Carolina Cas. Ins. Co. v. Canal Ins. Co.

940 F.Supp.2d 753

CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff,

v.CANAL INSURANCE COMPANY, OHIO, et al., Defendants.

Case No. 2:11–cv–736.

United States District Court,

S.D. Ohio,

Eastern Division.

April 18, 2013.

Geoffrey A. Belzer, Wilson, Elser, Moskowitz, Edleman & Dicker LLP, Chicago, IL, for Plaintiff.

Chris Constantine Tsitouris, Columbus, OH, for Defendants.

OPINION AND ORDER

EDMUND A. SARGUS, JR., District Judge.

This matter is before the Court on Defendant's Motion for Summary Judgment (Doc. No. 30) and Plaintiff's Motion for Summary Judgment (Doc. No. 32). For the reasons that follow, the Court GRANTS Defendant's Motion and DENIES Plaintiff's Motion.

I.

On December 16, 2007, Jama Farah was driving a semi tractor-trailer on Interstate 78 in New Jersey. It was snowing and Farah's truck jackknifed, leaving it disabled across multiple lanes on the highway. Following that initial accident, a bus carrying passengers collided with the jackknifed tractor-trailer and several passengers were injured. Two personal injury lawsuits arising out of the accident were filed in New York. The actions named as defendants a travel company, Forward Air, Inc. Forward Air Corporation, Jama Farah and Give Me The Freight, LLC d/b/a GTF (“GTF”). GTF added Green Line Trucking, Inc. (“Green Line”) as a third party defendant in each of the cases.

At the time of the accident, Farah was transporting mail from Alabama to New Jersey. GTF hired Farah to haul the mail. Farah was driving a 2001 Freightliner semi tractor-trailer, Vehicle Identification Number of IFUJAHCG31LF98685. Farah owns a half interest in the tractor-trailer and Yussef Mohamed owns the other half. Mohamed is also the owner of Green Line, a Columbus, Ohio business.

At the time GTF hired Farah for the mail run, Farah asked GTF if it could provide insurance coverage to him. GTF suggested that he contact Green Line, who had a policy with Defendant Canal Insurance Company (“Canal”), and inquire whether it could provide the insurance. Farah contacted Green Line and asked if he could be added to its commercial trucking insurance policy. Green Line submitted an application to Canal requesting to add Farah's and Mohamed's tractor-trailer to Green Line's policy with Canal, Insurance Policy No. PIA02578101 (“Green Line Policy”). (Green Line Policy; Docs. No. 32–5, 32–6.) Green Line is the named insured on the Green Line Policy and Mohamed is the only listed covered driver on the Policy. Farah paid a premium of between $800 and $1,000 to Green Line for the coverage. Canal added the vehicle as a “covered auto” under Green Line's policy, and provided an insurance card to Farah.

After the accident, Farah sought coverage under the Green Line Policy. On August 14, 2009, March 4, 2010, July 8, 2010, and December 13, 2010, GTF's counsel sent correspondence to Canal indicating that it was GTF's position that the accident should be covered under the Green Line Policy and that Canal was responsible to defend and indemnify Farah and Green Line in the New York lawsuits. (GTF Correspondence; Doc. No. 32–7 at 3–4, 13–14, 17, 24–25.)

On April 26, 2010, and December 28, 2010, Canal responded to GTF, denying coverage based on its position that Farah was not insured at the time of the accident because he was not a permissive user underthe Green Line Policy while employed by GTF. Specifically, Canal asserted that its insured, Green Line, was not a party to the personal injury actions in New York, that Farah was not working for Green Line at the time of the accident, that Green Line did not provide permission for Farah to operate the vehicle during his employment with GTF, that neither Farah nor GTF were listed as additional insured under the Canal Policy, that neither were insured at the time of the accident because they did not meet the Policy's definition of “an Insured” in either Section II(A)(1)(a) or Section II(A)(1)(b) of the Green Line Policy, and that even if they were “insured” they were excepted from coverage under subsection (1) of the exceptions found in Section II(A). (Canal Denial Letters; Doc. No. 32–7 at 15, 28–29.)

At the time of Farah's accident, GTF was insured by Plaintiff Carolina Casualty Insurance Company (“Carolina”). Carolina has undertaken the defense of Farah and GTF in the New York actions pursuant to an MCS–90 Endorsement on the insurance policy issued by Carolina to GTF (“GTF Policy”).

On August 12, 2011, Carolina brought this declaratory judgment action, pursuant to its subrogation and assignment rights, against Canal. Carolina requests a declaration that the Green Line Policy provides coverage for Farah and GTF in the New York actions; that the Green Line Policy requires Canal to defend and indemnify Farah and GTF; that the Green Line Policy provides primary coverage over Farah's tractor-trailer; that Carolina is released from any further obligation to defend or indemnify Farah under the GTF Policy; and that Canal must reimburse Carolina for all defense expenses, including legal fees, and any indemnity payments from the date the claim was first tendered to Canal.

On January 3, 2013, both Canal and Carolina moved for summary judgment on all Carolina's claims. (Docs. No. 30, 32.) Those motions are ripe for review. (Docs. No. 34, 35, 36, 37.)

II.

Summary judgment is appropriate “if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The Court may therefore grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Matsushita Elec. Indus., Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (The requirement that a dispute be “genuine” means that there must be more than “some metaphysical doubt as to the material facts.”). “The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)).

III.

The parties agree that Ohio law applies to the interpretation of the Canal Policy. In interpreting an insurance contract under Ohio law, a court must give effect to the intent of the parties to the agreement. Retail Ventures, Inc. v. Nat'l Union Fire Ins. Co., 691 F.3d 821, 826 (6th Cir.2012) (citing Hamilton Ins. Servs., Inc. v. Nationwide Ins. Cos., 86 Ohio St.3d 270, 273, 714 N.E.2d 898 (1999)). “Ohio courts shall give insurance contract terms their plain and ordinary meaning unless another meaning is clearly apparent from the contents of the policy.” Id. (citing Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1978) (syllabus ¶ 2)). Further, a court must give meaning to every paragraph, clause, phrase and word. Affiliated FM Ins. Co. v. Owens–Corning Fiberglas Corp., 16 F.3d 684, 686 (6th Cir.1994) (citing Heifner v. Swaney, 1992 Ohio App. LEXIS 4177, 1992 WL 198120, at *2 (Ohio App. 3rd Dist. Aug. 27, 1992)). When the language of a written contract is clear, a court may look no further than the writing itself to find the intent of the parties. Id. As a matter of law, a contract is unambiguous if it can be given a definite legal meaning. Retail Ventures, 691 F.3d at 826 (citing Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 219, 797 N.E.2d 1256 (2003)).

A term is ambiguous if it is reasonably susceptible of more than one meaning. St. Marys Foundry, Inc. v. Employers Ins. of Wausau, 332 F.3d 989, 992 (6th Cir.2003) (citations omitted). Where the written contract is standardized and between parties of unequal bargaining power, an ambiguity in the writing will be interpreted strictly against the drafter and in favor of the nondrafting party. Cent. Realty Co. v. Clutter, 62 Ohio St.2d 411, 413, 406 N.E.2d 515 (1980). In the insurance context, as the insurer customarily drafts the contract, an ambiguity in an insurance contract is ordinarily interpreted against the insurer and in favor of the insured. King v. Nationwide Ins. Co., 35 Ohio St.3d 208, 519 N.E.2d 1380 (1988) (syllabus). “Nonetheless, this rule ‘will not be applied so as to provide an unreasonable interpretation of the words of the policy.’ ” Retail Ventures, 691 F.3d at 826 (quoting Morfoot v. Stake, 174 Ohio St. 506, 190 N.E.2d 573 (1963) (syllabus ¶ 1)).

In the case sub judice, the parties agree that Green Line requested insurance coverage from Canal for Farah's truck before Farah's accident, that Farah paid a premium to Canal for his tractor-trailer to be added as a covered auto to the Green Line Policy, that Canal listed Farah's truck as a covered auto on the Policy and that Farah did not request nor was he added to the Policy as an additional insured driver. Farah believed that the Green Line Policy would provide coverage of his truck during the Alabama to New Jersey mail run.

There is also no dispute that “Farah was driving the vehicle with the express permission ¹ of Yussef Mohamed, the owner of Green Line.” (Carolina Mot. for Summ. J. at 2.) And that “Green Line's permission was provided with the knowledge that Farah was hauling freight for [GTF].²Id.(citing Farah Dep. at 47–48; Docs. No. 28, 28.) Farah kept a logbook for the mail transport, a copy of which was provided to GTF, and Farah was paid by GTF for the job.

What the parties do disagree about is whether the Green Line Policy provides coverage of a scheduled vehicle, driven by its owner/operator who is not a listed driver,...