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Indemnity Co. v. Plymouth

Supreme Court of Ohio
Dec 12, 1945
146 Ohio St. 96 (Ohio 1945)

Summary

In Home Indemnity, 64 N.E.2d at 250-51, the court, faced with an ambiguity in an insurance policy's exclusions, looked to the circumstances surrounding the purchase of the policy to determine the parties' intent.

Summary of this case from Lumbermens Mut. Cas. Co. v. S-W Industries

Opinion

No. 30357

Decided December 12, 1945.

Insurance — Liability policy — "Employee" defined — Construction of insurance contract — Presumption that that which is not clearly excluded is included — Street commissioner not an "employee" of village — Policy excepted liability for injury or death of employee.

1. An employee is a person who works for another for salary or wages, and the term is usually applied only to clerks, workmen and laborers, and rarely to the higher officers of a corporation or government or to domestic servants.

2. Where exceptions, qualifications or exemptions are introduced into an insurance contract, a general presumption arises to the effect that that which is not clearly excluded from the operation of such contract is included in the operation thereof.

3. A street commissioner of an Ohio village is not an "employee" of the village within the purview of an insurance contract which provides that the insured village, or others in certain cases, shall be indemnified for all sums which the village or such others shall become obligated to pay by reason of injury or death arising out of the use of a truck, and which provides that such contract does not apply to an additional insured, where he and the person injured or killed are employees of the village, or to the village, where the person injured or killed is its employee.

APPEAL from the Court of Appeals of Richland county.

The Home Indemnity Company of New York, on April 2, 1942, issued its policy of insurance covering a truck owned by the defendant, the village of Plymouth, whereby the former agreed to pay on behalf of the latter all sums which it should become obligated to pay by reason of any liability imposed upon it by law for damages resulting from bodily injury or death sustained by any person, with certain exceptions and limitations hereinafter noted, which was caused by accident and arose out of the ownership or use of the truck; and to defend any suit against the insured based on such injury or death and seeking damages on account thereof, even though such suit should have been groundless, false or fraudulent. By the terms of the policy in question, the word "insured," wherever used in the policy and when applicable to the coverage therein provided, included any person while using the truck and any person legally responsible for the use thereof, provided such actual use was within the types of use covered and was with the permission of the named insured.

However, these provisions as to the additional insureds, under the express terms of the policy, did not apply to any employee of the insured with respect to any action because of bodily injury to or death of another employee of the same insured, occurring in the course of his employment in an accident arising out of the use of the automobile in the business of the insured; and, the provisions as to the insured did not apply to bodily injury to or death of any of its employees while engaged in the insured's business other than domestic employment, or while engaged in the operation of the automobile.

On February 24, 1943, while the above-described insurance contract was in force, Fred Grafmiller, an employee of the village of Plymouth, in operating the truck in question for the village at the municipal dump on land rented by the village for that purpose, injured Otis Ervin Moore who later died from such injury. At the time of his injury, Otis Ervin Moore was the duly appointed street commissioner of the village of Plymouth and was engaged in performing the duties of his office.

Pauline Moore, as administratrix of the estate of Otis Ervin Moore, commenced an action for damages in the Common Pleas Court of Richland county against Grafmiller for the alleged wrongful death of her decedent, resulting from the operation of the truck by Grafmiller.

While that action was pending, The Home Indemnity Company instituted this action in the Common Pleas Court of the same county against the village of Plymouth, Pauline Moore, as administratrix of the estate of Otis Ervin Moore, deceased, and Grafmiller, seeking a declaration that it was not obligated to defend Grafmiller in the original suit or to pay any judgment in case one should be rendered therein against him. Defendant Pauline Moore, as administratrix, filed an answer alleging that the injury and subsequent death of her decedent were due to the operation of the truck by Grafmiller as an employee of the village while engaged in the course of his employment, and prayed that a declaratory judgment be rendered in this action to the effect that The Home Indemnity Company is obligated to pay any judgment that she, as administratrix, may recover against defendant Grafmiller.

Defendant village of Plymouth also filed an answer admitting that defendant Grafmiller was its employee and that the death of Moore occurred in an accident arising out of the use of the automobile in question, but denying all other material allegations of the petition. The defendant village affirmatively alleged that it had paid the premiums on the insurance policy ill question, and that in consideration thereof the plaintiff agreed to defend any action and to pay any judgment arising out of the authorized use of the automobile. The prayer of the answer is that plaintiff's petition be dismissed insofar as it affects defendant village. No issue was made in this case as to the applicability of the Uniform Declaratory Judgments Act.

A jury being expressly waived by the parties, the trial court found "that at the time of the accident complained of, Otis Ervin Moore was an official of the village of Plymouth, Ohio, and was not an employee within the meaning of the policy of insurance issued by the plaintiff to the defendant, the village of Plymouth, Ohio," and that the plaintiff, under the terms of the contract of insurance, was obligated to defend Grafmiller in the suit against him and to pay any judgment rendered against him within the limits of the amount of the insurance policy.

The plaintiff appealed to the Court of Appeals wherein the judgment of the Common Pleas Court was reversed and a declaratory judgment rendered to the effect that the plaintiff, as insurer, was not obligated, under the provisions of the policy of insurance, to defend Grafmiller or to pay any judgment rendered against him.

The cause is now in this court for review by reason of the allowance of a motion to certify the record.

Messrs. Henkel Gongwer, for appellee.

Mr. C.W. Chorpening and Mr. Donald Akers, for appellant.


Defendant Pauline Moore, as administratrix of the estate of Otis Ervin Moore, claims that Otis Ervin Moore was an officer and not an employee of the village of Plymouth at the time of his injury resulting in his death, and that as a result Grafmiller, as driver of the truck with the consent of the owner, the village of Plymouth, was covered and protected by the insurance policy issued by the plaintiff to the defendant village.

On the other hand, the plaintiff contends that it is not obligated to defend the action brought by the administratrix of the deceased street commissioner of the village of Plymouth against Grafmiller, an employee of that village, for the reason that the policy stipulated that it does not apply with respect to any action brought against an employee of the insured because of bodily injury to or death of another employee of such insured and for the reason that in its exclusion of insurance coverage the policy provided that it does not apply to bodily injury to or death of an employee of the insured, while engaged in the business, other than domestic employment, of the insured. The plaintiff concedes that Moore was an officer of the village, but claims that, as such, he was also an employee of the village and was excluded by reason of an exception from protection of the policy.

The intention of the parties as expressed in the insurance contract must control its construction. 22 Ohio Jurisprudence, 330, Section 174. The sole question to be determined then is whether Otis Ervin Moore was at the time of his injury an "employee" of the village of Plymouth within the contemplation of the parties as that term was used by them in the policy of insurance.

Webster's dictionary defines "employee" as "one employed by another; one who works for wages or salary in the service of an employer; — disting. from official or officer." The Century dictionary defines the term as a person working for wages; a person in regular working service of another, as a clerk, workman, etc.

On the other hand, the term officer embraces the elements of formal appointment, tenure, duration of service, specification of duties, emolument fixed by legislation or official action, and governmental connection. This definition is confirmed by judicial determination. See State, ex rel. Atty. Genl., v. Craig, 69 Ohio St. 236, 69 N.E. 228; Wright v. Clark, 119 Ohio St. 462, 164 N.E. 512; State, ex rel. Newman, State Librarian, v. Skinner, 128 Ohio St. 325, 191 N.E. 127, 93 A.L.R., 331; People, ex rel. Satterlee, v. Board of Police, 75 N.Y. 38, 41.

Courts universally hold that policies of insurance, which are in language selected by the insurer and which are reasonably open to different interpretation, will be construed most favorably to the insured. Webster v. Dwelling House Ins. Co., 53 Ohio St. 558, 42 N.E. 546, 53 Am. St. Rep., 658, 30 L.R.A., 719; Mumaw v. Western Southern Life Ins. Co., 97 Ohio St. 1, 119 N.E. 132; Great American Mutual Indemnity Co. v. Jones, 111 Ohio St. 84, 144 N.E. 596, 35 A. L. R., 1023; 22 Ohio Jurisprudence, 340, Section 185. Furthermore, exceptions, qualifications and exemptions are introduced into contracts as well as into statutes in a multiplicity of forms. As to such, the general presumption has been declared to be that that which is not clearly excluded from the operation of a contract or statute is included. 37 Ohio Jurisprudence, 774, Section 446; West v. Citizens' Ins. Co., 27 Ohio St. 1, 22 Am. Rep., 294.

Contracts of insurance must be deemed to have been entered into by the parties in view of the state of the law generally, at the time, as it related to the subjects of validity and coverage. In fact, statutes relating to matters pertinent to the risk covered by a contract of insurance become a term or part of the contract itself. Robbins v. Hennessey, 86 Ohio St. 181, 99 N.E. 319; 22 Ohio Jurisprudence, 347, Section 189. A careful consideration of the terms of this contract of insurance seems to indicate that the term "employee" as used therein was referable to the connotation given to the same term throughout the workmen's compensation law of this state, and that in the contract there ran a studied purpose to give coverage to one amenable to the workmen's compensation law in cases where he is not protected by that law and to exclude coverage in cases where he is so protected.

The parties to the insurance contract were confronted with certain well known facts. In the first place, no valid contract could be made indemnifying one amenable to the workmen's compensation law for injuries to or death of his employee occasioned in the course of employment of such employee. Section 1465-101, General Code. It would, therefore, be futile and senseless to expend premium money to secure insurance coverage as to any employee covered by the workmen's compensation law. And, in case of the state, county, city, township, incorporated village and school districts therein, which would include the village of Plymouth, all employees are covered by such act. Section 1465-61, General Code. Again, under the statute in force and in operation when this insurance contract was entered into and when Moore received his injury resulting in his death, every "official of the state, or of any county, city, township, incorporated village or school district therein" in the service of any such governmental unit, and this would include defendant's decedent Moore, was not included within the designation of "employee" or "workman" under the workmen's compensation law, and a governmental unit as the employer of such officer was given no protection under such law. Section 1465-61, General Code. As a consequence, the village of Plymouth had no protection under the workmen's compensation law as to liability, if any, which it has or might have by the reason of the accidental death of Moore while in the course of his duties at the hands of its employee, Grafmiller.

With this situation and its possible implications in mind, the parties entered into the indemnity insurance contract in question. This policy, within the authorized use of the truck, protected the insured and any one operating the truck with the consent of the insured against claims of every person except the insured itself and except any employee of the insured other than a domestic employee, for bodily injury, including death, by reason of the operation of the truck or automobile.

With such broad coverage under the policy, limited only by specific exceptions, was it within the contemplation of the parties to exclude Moore from such coverage on the ground that he was an employee of the insured, when at the same time he was excluded from coverage under the workmen's compensation law because he was not an employee of the same insured? In our opinion, from the language used in the policy, such result was not within the contemplation of the parties. This is indicated by the fact that while a domestic employee, under the statute, is excluded from workmen's compensation coverage, such domestic employee under an exception in the policy, was specifically included within its coverage. In other words, the scheme of coverage indicated that the insured was seeking to secure, and the insurer was agreeing to give, coverage to the village as to all persons who might suffer injury or death by the negligent operation of the truck other than those who, as employees, were covered by the workmen's compensation law. Nothing but a clear and unambiguous expression in an exception clause, amounting to a necessity for it, will justify a court in holding it utterly inconsistent with the preceding general coverage clauses. Ashland Mutual Fire Ins. Co. v. Housinger, 10 Ohio St. 10.

It is true that the village of Plymouth might not be liable for any negligent acts of its employee Grafmiller, in the operation of its truck, on the ground that the village was acting in its governmental capacity, as in the case of City of Wooster v. Arbenz, 116 Ohio St. 281, 156 N.E. 210, 52 A.L.R., 518, but it was, nevertheless, interested in having insurance coverage by an insurer who would be obligated, if the village were sued, to make defense for it.

We are of the opinion that Moore was not an "employee" of the village of Plymouth as that term was used in the insurance policy and since Grafmiller, the defendant in the action brought by Moore's personal representative, was operating the truck with the consent of the insured, he enjoys coverage under the policy'and is entitled to defense by the insurer in the action against him.

The judgment of the Court of Appeals is reversed and that of the Common Pleas Court affirmed.

Judgment reversed.

WEYGANDT, C.J., ZIMMERMAN, BELL, WILLIAMS, TURNER and MATTHIAS, JJ., concur.


In my judgment, ordinarily the questions of whether an indemnity company is required to defend under the provisions of its indemnity contract and whether a given state of facts comes within the coverage of such contract are not proper subjects to be determined in an action for a declaratory judgment for the reason that under the Ohio statute the indemnity company has the right to have those questions determined by a jury after liability has been established. However, the indemnity company (the insurer), the village of Plymouth (the insured) and the administratrix of the estate of the deceased, all being parties in the instant case, coupled with the fact that all parties herein waived a trial by jury upon those questions and joined in a prayer for a declaratory judgment, all are bound by the present judgment. Therefore I concur. See Radaszewski v. Keating, Exrx., 141 Ohio St. 489, 49 N.E.2d 167.

TURNER, J., concurs in the foregoing concurring opinion.


Summaries of

Indemnity Co. v. Plymouth

Supreme Court of Ohio
Dec 12, 1945
146 Ohio St. 96 (Ohio 1945)

In Home Indemnity, 64 N.E.2d at 250-51, the court, faced with an ambiguity in an insurance policy's exclusions, looked to the circumstances surrounding the purchase of the policy to determine the parties' intent.

Summary of this case from Lumbermens Mut. Cas. Co. v. S-W Industries

In Home Indemnity, 64 N.E.2d at 250-51, the court, faced with an ambiguity in an insurance policy's exclusions, looked to the circumstances surrounding the purchase of the policy to determine the parties' intent.

Summary of this case from Lumbermens Mut. Cas. Co. v. S-W Industries

In Home Indemn. Co. v. Plymouth (1945), 146 Ohio St. 96, 32 O.O. 30, 64 N.E.2d 248, paragraph one of the syllabus, this court gave the following definition of "employee": "An employee is a person who works for another for salary and wages, and the term is usually applied only to clerks, workmen and laborers, and rarely to the higher officers of a corporation or government or to domestic servants."

Summary of this case from Internatl. Union of Eng. v. Wannemacher
Case details for

Indemnity Co. v. Plymouth

Case Details

Full title:THE HOME INDEMNITY CO., NEW YORK, APPELLEE v. VILLAGE OF PLYMOUTH ET AL.…

Court:Supreme Court of Ohio

Date published: Dec 12, 1945

Citations

146 Ohio St. 96 (Ohio 1945)
64 N.E.2d 248

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