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Travelers Property Casaulty Company of America v. Cincinnati Insurance Co.

Court of Appeals of Ohio, Fifth District, Ashland

June 21, 2019

TRAVELERS PROPERTY CASAULTY COMPANY OF AMERICA Plaintiff-Appellant
v.
CINCINNATI INSURANCE COMPANY Defendant-Appellee

          Appeal from the Ashland County Court of Common Pleas, Case No. 17-CIV-154

          FOR PLAINTIFF-APPELLANT: GARY L. NICHOLSON RICHARD C.O. REZIE

          FOR DEFENDANT-APPELLEE: LOUIS M. DEMARCO JAMES J. REAGAN

          Hon. William B. Hoffman, P.J. Hon. Patricia A. Delaney, J. Hon. Craig R. Baldwin, J.

          OPINION

          Delaney, J.

         {¶1} Plaintiff-Appellant Travelers Property Casualty Company of America appeals the June 20, 2018 judgment entry of the Ashland County Court of Common Pleas.

         FACTS AND PROCEDURAL HISTORY

         Lopeman v. Stewart

         {¶2} On January 26, 2017, Joylynn M. Lopeman filed a complaint in the Ashland County Court of Common Pleas against Glen P. Stewart, both individually and in his official capacity as the Mayor of the City of Ashland, based on an accident that occurred on December 2, 2015. Lopeman alleged that on December 2, 2015, Stewart was driving his 2007 Chevy Colorado eastbound on Samaritan Avenue. Lopeman was walking on College Boulevard. Stewart turned onto College Boulevard and hit Lopeman, causing her bodily injuries. Lopeman brought multiple causes of actions, one being respondeat superior. Lopeman alleged that at the time of the accident, Stewart was working within the scope of his employment as Mayor; therefore, the City of Ashland was responsible for his negligence.

         {¶3} At the time of the accident, Stewart was the named insured on an automobile liability insurance policy issued by Defendant-Appellee Cincinnati Insurance Company. The Cincinnati policy was purchased by Steward and covered Stewart's 2007 Chevy Colorado. Also at the time of the accident, Plaintiff-Appellant Travelers Property Casualty Company of America issued an automobile liability insurance policy to the City of Ashland. Cincinnati communicated with Travelers and stated that Cincinnati and Travelers should defend and indemnify Stewart on a pro rata basis. Travelers responded that pursuant to the terms of its policy, it provided only excess liability insurance for nonowned vehicles and Cincinnati provided primary liability coverage.

         {¶4} Stewart filed a third-party complaint against the City of Ashland demanding that the City provide a full defense and indemnification.

         {¶5} On March 24, 2017, the parties filed a Joint Stipulation of Dismissal pursuant to Civ.R. 41(A)(1)(b). It stated:

Now come the parties and pursuant to Civ.R. 41(A)(1)(b) hereby stipulate to the dismissal of Defendant Glen P. Stewart, Individually. For the purpose of this litigation, the parties stipulate that Mr. Stewart was acting in the course and scope of his employment, as the Mayor of the City of Ashland, at the time of the motor vehicle accident which is the subject of Plaintiff's Complaint.
This case will remain pending against Defendant Glen P. Stewart, Mayor of the City of Ashland, as an official capacity claim against the City of Ashland, as well as the other named Defendants.

         The Joint Dismissal was signed by counsel for Plaintiff Lopeman; counsel for Defendants City of Ashland and Stewart, as Mayor; counsel for Defendant State Farm; and counsel for Defendants/Third Party Plaintiffs Stewart, individually, and Stewart, as Mayor.

         Travelers v. Cincinnati

         {¶6} On August 21, 2017, Travelers filed a declaratory judgment action against Cincinnati in the Ashland County Court of Common Pleas. Travelers requested the trial court issue a declaratory judgment finding that Cincinnati's automobile liability insurance provided primary coverage and Travelers' automobile liability policy provided excess coverage. Travelers contended Cincinnati had a duty to settle or defend until its limit of insurance coverage was tendered for settlement. Travelers argued the matter should be resolved by the Ohio Supreme Court decision in Motorists Mutual Ins. Co. v. Lumbermens Mut. Ins. Co., 1 Ohio St.2d 105, 205 N.E.2d 67 (1965). Cincinnati argued that pursuant to the terms of its automobile liability policy, Travelers was responsible for primary liability coverage and Cincinnati was responsible for excess liability coverage.

         {¶7} The matter was scheduled for a bench trial before the magistrate. In preparation for the bench trial, the parties filed joint stipulated facts and exhibits. The parties also submitted bench briefs in support of their positions.

         Travelers Automobile Liability Policy

         {¶8} Travelers argued that pursuant to the terms of its automobile liability policy, it provided coverage excess over Cincinnati's primary liability coverage. In support of its argument, it submitted the automobile liability insurance policy issued to the City of Ashland, effective from August 30, 2015 to August 30, 2016. The named insured on the policy was, "City of Ashland." Travelers did not dispute that pursuant to the terms of its Business Auto Coverage, the Mayor's Chevy Colorado was a "covered auto."

         {¶9} The Business Auto Coverage Part Declarations explained the Coverage and Limits of Insurance:

         Section II - Covered Autos Liability Coverage A. Coverage

We will pay all sums an "insured" legally must pay as damages because of a "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".
1. Who Is An Insured
The following are "insureds":
a. You for any covered "auto".

         {¶10} The automobile liability policy included a Public Entity Auto Extension Endorsement. It added the following definition to "A.1., Who Is An Insured," of "SECTION II - COVERED AUTOS LIABILITY COVERAGE,"

Any of your lawfully elected or appointed officials, directors or executive officers or any member of your boards is an "insured" while using a covered "auto" in the course of his or her duties for you at the time of an "accident."

         {¶11} Most relevant to the declaratory judgment action, the Travelers automobile liability policy included conditions for coverage. Travelers argued that "Section IV - Business Auto Conditions" limited its coverage for the ...


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