COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70319 ROYAL INDEMNITY CO. : : Plaintiff-appellant : : JOURNAL ENTRY vs. : and : OPINION ROBERT HENNESSEE, et al : : Defendant-appellees : : : DATE OF ANNOUNCEMENT OF DECISION : _______________________ CHARACTER OF PROCEEDING : Civil appeal from : Court of Common Pleas : Case No. 259,231 JUDGMENT : REVERSED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellant: WARREN ROSMAN Attorney at Law Weston Hurd Fallon Paisley & Howley 2500 Terminal Tower 50 Public Square Cleveland, Ohio 44113-2241 For defendants-appellees: THOMAS C. MAYS Attorney at Law 1015 Euclid Avenue, 3rd Floor Cleveland, Ohio 44115 TIMOTHY E. McMONAGLE, J.: Plaintiff-appellant, Royal Indemnity Company ("Royal Indemni- ty"), appeals the decision of the Cuyahoga County Common Pleas Court which granted summary judgment to defendants-appellees, Robert and Patricia Hennessee (collectively "appellee"). On May 24, 1988, James Slater ("Slater") was operating a truck owned by Richard A. Howard ("Howard") when he rear-ended a truck operated by appellee and owned by Reust Transport, Inc. ("Reust"). At the time of the collision, Slater's truck was being trip-leased by Haddad Transportation, Inc. ("Haddad"), which provided insurance coverage to both Slater and his vehicle through Michigan Mutual 1 Insurance Company ("Michigan Mutual"). Appellee subsequently 2 filed suit against, inter alia, Slater, Haddad and Howard. Michigan Mutual, providing a defense for both Slater and Haddad, settled their claims with appellee for $325,000, well within the 1 Amerisure Companies became the successor to Michigan Mutual. 2 Trucking Services was also a named defendant in the underly- ing tort action. It appears from the briefs of counsel that Trucking Services and Howard were parties to a permanent lease agreement allowing Slater to operate the truck under the federal authority of Trucking Services. The record further reflects that Michigan Mutual provided a defense for Trucking Services and that they were included in the release settling its claims with appel- lee. At oral argument, it was learned that Trucking Services was provided a defense by Michigan Mutual under its own separate policy of insurance. - 3 - $1,000,000 coverage limits of the policy. Failing to appear or otherwise defend, the trial court entered a default judgment against Howard in the amount of $500,000.00. Claiming that the default judgment against Howard was equiva- lent to being uninsured, appellee made a demand upon Royal Indem- nity for uninsured motorist coverage pursuant to Reust's policy with Royal Indemnity, which provided $25,000 of coverage for uninsured motorists' claims. Royal Indemnity, in turn, filed a complaint for declaratory judgment seeking a declaration that uninsured benefits were not available to appellee because both Slater and his vehicle were insured. In its ruling denying Royal Indemnity's motion for summary judgment, the trial court opined 3 that Howard qualified as an uninsured motorist under the Royal Indemnity policy and, as such, Royal Indemnity had to "extend UM policy limits of $25,000.00 to Defendants Hennessee with interest from May 24, 1988." Royal Indemnity timely appeals and assigns the following errors for our review: I. THE TRIAL COURT ERRED IN FINDING THAT HOWARD IS AN UNINSURED MOTORIST. II. THE TRIAL COURT ERRED IN HOLDING THAT ROYAL OWES UNINSURED MOTORIST COVERAGE WHEN, IN FACT, THE OFFENDING VEHICLE WAS COVERED BY MICHIGAN MUTUAL. 3 In its entry journalized February 6, 1996, the trial court incorrectly referred to "Deft. Slater" as the uninsured motorist. This was corrected in an entry journalized on April 18, 1996. - 4 - I. In reviewing a motion for summary judgment, an appellate court conducts a de novo review of the trial court's decision. "A court reviewing the granting of a summary judgment must follow the standards set forth in Civ.R. 56(C) *** ." Aglinsky v. Cleveland Builders Supply Co. (1990), 68 Ohio App.3d 810, 814. Civ.R. 56(C) provides that before summary judgment may be granted, it must be determined that: "(1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from such evidence that reasonable minds can come to but one conclusion and, reviewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to the party." Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327. In its first assignment of error, Royal Indemnity argues that the trial court improvidently granted summary judgment to appellee based on a finding that Howard was uninsured. Specifically, Royal Indemnity maintains that Howard was an additional insured under the Michigan Mutual policy. Appellee, on the other hand, contends that Michigan Mutual refused to defend Howard or include him in the release executed among Haddad, Slater and appellee. As such, appellee argues, Howard cannot be considered insured under the Michigan Mutual policy. - 5 - Section II(A)(1) of the Michigan Mutual policy defines an insured as follows: The following are "insureds:" a. You [Haddad] for any covered "auto." b. Anyone else while using with your per- mission a covered "auto" you own, hire or borrow except (exceptions not appli- cable). * * * d. The owner or anyone else from whom you hire or borrow a covered "auto" that is not a "trailer" while the covered "auto" (1) is being used exclusively in your business as "trucker;" and (2) is being used pursuant to operating rights granted to you by a public authority. The established rule in Ohio is that courts enforce insurance policies using the rules of construction that apply to contracts generally, see Hybud Equip. Corp v. Sphere Drake Ins. Co., Ltd. (1992), 64 Ohio St.3d 657, 665, and that, moreover, words and phrases used in an insurance policy must be given their natural and commonly accepted meaning. Gomolka v. State Auto. Mut. Ins. Co. (1982), 70 Ohio St.2d 166, 167-168. In this case, it is undisputed that Slater's vehicle was a covered "auto" and that it was being used in furtherance of Haddad's business. It is further undisputed that this policy obligated Michigan Mutual to pay all sums that Haddad was legally required to pay as damages for bodily injury or property damages - 6 - resulting from the use of a covered "auto." What is disputed is whether this policy language affords coverage to the owner of the vehicle, Howard. Royal Indemnity directs our attention to several decisions of sister states that have construed identical language as including the owner of the leased vehicle as an additional insured. See Connecticut Indem. Co., v. Harris Transport Co. (W.D. Ark. 1995), 909 F.Supp. 1212, 1224; Maryland Cas. Co. v. City Delivery Service, Inc. (M.D.Pa. 1993), 817 F.Supp. 525, 528-529. Accord Lumberman's Mut. Cas. v. Hanover Ins. (1995), 38 Mass.App.Ct. 53, 55, 645 N.E.2d 35, 36; Ins. Co. of Pa. v. Protective Ins. (1992), 227 Ill. App.3d 360, 366, 592 N.E.2d 117, 122. While Royal Indemnity has not drawn our attention to any Ohio case law, nor has our independent research identified any, we are persuaded that the policy language contained in Section II(A)(1)(d) of the Michigan Mutual policy clearly and unambiguously covers Howard as an additional insured. Moreover, we find the decision of the Supreme Court of Ohio in Wyckoff v. Marsh Bros. Trucking (1991), 58 Ohio St.3d 261 in- structive in defining the employment relationship between carrier- lessee Haddad and the driver of the vehicle, Slater. The Wyckoff court held that in tort causes of action involving leased vehicles of interstate motor carriers, primary liability shall be determined with regard to Interstate Commerce Commission ("ICC") regulations rather than common-law doctrines of respondeat superior. These - 7 - regulations essentially state that if the driver is negligent, the carrier-lessee is liable as a matter of law for accidents that occur while a lease is still in effect and its ICC placards are displayed on the leased vehicle. Id. at 265-266. In creating an irrebuttable presumption of an employment relationship between a carrier-lessee and the driver of the vehicle, the intent was for the benefit of the public at large so as to prevent confusion that can arise from the use of non-owned vehicles as to who is financially responsible for accidents caused by those vehicles. Id. at 264. However, nothing prevents the carrier-lessee from seeking contribution or indemnification from the owner of the vehicle. See Balez-Pierce v. Price & Boyce, Inc. (1993), 86 Ohio App.3d 119, 122. Finding the language of the Michigan Mutual policy to include Howard as an additional insured and the reasoning in Wyckoff instructive on the liability of Haddad as lessee, the trial court erred in determining that Howard was uninsured. Accordingly, Royal Indemnity's first assignment of error is sustained. II. In its second assignment of error, Royal Indemnity maintains that appellee is not entitled to uninsured motorists' benefits because the Michigan Mutual policy provided liability coverage to both Slater and his vehicle. Consequently, Royal Indemnity argues - 8 - that Slater's vehicle fails to qualify as an uninsured vehicle under the uninsured motorists' provisions of the Royal Indemnity policy. Appellee, on the other hand, contends that his claims of negligent entrustment against Howard are separate and distinct from those claims made against Haddad and Slater. As such, appellee maintains that Howard's inability to satisfy the judgment against him based on these claims is equivalent to Howard being uninsured for purposes of invoking Royal Indemnity's uninsured motorists' coverage. The Royal Indemnity policy provides recovery for its insured any sums the insured is legally entitled to recover as damages from the owner or driver of an "uninsured motor vehicle." Section F(3) of the policy's endorsement covering uninsured motorists' coverage defines "uninsured motor vehicle" as follows: 3. "Uninsured motor vehicle" means a land motor vehicle or trailer: a. For which no liability bond or pol- icy at the time of an "accident" provides at least the amounts re- quired by the applicable law where a covered "auto" is principally garaged; b. Which is an underinsured motor vehicle. An underinsured motor vehi- cle is motor vehicle for which the sum of all liability bonds or poli- cies at the time of an "accident" provides at least the amounts required by the applicable law where a covered "auto" is principally garaged but their limits are less than the limits of this insurance; - 9 - c. For which an insuring or bonding company denies coverage or is or becomes insolvent; or d. Which is a hit-and-run vehicle and neither the driver nor owner can be identified. The vehicle must hit an "insured", a covered auto or vehicle an "insured" is "occupying". Royal Indemnity argues that the above policy provision clearly precludes appellee from being eligible for uninsured motorists' benefits because, according to Section F(3)(a), Slater and his vehicle were covered by a policy of liability insurance at the time of the accident. In support of this argument, Royal Indemnity relies on Roy v. State Farm Mut. Auto. Ins. Co. (C.A.6, 1992), 954 F.2d 392, which, applying Kentucky law, held that as long as the driver of the vehicle was insured, the owner's uninsured status did not mean that the vehicle was uninsured for purposes of collecting uninsured motorists' benefits. The reasoning behind this decision is in accord with the intent of R.C. 3938.18(A); namely, to provide uninsured motorist coverage for injured persons who have a legal cause of action against a tortfeasor but who are uncompensated because the tort- feasor is not covered by liability insurance. See State Farm v. Alexander (1992), 62 Ohio St.3d 397, 400; see, also, Watson v. Grange Mut. Cas. Co. (1988), 40 Ohio St.3d 195, 196-197. The purpose of the uninsured motorist statute is not to provide cov- erage for an uninsured vehicle, but rather to afford the insured - 10 - additional protection in the event of an accident. Motorists Mut. Ins. Co. v. Tomanski (1971), 27 Ohio St.2d 222, 224. Notwithstanding, where either the driver or owner of the negligently operated vehicle has liability insurance, there can be no uninsured vehicle to constitute the nexus of the cause. Id. at 225-226. In Tomanski, the Supreme Court of Ohio held that an individual injured as a result of the concurrent negligence of an insured motorist in one car and an uninsured motorist in another car was entitled to coverage under the uninsured motorist provisions of the insured's policy. However, the Tomanski court distinguished the "concurrent" negligence of joint tortfeasors operating separate vehicles from that of joint liability for one vehicle. In so differentiating, the court reasoned that both R.C. 3937.18 and an uninsured motorist clause such as provided in the Royal Indemnity policy required not an uninsured motorist but an uninsured vehicle. Id. In this case, the uninsured motorist clause of the Royal Indemnity policy required an uninsured vehicle before benefits under its coverage were payable. As the vehicle Slater was oper- ating was insured under the policy issued by Michigan Mutual and there was no other vehicle involved in the accident wherein appellee sustained his injuries, there was no uninsured vehicle pursuant to the terms of the Royal Indemnity policy. We acknowl- edge that R.C. 3937.18 requires an analysis of the tortfeasor's insured status rather than the vehicle's status. Watson v. Grange - 11 - Mut. Cas. Co. (1988), 40 Ohio St.3d 195, 197; Buckeye Union Ins. Co. v. Carrell (1991), 77 Ohio App.3d 319, 323; Rowe v. State Farm Mut. Ins. Co. (1990), 66 Ohio App.3d 1, 4. However, under these particular facts, we hold that where either the driver or the owner of a negligently operated vehicle has liability insurance and both the driver and the owner are potentially jointly liable to the injured individual, there is no uninsured vehicle for purposes of uninsured motorists' coverage. Therefore, the trial court erred in finding that Royal Indemnity had to extend its uninsured motorists coverage to appellee in the amount of $25,000, plus interest from the date of the accident. Accordingly, Royal Indemnity's second assignment of error is sustained. Judgment reversed. - 12 - This cause is hereby reversed. It is, therefore, considered that said appellant recover of said appellees its costs herein. It is ordered that a special mandate be sent to said court 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. PATRICIA BLACKMON, P.J. and ANN DYKE, J. CONCUR JUDGE TIMOTHY E. McMONAGLE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E), unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .