White v. Insurance Co. of State of Pennsylvania, No. 5:02 CV 0999.

• Decision Date: 05 August 2003
• Docket Number: No. 5:02 CV 0999.
• Citation: 282 F.Supp.2d 618
• Parties: Terry WHITE, et al., Plaintiff(s), v. The INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Defendant(s).
• Court: U.S. District Court — Northern District of Ohio

Page 618

282 F.Supp.2d 618

Terry WHITE, et al., Plaintiff(s), v. The INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Defendant(s).

No. 5:02 CV 0999.

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

August 5, 2003.

Robert E. Kerper, Jr., Akron, OH, for Plaintiffs.

Devin J. Oddo, Steven G. Janik, Kathleen A. Nitschke, Matthew J. Grimm, Michael J. Callow, Janik & Dorman, LLP, Kathryn A. Kerka, Rodgers And Co., L.P.A., Cleveland, OH, for Defendant.

MEMORANDUM OPINION

DOWD, District Judge.

Before the Court are cross-motions for summary judgment with supporting documentation. (Doc. Nos. 31, 34).¹ On May 27, 2003, the Court heard oral arguments on the dispositive motions² and then asked counsel to file supplemental briefs regarding the potential applicability of the Motor Carrier Act, an issue which first arose during the oral arguments. These supplemental briefs have been filed (Doc. No. 57, with Nos. 59-60; Doc. Nos. 62, 67, 68, and 69). The defendant has also filed a motion to stay all proceedings (Doc. No. 58, supported by No. 60), which plaintiffs have opposed (Doc. No. 61).

For the reasons set forth below, plaintiffs' motion for summary judgment (Doc. No. 34) is denied and defendant's motion for summary judgment (Doc. No. 31) is granted. Defendant's motion to stay (Doc. No. 58) is denied.

I. BACKGROUND

On May 29, 2002, defendant, The Insurance Company of the State of Pennsylvania (ISOP), removed the above-captioned action from the Court of Common Pleas of Summit County, Ohio on the basis of diversity of citizenship.³ The complaint, brought by Terry White and Melissa White on behalf of themselves and their three minor children, seeks a declaratory judgment with respect to the various parties' rights under certain insurance policies. The relief sought is based upon essentially undisputed facts. Resolution of the instant motions requires conclusions of law regarding the proper interpretation of the relevant insurance policy or policies in light of Ohio law.

On or about August 6, 1997, plaintiff Terry White was employed by Preston Trucking ("Preston") in Brecksville, Ohio. On that day, while operating a tow motor in the course and scope of his employment, Terry White was involved in an accident with another company employee operating a tractor-trailer in the course and scope of his employment.⁴ Terry White suffered severe, disabling, and permanent physical injuries and incurred significant expenses. His wife and children bring separate claims for loss of consortium.

The plaintiffs seek uninsured/underinsured motorist (UM/UIM) coverage under a commercial automobile liability policy of insurance issued to Preston by ISOP.⁵ They seek recovery of the policy limits, asserting that there was no valid rejection of UM/UIM coverage as required by Ohio law. In the alternative and for the same reason, plaintiffs claim a right to UM/UIM coverage under a motor carrier's excess indemnity policy which was also effective at the relevant time. In their supplemental brief, plaintiffs advance the argument that, because of the MCS-90 Endorsement mandated by the Motor Carrier Act of 1980, which is part of the excess policy, that layer of insurance is, in fact, a "motor vehicle liability policy" subject to the UM/ UIM requirements.

ISOP argues that Preston is self-insured, in the practical sense, and not subject to the offer and rejection requirements of O.R.C. § 3937.18 with respect to the UM/UIM coverage. It asserts that the two policies are really one and, for that reason, the "excess" layer escapes application of Dolly v. Old Republic Ins. Co., 200 F.Supp.2d 823 (N.D.Ohio 2002).⁶ In the alternative, ISOP argues that only Terry White, and none of the other plaintiffs, is an "insured" under the relevant policies. In response to plaintiffs' supplemental argument, ISOP asserts that the MCS-90 Endorsement does not convert the excess indemnity policy into a motor vehicle liability policy that must comply with § 3937.18.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56. When considering a motion for summary judgment, "the inferences to be drawn from the underlying facts contained in [affidavits, pleadings, depositions, answers to interrogatories, and admissions] must be viewed in the light most favorable to the party opposing the motion." U.S. v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). However, the adverse party "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The Rule requires the nonmoving party who has the burden of proof at trial to oppose a proper summary judgment motion "by any of the kinds of evidentiary material listed in Rule 56(c), except the mere pleadings themselves[.]" Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). General averments or conclusory allegations of an affidavit do not create specific fact disputes for summary judgment purposes. See Lujan v. National Wildlife Federation, 497 U.S. 871, 888-89, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Nor may a party "create a factual issue by filing an affidavit, after a motion for summary judgment has been made, which contradicts . . . earlier deposition testimony." Reid v. Sears Roebuck & Co., 790 F.2d 453, 460 (6th Cir.1986) (citing Biechele v. Cedar Point, Inc., 747 F.2d 209, 215 (6th Cir.1984)). Further, "`[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.'" Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir.1989) (quoting Anderson v. Liberty Lobby, 477 U.S. at 252, 106 S.Ct. 2505).

In sum, "[t]he inquiry performed is the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, 477 U.S. at 250, 106 S.Ct. 2505. Put another way, this Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505. See also Wexler v. White's Fine Furniture, Inc., 317 F.3d 564, 578 (6th Cir.2003) ("[t]he conflicting proof and the inferences that can be drawn therefrom raise genuine issues of material fact that preclude the grant of summary judgment").

III. DISCUSSION

A. The Parties' Arguments

Dispositive of this entire case is the interpretation of what ISOP refers to as "The Preston Risk Management Program." ISOP describes the Program as follows:

The Preston Risk Management Program ("Program") is comprised of Excess Indemnity Policy No. TXT 2712212 (Ex. 1), having liability limits of $3 million excess of a $2 million SIR [Self-Insured Retention], the automobile liability coverage subpart ("CA Subpart") (Ex. 2) in which Preston manifested its intent to reject UM/UIM coverage in those states where permitted, and the corresponding Self-Insured Retention Agreement ("SIR") (Ex. 3).^{2 2} Endorsement # 13 of the Excess Indemnity Policy No. TXT 2712212 incorporates the SIR in its entirety to the CA Subpart. (Ex. 4).

The CA Subpart was issued solely to manifest Preston's intent to reject UM/UIM coverage in states where such rejection is permitted, including Ohio. Preston intended to reject UM/UIM coverage in the State of Ohio under the Preston Policy and manifested this intent by having Preston representative, Donald Hansen, signed [sic] ISO Form No. 62582, titled "Rejection of Uninsured Motorist/Underinsured Motorist Coverage for Selection of Lower Limits of Liability (Ohio)" ("Rejection Form") (Ex. 5). See Affidavit of Cathy Wilson, Risk Manager for Yellow Corporation and Underwriter Hodges Bradberry [footnote 3 omitted] (Ex. 6).

(ISOP's Motion at 3; footnote 2 in original).⁷ In other words, ISOP's position is that both policies must be read together as one "self-insurance" policy which, under this Court's and Ohio courts' precedent, is not subject to the offer/rejection requirements of § 3937.18. ISOP argues that "[u]nder [the] Program, ISOP `fronts' motor vehicle liability protection for Preston and, in turn, Preston reimburses ISOP for up to One Hundred Percent (100%) of its SIR for any losses paid under the Policy as prescribed by the [Self-Insured Retention] Agreement." ISOP's Motion at 5.

Plaintiffs assert that there are two policies, rather than the one "Program" advanced by ISOP, namely, a primary motor vehicle liability policy (TP2713829RA) and an excess liability policy (TXT2712212). Terry White argues that, under the primary policy, he is "entitled to uninsured motorist coverage equal to the policy limits, whatever they are" (Cross-Motion at 7), because Preston's alleged "rejection" of UM/UIM coverage, which is undated (see Doc. No. 32, Exh. 5), does not meet the requirements for rejection of coverage set forth in Linko v. Indemnity Ins. Co. of N. America, 90 Ohio St.3d 445, 739 N.E.2d 338 (2000). Plaintiffs argue that UM/UIM coverage equal to the liability coverage is, therefore, impressed upon the primary policy by operation of law. They further argue, relying on Dolly, supra, that they are similarly entitled to UM/UIM coverage by operation of law under the excess policy in the amount of the $1 million for which ISOP is responsible (beyond the $2 million self-retained "deductible"). To buttress this last argument, plaintiffs argue that the MCS-90 Endorsement attached to the excess policy converts that indemnity policy into a motor vehicle...