an insured. In QualChoice, Inc., we concluded there was an issue of fact whether the plaintiff had the owner's permission to use the vehicle, which was a requirement for meeting the policy's definition of who was an insured. We reversed the summary judgment and remanded the matter for further proceedings. Therefore, that case is not dispositive of the instant case.
{¶ 14} QualChoice, Inc. v. Nationwide Ins. Co., 11th Dist. No. 2007-l-172, 2008-Ohio-6979, also concerned an auto insurance policy. In that case,
QualChoice was able to proceed directly against the insurance company because QualChoice's insured was also an insured under Nationwide's insurance policy. In the instant case, Mr. Bonner is not an insured under Federal's policy.
{¶ 15} In Long v. Lindsey (June 14, 2001), 10th Dist. No. 00AP-1253, Long was a passenger in Lindsey's vehicle, which was involved in an accident with an uninsured motorist. Even though Lindsey was not at fault, Long was able to sue Lindsey's uninsured motorist carrier directly under her no fault medical reimbursement clause, because as a passenger she qualified as an insured under the policy.
{¶ 16} In Thatcher v. Sowards, 4th Dist. No. 98CA2613, 2000-Ohio-1979, the medical insurance provider for a passenger in a car that was involved in an accident, was able to recover the passenger's medical expenses from the driver's auto insurance policy. In that case, "insured" for purposes of reimbursement of medical expenses was defined as "any person occupying [the] covered auto."
{¶ 17} In the last case, QualChoice, Inc. v. Brotherhood Ins. Co., 5th Dist. No. 06CA00020, 2007-Ohio-226, a volunteer worker was injured on the premises of a church. The church had general liability insurance with Brotherhood Insurance. The court in that case held that the issue...
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