Westfield Ins. Co. v. Grange Mutual Casualty Co.

• Decision Date: 17 November 1986
• Docket Number: 16-85-7,86-LW-2977
• Parties: WESTFIELD INSURANCE COMPANY, Plaintiff-Appellant, v. GRANGE MUTUAL CASUALTY COMPANY, et al., Defendants-Appellees.
• Court: Ohio Court of Appeals

WESTFIELD INSURANCE COMPANY Plaintiff-Appellant, v. GRANGE MUTUAL CASUALTY COMPANY, et al Defendants-Appellees.

No. 16-85-7.

86-LW-2977 (3rd)

Court of Appeals of Ohio, Third District Wyandot

November 17, 1986

Civil Appeal from Common Pleas Court.

Bryant & Vonberg Co., L.P.A., Thomas F. Bryant, Findlay, for appellant.

Paul E Hoeffel, Bucyrus, for appellee.

OPINION

GUERNSEY Presiding Judge.

This is an appeal by Westfield Insurance Company from a declaratory judgment of the Court of Common Pleas of Wyandot County, declaring that Westfield owes a defense to Pearl L. Dean, defendant, and that Grange Mutual Casualty Company owes no defense.

Defendant Pearl L. Dean, employed by F.J. Laubis and Sons, Inc. (hereinafter Laubis) was operating a truck owned by his employer on July 20, 1982, when he was involved in an accident. Both Dean and Laubis have been sued by several parties for claimed property and personal damages sustained as a result of the accident. A controversy arose concerning whether Westfield has a duty to defend Dean, under an insurance policy issued by it to Laubis, or whether Grange has a duty to defend Dean under an insurance policy it issued directly to Dean. Westfield sought that declaratory judgment be entered in its favor, declaring that:

"(a) The insurance policy issued by Plaintiff, Westfield Insurance Company, to F.J. Laubis and Sons, does not provide any coverage whatsoever to Defendant Pearl L. Dean, or to any other person or corporation for the said accident.

"(b) Defendant Grange Mutual Casualty Company, by the terms of its policy issued to Defendant Pearl L. Dean, is obligated to provide for his defense of and to assume responsibility for, to the extent of its policy limits, payment of damages, if any, caused to persons or property by Defendant Pearl L. Dean in the accident of June [sic] 20, 1982, in Wyandot County, Ohio.

"(c) Plaintiff is entitled to its costs of suit incurred herein, and such other and further relief as the Court deems just and proper."

The issues were submitted to the court upon the pleadings, depositions of Dean, Richard Laubis and Earl Laubis, shareholders of F.J. Laubis and Sons, Inc., exhibits and other stipulations, and briefs of counsel for Westfield and Grange. Defendant Dean was not represented by counsel in this action. On May 25, 1985, the trial court filed its judgment entry, wherein it found that the Grange policy specifically excluded the type of vehicle driven by Dean, that Grange therefore has no duty to defend, that the Westfield policy specifically covered the vehicle in question, and that Westfield therefore has a duty to defend. Westfield appeals from this judgment and assigns as error the following:

"THE TRIAL COURT ERRED, AS A MATTER OF LAW, BY ENTERING ITS DECLARATORY JUDGMENT THAT THE PLAINTIFF, WESTFIELD INSURANCE COMPANY, BY THE TERMS OF ITS INSURANCE POLICY NO. GLA 726400, OWES A DEFENSE TO DEFENDANT PEARL L. DEAN IN ANY CLAIM ARISING FROM HIS OPERATION, JULY 20, 1982, OF A TRUCK OWNED BY F.J. LAUBIS AND SONS, INC.

"Issue No. 1:

"Whether or not Pearl L. Dean's actual use of the F.J. Laubis vehicle for his personal social drinking visits to the homes of three of his friends and relatives, several miles from his permitted route of travel during a five-or-more hour long departure from a permitted business use of the vehicle was, as a matter of law, a complete departure or gross deviation from a permitted business use of the vehicle was, as a matter of law, a complete departure or gross deviation from the permitted use, excluding Dean from coverage as an additional insured by the terms of the Westfield policy issued to F.J. Laubis and Sons, Inc., and extending coverage to third persons if the actual use to which the vehicle is being put at the time of the accident is with the permission of the named insured.

"Issue No. 2:

"Whether or not the F.J. Laubis vehicle operated by Dean on July 20, 1982, is a non-owned automobile within the terms of the Grange Mutual Insurance [sic] Company policy issued to Pearl L. Dean, thus requiring Grange to provide a defense to Dean as a named insured under its policy."

A review of the record reveals the following facts:

Laubis operates a grain elevator, feed mill and sales office at its place of business in Hardin County, Ohio. Dean has been employed by Laubis for approximately ten years, as a laborer who occasionally makes deliveries for his employer using his employer's truck. On July 20, 1982, Dean was permitted to use a Laubis truck to make a delivery to a customer's property in Hancock County, Ohio. Dean invited his spouse to ride along with him, to be left at a friend's house and picked up later that day. The truck was ultimately to be returned to the Laubis business property. It is clear that Dean did not have express permission to bring his wife along, but it is disputed whether he had implied permission. Dean dropped his wife off, made his delivery, and then stopped at the homes of several friends for social drinking visits. Upon his return trip to get his wife, Dean was involved in an accident with Donald E. and Betty R. Pacey. Dean and Laubis have been sued by the Pacey's for personal and property damages.

As to this declaratory judgment action, Westfield and Grange are insurance companies licensed to engage in and do engage in the insurance business in the State of Ohio.

Prior to July 20, 1982, Westfield insured Laubis, under a policy entitled "Comprehensive Automobile Liability Insurance Coverage Part", the terms of which state in pertinent part:

"I.The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

bodily injury or

property damage

to which this insurance applies, * * * and the company shall have the right and duty to defend any suit against the insured seeking damages, even if the allegations of the suit are groundless, false, or fraudulent, * * *.

"II.Persons Insured.

Each of the following is an insured under this insurance to the extent set forth below:

(a) the named insured;

* * *

(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he was not operating) his other actual use thereof is within the scope of such permission, * * *."

Prior to July 20, 1982, Defendant Grange insured Pearl L. Dean, under a policy entitled "Family Combination Automobile Policy", the terms of which state in pertinent part:

"PART 1^LIABILITY

"Coverage A^Bodily Injury Liability and Property Damage Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

"A.bodily injury, sickness or disease, including death resulting therefrom, hereinafter called "bodily injury', sustained by any person;

"B.injury to or destruction of property, including loss of use thereof, hereinafter called "property damage';

arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, and the company shall defend any suit alleging such bodily injury or property damage which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; * * *."

"Persons Insured: The following are insureds under Part I:

* * *

(b) with respect to a non-owned automobile,

(1) the named insured, * * *."

"Definitions: Under Part I:

" * * *

"non-owned automobile" means an automobile or trailer not owned by or furnished for the regular use of either the named insured * * * ".

I.

Where a controversy exists between two insurers as to liability for investigation, defense, attorney fees, and judgment on behalf of an insured, declaratory judgment is a proper action. United States Fidelity and Guaranty Co. v. Nationwide Mut. Ins. Co. (1959), 110 Ohio App. 363. We turn, therefore, to a discussion of the merits of the assignments of error.

A.

Whether Westfield has a duty to defend Dean is determined by the scope of the allegations in the underlying complaint and by the terms of coverage in the insurance policy issued by Westfield.

In its latest pronouncement on this issue, the Supreme Court has stated:

"Where the insurer's duty to defend is not apparent from the pleadings in an action against the insured, but the allegations do state a claim which is potentially or arguably within the policy coverage, or there is some doubt as to whether a theory of recovery within the coverage has been pleaded, the insurer must accept the defense of the claim." Willoughby Hills v. Cincinnati Ins. Co. (1984), 9 Ohio St.3d 177, syllabus.

If, on the other hand, there is no set of facts which a plaintiff could prove which would bring a defendant within the coverage of the policy, then the insurer has no duty to defend. Knapp v. State Farm Mut. Auto. Ins. Co. (1982), 6 Ohio App.3d 53. Further, in determining the scope of the allegations, we are not limited to the pleadings themselves.

"The reason for this rule is that " * * * [u]nder the Federal Rules of Civil Procedure the dimensions of a lawsuit are not determined by the pleadings because the pleadings are not a rigid and unchangeable blueprint of the rights of the parties. * * * '

" * * *

"Like the federal system, Ohio has embraced notice pleadings through adoption of the Ohio Rules of Civil Procedure. See Civ.R. 8(A) and (E). No longer must a complaint set forth specific factual allegations. All that Civ.R. 8(A) requires is "[sic] * * * a short and plain statement of the claim showing that the pleader is entitled to relief, and (2) a demand for judgment for the relief to which he deems himself entitled. *...