COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69983 GRAND LEASING & RENTAL, ET AL. : ACCELERATED DOCKET : Plaintiffs-Appellants : : JOURNAL ENTRY -vs- : AND : OPINION HAROLD COOLEY, ET AL. : : Defendants-Appellees : PER CURIAM DATE OF ANNOUNCEMENT OF DECISION AUGUST 29, 1996 CHARACTER OF PROCEEDING Civil appeal from Court of Common Pleas Case No. 285258 JUDGMENT Reversed and remanded. DATE OF JOURNALIZATION APPEARANCES: For Plaintiffs-Appellants: For Defendants-Appellees: THOMAS J. VOZAR, ESQ. BRUCE G. RINKER, ESQ. Vozar, Roberts & Matejczyk Mansour, Gavin, Gerlack 1422 Euclid Avenue & Manos Co., L.P.A. Suite 1330 55 Public Square, Suite 2150 Cleveland, Ohio 44115 Cleveland, Ohio 44113 - 2 - PER CURIAM: This appeal is before the Court on the accelerated docket pursuant to App. R. 11.1 and Loc. App. R. 25. Plaintiffs-appellants Grand Leasing & Rental and Empire Fire & Marine Insurance Company appeal from the trial court's order granting summary judgment in favor of defendants-appellees Harold Cooley and his personal insurer, American States Insurance Company, arising out of an accident in which Cooley was operating a "loaner" automobile while his own leased car was being repaired by Grand Leasing. Plaintiffs Grand Leasing and Empire contend they were entitled to summary judgment rather than defendants-appellees. We agree. For the reasons hereinafter stated, we reverse and remand the case for entry of summary judgment in favor of the plaintiffs- appellants. On May 3, 1993, defendant Cooley left his 1990 Toyota Camry automobile with Grand Leasing to be serviced overnight. Defendant was leasing the 1990 Camry from Grand Leasing for a four year term. Grand Leasing loaned him a Geo Prizm automobile to use while his own car was being serviced. Cooley acknowledged receiving the Geo Prizm automobile by signing a rental agreement. When Cooley left the premises of Grand Leasing driving the Geo Prizm, the automobile was in an undamaged condition. While the Geo Prizm automobile was in Cooley's possession it was wrecked. On deposition, Cooley admitted driving the Geo Prizm loaner after he brought his car in for servicing. However, Cooley testified that - 3 - he is suffering from memory loss as a result of the accident and has no recollection of how the accident occurred in which the loaner was totalled. He does not know where he was going or what he was doing at the time of the accident. Defendant did testify, nevertheless, that he has since been told that his vehicle was struck by another as his vehicle exited a driveway onto a street. Following the accident, Grand Leasing submitted a claim for damage to the loaner to its insurance company, Empire Fire & Marine Insurance Company. Empire adjusted the loss and, because the cost of repair to the automobile exceeded its value, declared it a total loss. The fair market value of the wrecked loaner was determined to be $9,450 and after the deductible of $1,000, Empire paid Grand Leasing $8,450. Empire sold the car for salvage and received $1,392, reducing Empire's net loss to $7,058 for which it was subrogated to Grand Leasing. Grand Leasing and Empire brought suit against Cooley and new- party defendant American States, Cooley's insurer, alleging that Cooley negligently damaged the loaner owned by Grand Leasing. After the pleadings and discovery were closed, the opposing parties filed cross motions for summary judgment based on the insurance policies, rental agreement, depositions and affidavits. The trial court overruled plaintiffs' motion for summary judgment and granted defendants' motion for summary judgment. In its short- form journal entry, the court held that: "Deft. is a 'renter' & covered under Section II(B)(7) & Section IV(B)(2)(a) of the - 4 - [Empire] policy." Plaintiffs filed a timely notice of appeal from these rulings. Plaintiffs' sole assignment of error states as follows: I. THE TRIAL COURT ERRED IN OVERRULING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND IN GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT BECAUSE THE EVIDENCE SHOWS THAT COOLEY WAS LIABLE FOR THE DAMAGE TO GRAND LEASING'S AUTOMOBILE, THAT COOLEY WAS NOT INSURED UNDER THE EMPIRE POLICY FOR DAMAGE TO THE AUTOMOBILE, AND THAT COOLEY WAS INSURED FOR SUCH DAMAGE UNDER THE AMERICAN STATES POLICY. Plaintiffs contend that they have conclusively proven Cooley's liability under a theory of bailment and that he is liable for the unexplained loss of bailed property - the loaner. To establish a prima facie case, a bailor, such as Grand Leasing, need prove only: (1) the existence of a bailment contract; (2) delivery of the bailed property to the bailee; and (3) the bailee's failure to deliver the bailed property undamaged at the termination of the bailment. David v. Lose (1966), 7 Ohio St.2d 97, 99; Collins v. Click Camera & Video, Inc. (1993), 86 Ohio App.3d 826, 831; Aetna Cas. & Sur. Co. v. Woody Sander Ford, Inc. (1969), 21 Ohio App.2d 62. Cooley's argument that the vehicle was given to him as a courtesy without any responsibility for its safekeeping is without merit. There is no question that the arrangement whereby Cooley obtained the Grand Leasing loaner was, as between the two parties, a bailment for mutual benefit. A bailment for hire or mutual benefit bailment exists where personal property is delivered by an owner to another person, and - 5 - both parties benefit from the exchange. David v. Lose, supra; Mills v. Liberty Moving & Storage, Inc. (1985), 29 Ohio App.3d 90, 92. Plaintiff Grand Leasing benefitted by getting the repair work; defendant Cooley benefitted by getting the use of a loaner while his car was being repaired. A mutual benefit bailment gives rise to common-law duties to exercise ordinary care in protecting and keeping safe bailed goods, and to redeliver the subject of bailment. Midwestern Indem. Co. v. Winkhaus (1987), 42 Ohio App.3d 235, 236; Mills, supra; Hotels Statler Co. v. Safier (1921), 103 Ohio St. 638, 643. An inference that the bailee was negligent may be drawn from proof the bailee failed to redeliver the bailed property undamaged. Aetna Cas. & Sur. Co. v. Woody Sander Ford, Inc. (1969), 21 Ohio App.2d 62; Csank v. Westlake Condominium Assn. (Jan. 5, 1995), Cuyahoga App. No. 66774, unreported; Atlantic Mut. Ins. Co. v. Cuttaia (July 21, 1994), Cuyahoga App. No. 65729, unreported. Therefore, the plaintiffs are correct in arguing that, once they have established the foregoing, the defendant/bailee "can only escape liability by establishing an affirmative defense, e.g., that he exercised ordinary care in safeguarding the bailed property, or that the bailor accepted responsibility for its loss." Collins, 86 Ohio App.3d at 831, following David v. Lose, supra. In this case, Cooley, a senior sales agent for Mutual of Omaha, testified that he has no recollection of how the accident occurred in which the loaner was wrecked. Cooley did not know where he was - 6 - going or what he was doing at the time of the accident. Defendants supplied no other evidence showing how the accident occurred or that he exercised ordinary care in safeguarding the automobile. As a matter of law, on well-established bailment principles, Cooley is liable for the loss of the loaner unless other circumstances intervene. Cooley contends that Grand Leasing's insurer, Empire, was contractually bound to pay for the loss of the loaner while in Cooley's possession. In short, Cooley claims he was covered by the Empire policy. This argument was apparently accepted by the trial court in entering summary judgment for Cooley and American States. It is therefore necessary to examine the provisions of the insurance policies at issue. In granting summary judgment for Cooley, the trial court found that Cooley was insured for the automobile damage under Empire's policy, noting in pertinent part: "Deft. is a 'renter' and covered under Section II(B)(7) and Section IV(B)(2)(a) of the policy." (Journal Entry, Nov. 16, 1995). Plaintiffs contend that the trial court erred in its interpretation of the Empire policy. The fundamental rules of construction to be applied were stated in Burris v. Grange Mut. Cos. (1989), 46 Ohio St.3d 84, 89, 545 N.E.2d 83, 89: The fundamental goal in insurance policy interpretation is to ascertain the intent of the parties from a reading of the contract in its entirety, and to settle upon a reasonable interpretation of any disputed terms in a manner calculated to give the agreement its intended - 7 - effect. "The meaning of a contract is to be gathered from a consideration of all its parts, and no provision is to be wholly disregarded as inconsistent with other provisions unless no other reasonable construction is possible." Karabin v. State Auto. Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 167, 10 OBR 497, 500, 462 N.E.2d 403, 406, quoting German Fire Ins. Co. v. Roost (1897), 55 Ohio St. 581, 45 N.E. 1097, paragraph one of the syllabus ***. The words in a policy must be given their plain and ordinary meaning, and only where a contract of insurance is ambiguous and therefore susceptible to more than one meaning must the policy language be liberally construed in favor of the claimant who seeks coverage. [Citations omitted.] Nevertheless, it is axiomatic that the general rule of liberal construction cannot be employed to create an ambiguity where there is none. Karabin, supra, at 166-167, 462 N.E.2d at 406. Cooley is not a named insured on the policy. Coverage in his favor would have to be found then among the definitions or otherwise implicit in the policy terms. The Empire policy is entitled "Garage Coverage Form" and consists of five sections: "Section I - Covered Autos"; "Section II - Liability Coverage"; "Section III - Garagekeepers Coverage"; "Section IV - Physical Damage Coverage"; and "Section V - Garage Conditions." We disagree with the trial court's conclusion that defendant Cooley, a renter, is covered under Section II(B)(7). Section II provides liability coverage. Liability coverage insures against liability to third persons for personal or property damage caused by the covered person's acts. The liability attaches upon the determination that the insured is liable for such act or omission. - 8 - Kerr v. Personal Service Ins. Co. (1975), 44 Ohio App.2d 1, 2; Moore v. Nationwide Mut. Ins. Co. (Jan. 7, 1988), Cuyahoga App. No. 53040, unreported; Hirsch Electric Co. v. Safeco Ins. Co. of Amer. (Aug. 27, 1981), Cuyahoga App. No. 42642, unreported. No such claims by third parties are at issue in this litigation which is over a loss to an insured automobile. Counsel for defendant Cooley conceded at oral argument that liability coverage does not apply to the claims at issue on this appeal and Cooley can not invoke that coverage or language contained in exclusions to that coverage to support its theory that Cooley is covered by the policy. The trial court was mistaken in citing Section II(B)(7) in support of its conclusion that Cooley was covered. The trial court also erred in holding that Section IV(B)(2)(a) provided coverage to Cooley. Section IV of the policy provides "Physical Damage Coverage" only, not liability coverage. The insuring agreement states under Part A, in relevant part: "We will pay for 'loss' to a covered 'auto' *** from any cause ***." This means that Empire was obligated to reimburse Grand Leasing for the loss of the loaner. Empire did in fact pay Grand Leasing for this loss, and is thereby subrogated to Grand Leasing's rights against Cooley or his insurer. Section IV is obviously intended to protect the named insured, Grand Leasing, from damage to its covered automobiles. In that sense, it is similar to the more familiar collision coverage customarily found in standard automobile policies. - 9 - Such coverage is not for the benefit of the tortfeasor who caused the damage. It cannot logically be argued that the existence of collision coverage precludes a subrogation action against the responsible tortfeasor. Bob-Boyd Lincoln Mercury v. Hyatt (July 10, 1986), Franklin App. No. 85AP-882, unreported at p. 5. The fact that Grand Leasing was financially protected against the loss of its car (after the $1,000 deductible), does not mean that Cooley bore no responsibility for the loss. Section IV(B)(2)(a) states as follows: 2. We will not pay for "loss" to any of the following: a. Any covered "auto" leased or rented to to others unless rented to one of your customers while their "auto" is left with you for service or repair. The provision is found under the heading "Exclusions" on page 9 of the Empire policy. Exclusions limit coverage; they do not define who is an insured under the policy. Warren Roofing and Insulating Co. v. The Continental Nat. Ins. Co. (March 4, 1982), Cuyahoga App. No. 43693, unreported; State Automobile Mut. Ins. Co. v. Fairfield Homes, Inc. (Nov. 14, 1989), Fairfield App. No. 11- CA-89, unreported, citing Weedo v. Stone-E-Brick, Inc. (1979), 405 A.2d 788. A person does not become an insured simply because an exception applies to the person. Nussbaum v. Progressive Cas. Ins. Co. (1988), 61 Ohio App.3d 1, 6. Nor is a policy's liability section ambiguous merely because a party is an exception to an exclusion but not included as an insured. Nussbaum, supra at 6; - 10 - Campbell v. Progressive Cas. Ins. Co. (July 28, 1988), Cuyahoga App. No. 54918, unreported; Davidson Volkswagen v. Chulka (Sept. 2, 1978), Cuyahoga App. No. 37662, unreported. Section IV(B)(2)(a) merely reflects that Empire is obligated to pay Grand Leasing for damage to its covered autos when they have been rented to customers such as Cooley. Empire made that payment. It is the car which is insured, not the driver, and the benefit of that coverage goes to Grand Leasing not to a customer (or anyone else) who caused the damage. Cooley, in support of his argument that he was not responsible for the "courtesy" car, cites Rosenal v. Auto Owners Mutual Ins. Co. (1985), 27 Ohio Misc.2d 26. Cooley's reliance on Rosenal is misplaced. In Rosenal, the dealer paid an additional insurance premium for coverage that specified "that garage customers are insureds under this policy with respect to the use of automobiles covered by this policy." The court found that "it is illogical to apply the rental exclusion when Grabke [the garage owner] paid an additional premium specifically to make garage customers insureds under the policy." Id. at 28. The policy below is distinguishable from the one in Rosenal. The policy below does not show an intent to offer coverage to one, who by his own fault, destroys an insured's vehicle, nor does the policy in any way limit the insurer's right of subrogation against the tortfeasor. Plaintiffs-appellants sole assignment of error is sustained. - 11 - For the reasons hereinbefore set forth, the judgment of the trial court entering summary judgment for the defendants-appellees is reversed. The case is remanded to the trial court to enter summary judgment in favor of the plaintiffs against Cooley and American States consistent with the principles set forth in this opinion. Judgment reversed and remanded. - 12 - It is ordered that appellants recover of appellees its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. LEO M. SPELLACY, CHIEF JUSTICE JAMES M. PORTER, JUDGE JOSEPH J. NAHRA, JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, at which .