[Cite as Acuity, Mut. Ins. Co. v. Progressive Specialty Ins. Co.,

.]

IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY

ACUITY, A MUTUAL INSURANCE CASE NO. 2021-P-0001 COMPANY,

Plaintiff-Appellant, Civil Appeal from the Court of Common Pleas -v-

PROGRESSIVE SPECIALTY Trial Court No. 2020 CV 00508 INSURANCE COMPANY, et al.,

Defendant-Appellee.

OPINION

Decided: May 31, 2022 Judgment: Reversed and remanded

Douglas G. Leak, Kenneth A. Calderone, and John R. Chlysta, Hanna, Campbell & Powell, LLP, 3737 Embassy Parkway, Suite 100, Akron, OH 44333 (For Plaintiff- Appellant).

David L. Lester and David G. Utley, Collins, Roche, Utley & Garner, LLC, 520 South Main Street, Suite 2551, Akron, OH 44311 (For Defendant-Appellee).

MARY JANE TRAPP, J.

{¶1} This case presents an issue of competing insurance policies for liability

coverage of a motor vehicle collision where the driver was not the owner of the vehicle

but had the owner’s permission to drive the vehicle. Appellant, Acuity, A Mutual Insurance

Company (“Acuity”), appeals the judgment of the Portage County Court of Common

Pleas, which granted summary judgment to appellee, Progressive Specialty Insurance

Company (“Progressive”), on the issue of liability coverage after finding that the “other insurance” provisions did not conflict since the driver did not meet the definition of an

“insured” under Progressive’s policy.

{¶2} In its sole assignment of error, Acuity contends that, notwithstanding the

definition of “insured” under Progressive’s policy, when one insurer’s policy provides

excess liability coverage for an accident (an “excess” clause), and the other insurer

attempts to avoid coverage through an “escape” clause, the escape clause is

unenforceable, and that policy becomes primary. Thus, Acuity argues Progressive should

be primarily liable for the motor vehicle accident.

{¶3} After a careful review of the record and pertinent law, we find Acuity’s

argument to be with merit insofar as the trial court failed to apply the Supreme Court of

Ohio’s holding in State Farm Mut. Auto. Ins. Co. v. Home Indem. Ins. Co.,

,

(1970) (“State Farm”): “[w]here an insurance policy insures a loss

‘only if no other valid and collectible automobile liability insurance * * * is available,’ and

another insurance policy insures the same loss only as to the ‘excess over collectible

insurance,’ the latter provision will be given effect; thus, the former policy will be held to

furnish the insurance for the loss.”

at syllabus. Progressive’s definition of insured is

an escape clause – to find otherwise would be elevating form over substance. See

.

{¶4} Acuity’s analysis must be taken one step further, however, since once

Progressive’s escape clause is negated, we are left with two competing excess clauses.

Therefore, we must apply the Supreme Court of Ohio’s holding in Buckeye Union Ins. Co.

v. State Auto. Mut. Ins. Co.,

,

(1977), which adopted

a method of proration in which “the two insurers become liable in proportion to the amount

of insurance provided by their respective policies.”

. 2

Case No. 2021-P-0001 {¶5} Thus, we reverse the judgment of the Portage County Court of Common

Pleas granting summary judgment in favor of Progressive and remand to the trial court to

enter judgment based on the proration method in accordance with this opinion.

Substantive and Procedural Facts

{¶6} In August 2020, Acuity filed a complaint for declaratory judgment to

determine the coverage offered by two different insurance policies in a single-vehicle

accident.

{¶7} On June 4, 2020, Ashton Smith (“Mr. Smith”) was the permissive driver of a

2010 Toyota Corolla owned by Emily Willingham-Schiavoni. There were three

passengers in the vehicle: Nicolas Willingham, Anthony G. Sagaris, and Robert A.

Sagaris. Mr. Smith lost control of the vehicle while driving and went off of the road, striking

a utility pole.

{¶8} At the time of the accident, Progressive maintained an automobile liability

insurance policy on the Toyota Corolla that Mr. Smith was driving, and Acuity maintained

an automobile liability policy on Eric P. Smith, the named insured, which included Mr.

Smith as a listed driver. Both policies had liability limits of $100,000 per person and

$300,000 per accident.

{¶9} In its complaint, Acuity contended that because the Toyota was not owned

by Mr. Smith, its coverage was excess due to the “other insurance” provision in its policy,

which states that its coverage “is excess over any other collectible auto liability

insurance.” Acuity further argued that Progressive’s policy covers permissive users of

the vehicle and that its policy contains an “escape” clause, which, contrary to Ohio law,

purports to negate coverage if an insured has other coverage.

3

Case No. 2021-P-0001 {¶10} Acuity, citing State

argued that according to established

Supreme Court of Ohio precedent, when one policy contains escape language while

another contains excess language, the excess language prevails, and the policy with the

escape language provides primary coverage.

{¶11} Relevant to this appeal, Acuity demanded judgment determining and

declaring that Progressive’s policy was either primary to Acuity’s excess coverage or,

alternatively, applies pro-rata with Acuity’s coverage.

{¶12} Progressive filed an answer with a counterclaim and cross-claim for

declaratory judgment, asserting in one of its defenses that its policy defined “insured

person” for liability coverage, in pertinent part, as “any person who is not insured for

liability coverage by any other insurance policy * * * with respect to an accident arising

out of that person’s use of a covered auto with the permission of you, a relative, or a

rated resident.” (Emphasis sic.) Thus, Mr. Smith was not an “insured person” under

Progressive’s policy since he was a listed driver under Acuity’s policy and was insured

for liability coverage under that policy for the accident. Therefore, by its own terms, since

there was no “other applicable liability insurance,” Acuity’s other insurance clause did not

apply.

{¶13} Progressive demanded judgment determining and declaring that Mr. Smith

was not an “insured” person for liability coverage under the Progressive policy and that it

had no duty to defend or indemnify him as to any claims arising from the accident.

The Policies

{¶14} In relevant part, Progressive’s Policy defines an “Insured person” under

Additional Definitions for Part I – Liability to Others, as:

4

Case No. 2021-P-0001 {¶15} “a. you, a relative, or a rated resident with respect to an accident arising

out of the ownership, maintenance or use of an auto or a trailer;

{¶16} “b. any person who is not insured for liability coverage by any other

insurance policy, self-insurance program, or financial responsibility bond with respect to

an accident arising out of that person’s use of a covered auto with the permission of you,

a relative, or a rated resident;

{¶17} “c. any person or organization with respect only to vicarious liability for the

acts or omissions of a person described in a. or b. above; and

{¶18} “d. any ‘Additional Interest’ shown on the declarations page with respect

only to its liability for the acts or omissions of a person described in a. or b. above.”

(Emphasis sic.)

{¶19} The policy’s “Other Insurance” provision under Part I states, “If there is any

other applicable liability insurance or bond, we will pay only our share of the damages.

Our share is the proportion that our limit of liability bears to the total of all applicable

limits. However, any insurance we provide for a vehicle or trailer, other than a covered

auto, will be excess over any other collectible insurance, self-insurance, or bond. Any

insurance we provide for use of a covered auto by any person other than you will be

excess over any other collectible insurance, self-insurance, or bond.” (Emphasis sic.)

{¶20} Acuity’s policy defines an “insured person” under Part I, Liability, as:

{¶21} “1. You for the ownership, maintenance or use of your insured car.

{¶22} “2. Any person while using your insured car with your permission or that

of any adult member of your household.

{¶23} “3. You or a relative while using a car or other utility trailer other than

your insured car with a reasonable belief of having permission to do so. 5

Case No. 2021-P-0001 {¶24} “4. Any other person or organization with respect only to legal liability for

acts or omissions of:

{¶25} “a. Any person covered under this Part while using your insured car.

{¶26} “b. You or any relative covered under this Part while using any car or utility

trailer other than your insured car if the car or utility trailer is not owned or hired by

that person or organization.” (Emphasis sic.)

{¶27} The “excess clause” is in the “Other Insurance” provision under Liability,

Part I and states, “If there is other applicable auto liability insurance on a loss covered by

this Part, we will pay our proportionate share as our limits of liability bear to the total of

all applicable liability limits. But, insurance afforded under this Part for a vehicle you do

not own is excess over any other collectible auto liability insurance.” (Emphasis sic.)

Summary Judgment

{¶28} Both parties filed summary judgment motions, each arguing that the other’s

policy provided primary coverage.

{¶29} The trial court found Progressive’s motion for summary judgment well-taken

and granted it as to liability coverage. More specifically, the court found that Mr. Smith

was not an “insured person” for liability coverage under Progressive’s policy. Therefore,

Progressive had no duty to defend or indemnify him as to any claims arising from the

June 4, 2020, accident. Further, Acuity did have a duty to defend or indemnify Mr. Smith

for any bodily injury and property damage claims arising from the accident. The trial court

denied Acuity’s motion for summary judgment as to liability coverage, finding that

because Mr. Smith was not an “insured person” under Progressive’s policy, no “other

insurance” issue was presented. The trial court granted summary judgment to

6

Case No. 2021-P-0001 Progressive on Acuity’s complaint and on Progressive’s counterclaim and cross-claim for

declaratory judgment as to liability coverage.

{¶30} Acuity raises one assignment of error on appeal:

{¶31} “The trial court erred in granting Progressive’s motion for summary

judgment and denying Acuity’s motion for summary judgment on the liability-coverage

issue.”

Standard of Review

{¶32} Once a trial court determines that a matter is appropriate for declaratory

judgment, its holdings regarding questions of law are reviewed on a de novo basis. Arnott

v. Arnott,

,

,

, ¶ 13.

{¶33} Furthermore, this case comes before us on summary judgment. Pursuant

to Civ.R. 56(C), summary judgment is appropriate when there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Holik v.

Richards, 11th Dist. Ashtabula No. 2005-A-0006,

, citing Dresher

v. Burt,

,

(1996). In addition, it must appear from

the evidence and stipulations that reasonable minds can come to only one conclusion,

which is adverse to the nonmoving party.

citing Civ.R. 56(C). The standard in which

we review the granting of a motion for summary judgment is de novo.

citing Grafton

v. Ohio Edison Co.,

,

(1996).

Analysis

{¶34} In Acuity’s sole assignment of error, it contends the trial court erred in

awarding summary judgment in favor of Progressive and denying its motion for summary

judgment on the liability-coverage issue. More specifically, Acuity argues the trial court

erred in failing to apply the Supreme Court of Ohio’s decision in State

7

Case No. 2021-P-0001 {¶35} In State Farm, State Farm insured the driver, who was driving another car

with the permission of its owner and was involved in a collision. State Farm satisfied the

claims and then brought action against Home Indemnity under a policy issued by the latter

to the owner of the borrowed car.

. Both conceded that were it not for the

“other language” in each, the driver would be covered under both policies. Conversely, if

both policies were given full effect, neither policy would cover the loss.

.

{¶36} The Home Indemnity policy contained an “escape” provision, similar to

Progressive’s provision, stating that it would provide coverage to a person using the

covered auto with permission of the named insured “but only if no other valid and

collectible automobile liability insurance, either primary or excess * * * is available to such

person.”

{¶37} State Farm’s “excess” clause conceded no basic or primary liability, limiting

liability to the excess over other collectible insurance. As the court pointedly inquired,

“But before the policy can ride as excess insurance, the other policy must be made to

walk as primary insurance. Can it?” (Footnote omitted.)

.

{¶38} Because Home Indemnity’s policy contained the language “no other primary

or excess” available to the driver, the Supreme Court of Ohio found this language

insufficient to prevent liability from attaching to the insurer, Home Indemnity, who

designed it.

.

{¶39} Similarly here, Progressive’s “escape clause” is insufficient to prevent

liability from attaching to it. The “escape clause” in Progressive’s policy is located within

its definition of an “insured person”: “any person who is not insured for liability coverage

by any other insurance * * * with respect to an accident arising out of that person’s use of

a covered auto with the permission of you * * *.” (Emphasis sic.) 8

Case No. 2021-P-0001 {¶40} There is one significant difference from State Farm in this case since we

are left with two competing “excess” clauses. Because Mr. Smith is an insured under

both policies, they each cover the same risk, and they each provide that their liability with

regard to that risk shall be excess insurance over other valid, collectible insurance. In

addition, each policy has the same liability coverage limits.

{¶41} In Buckeye

the Supreme Court of Ohio determined that

“[s]ince there can be no primary insurance of the risk where there are conflicting excess

clauses, the excess clauses a fortiori cannot be a valid means of establishing only

‘secondary’ liability.”

. The Supreme Court went on to hold that “where two

insurance policies cover the same risk and both provide that their liability with regard to

that risk shall be excess insurance over other valid, collectible insurance, the two insurers

become liable in proportion to the amount of insurance provided by their respective

policies.”

. See also Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 6th Dist.

Lucas No. L-10-1095,

, ¶ 28 (Although differently worded, under Buckeye

Union both excess insurance clauses are deemed inoperable, and liability coverage is

apportioned between the insurers in proportion to the amount of insurance provided by

their respective policies).

{¶42} Progressive cites to a collection of underinsured/uninsured motorist

(“UIM/UM”) cases in support of their argument and, without citing to any caselaw in

support, contends there is no difference between primary auto liability and UIM/UM

contract interpretations under the law. See Ashcraft v. Grange Mut. Cas. Co., 10th Dist.

Franklin No. 07AP-943,

; Mitchell v. Motorists Mut. Ins. Co., 10th Dist.

Franklin No. 04AP-589,

; Engler v. Stafford, 6th Dist. Lucas No. L-06-

1257,

; Lightning Rod Mut. Ins. Co. v. Grange Mut. Cas. Co.,

9

Case No. 2021-P-0001 App.3d 505,

,

(9th Dist.). We are not persuaded by this

argument since the determinative issue when assessing the validity of an insurance policy

exclusion in the context of UIM/UM coverage is the exclusion’s conformity with the statute

governing UIM/UM coverage, i.e., R.C. 3937.18. See, e.g., Shepherd v. Scott, 3d Dist.

Hancock No. 5-02-22,

, ¶ 17; Martin v. Midwestern Group Ins. Co.,

,

(1994). Thus, in Shepherd, a converse case to the

circumstances presented here, the Third District declined to apply State Farm since it was

not “decided in the context of UM/UIM coverage.” Id. at ¶ 17.

{¶43} Finding Acuity’s assignment of error to have merit in part, we reverse the

judgment of the Portage County Court of Common Pleas granting summary judgment in

favor of Progressive and remand to the trial court to enter judgment based on the proration

method in accordance with this opinion.

THOMAS R. WRIGHT, P.J.,

CYNTHIA WESTCOTT RICE, J.,

concur.

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Case No. 2021-P-0001