Case Title: Fed. Ins. Co. v. Executive Coach Luxury Travel, Inc.

Citation: 2010-Ohio-6300

Docket Number: 20092307

State: ohio

Court: Ohio Supreme Court

Date: 2010-12-28T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Fed. Ins. Co. v. Executive Coach Luxury Travel, Inc., Slip Opinion No. 2010-Ohio-6300.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested to 
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 
South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2010-OHIO-6300 
FEDERAL INSURANCE COMPANY, APPELLEE, v. EXECUTIVE COACH LUXURY 
TRAVEL, INC., APPELLEE; BETTS, ADMR., ET AL., APPELLANTS. 
AMERICAN ALTERNATIVE INSURANCE CORPORATION, APPELLEE, v. 
EXECUTIVE COACH LUXURY TRAVEL, INC., APPELLEE; BETTS, ADMR., ET AL., 
APPELLANTS. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Fed. Ins. Co. v. Executive Coach Luxury Travel, Inc.,  
Slip Opinion No. 2010-Ohio-6300.] 
Insurance — Insureds — Bus service contracted by college is a “hired” bus under 
the college’s insurance policy, and the driver employed by the bus 
company is an “insured” under that same policy — Judgment reversed, 
and cause remanded. 
(No. 2009-2307 — Submitted September 14, 2010 — Decided 
December 28, 2010.) 
APPEAL from the Court of Appeals for Allen County, 
Nos.1-09-17 and 1-09-18, 2009-Ohio-5910. 
SUPREME COURT OF OHIO 
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__________________ 
PFEIFER, J. 
{¶ 1} In March 2007, the Bluffton University (“Bluffton”) baseball team 
was scheduled to play multiple games in Sarasota, Florida.  James Grandey Jr., 
Bluffton’s head baseball coach, had contracted with Executive Coach Luxury 
Travel, Inc. (“Executive”) to transport the players and coaches to Florida.  Jerome 
Niemeyer, an Executive employee, was a driver.  While driving, he apparently 
mistook an exit ramp for another lane on the highway and was unable to stop the 
bus at the top of a ramp.  The bus crashed onto the roadway below the interstate.  
Niemeyer, his wife, and five Bluffton players were killed in the crash.  Others 
were injured. 
{¶ 2} At the time of the crash, Bluffton had a commercial automobile 
policy with Hartford Fire Insurance Company ("Hartford"), a commercial 
umbrella policy with appellee American Alternative Insurance Corporation 
(“American”), and an excess follow-form policy with appellee Federal Insurance 
Company (“Federal”).  The Federal policy has a clause stating that its coverage is 
subject to the terms, conditions, agreements, exclusions, and definitions of its 
“controlling underlying insurance,” which is the American policy.  The American 
policy is subject to “Underlying Insurance,” which is the Hartford policy.  The 
Hartford policy language, in other words, controls the extent of the coverage of all 
Bluffton’s insurance policies.  The issue is whether Niemeyer is an “insured” 
within the language and meaning of Bluffton’s Hartford policy. 
{¶ 3} Appellants, who comprise certain injured passengers and the 
administrators of the estates of the deceased, argue that Niemeyer is an "insured" 
because Niemeyer drove a bus that Bluffton hired and with Bluffton's permission.  
Their argument is grounded in the principle that words not defined within an 
insurance policy must be given their natural and commonly accepted meaning.  
January Term, 2010 
3 
 
Gomolka v. State Auto. Mut. Ins. Co. (1982), 70 Ohio St.2d 166, 167-168, 24 
O.O.3d 274, 436 N.E.2d 1347.  Federal Insurance Company and American 
Alternative Insurance Corporation counter that Bluffton did not "hire" the bus 
because it did not exert control over and possess the bus.  They argue that 
Bluffton simply contracted for transportation services and did nothing more than 
assent to Executive’s authority over its own bus drivers. 
{¶ 4} Appellees filed separate complaints for declaratory judgment.  
Appellants filed motions to intervene.  The trial court granted the motions to 
intervene, and shortly thereafter, the cases were consolidated.  Appellees and 
appellants filed motions for summary judgment.  The trial court granted appellees’ 
motion for summary judgment, stating that Bluffton had neither hired the charter 
bus nor permitted Niemeyer to drive the bus and concluded that Bluffton did not 
have control or authority over the bus and the driver.  Appellants appealed.  The 
court of appeals affirmed, concluding that Niemeyer and the bus were not 
“insureds” under the Hartford Policy.  Fed. Ins. Co. v. Executive Coach Luxury 
Travel, Inc., Allen App. Nos. 1-09-17 and 1-09-18, 2009-Ohio-5910, ¶ 45.  We 
granted appellants’ discretionary appeal.  Fed. Ins. Co. v. Executive Coach Luxury 
Travel, Inc., 124 Ohio St.3d 1505, 2010-Ohio-799, 922 N.E.2d 969. 
Analysis 
{¶ 5} Addressing the policy owner, Section II(A)(1)(b) of the Hartford 
policy defines an “insured” as “[a]nyone else while using with your permission a 
covered ‘auto’ you own, hire or borrow.”  The parties refer to this clause as the 
"omnibus clause."  Appellants argue that pursuant to the plain meaning of "hire" 
and "permission," Niemeyer is an “insured.”  Appellees maintain that Executive is 
an independent contractor for whom Niemeyer worked and that therefore, 
Niemeyer was not using the charter bus with Bluffton’s “permission,”  and nor did 
SUPREME COURT OF OHIO 
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Bluffton “hire” the charter bus.  They believe, therefore, that Niemeyer is not an 
“insured.” 
{¶ 6} Pursuant to the policy, a person who otherwise fits the definition of 
an insured can be excluded from coverage through five listed exceptions.  We 
conclude that none of them apply.  The omnibus clause excepts from coverage the 
owner of an auto that is hired or borrowed.  Niemeyer did not own the charter bus 
or rent or lend it to Bluffton.  The clause also excludes an employee driving his or 
her auto or the auto of a family member.  Neither Niemeyer nor a family member 
owned the charter bus.  Anyone selling, servicing, repairing, parking, or storing 
"autos" is also excluded.  Niemeyer was doing none of those things.  Excepted 
from coverage also is anyone, not an employee, who is moving property to or 
from a covered auto.  Niemeyer was not moving property to or from a covered 
vehicle.  Finally, coverage excludes partnership members and members of a 
limited liability company when driving an auto owned by the partner or member 
or a member of his or her household.  Niemeyer was not a partner or member of 
any entity involved in this case. 
{¶ 7} Having concluded that Niemeyer is not excepted from coverage, 
we must determine whether he is an "insured."  Preliminarily, it is important to 
address a policy argument that imbues the arguments of the appellees.  The 
appellees contend that they never intended to provide coverage for someone like 
Niemeyer, whom they consider an unforeseen third party.  We consider this 
contention disingenuous.  The omnibus clause is broad.  It applies, with the above 
exceptions, to "anyone else."  We are not persuaded by the contention that the 
driver of a bus that Bluffton rented from a company in the business of renting 
buses is an unforeseen third party, when a clause in the insurance policy covers 
"anyone else" driving a hired auto. 
January Term, 2010 
5 
 
{¶ 8} The omnibus clause appears straightforward; none of the words in 
it are unusual or uncommon, but only "auto" is defined in the policy.  All the 
involved parties have spent much time and effort advocating for their definition of 
the words "hire" and "permission."  On its face, it is clear to us that the omnibus 
clause applies to the case before us; Bluffton hired the bus from Executive and 
granted permission to Niemeyer to drive the bus.  Whether the insurance company 
intended the clause to apply is immaterial because the language of the policy 
supports a conclusion that Niemeyer is an insured.  We construe insurance 
policies liberally in favor of the insured.  Blue Cross & Blue Shield Mut. of Ohio 
v. Hrenko (1995), 72 Ohio St.3d 120, 122, 647 N.E.2d 1358,  citing Yeagar v. 
Pacific Mut. Life. Ins. Co. (1956), 166 Ohio St. 71, 1 O.O.2d 204, 139 N.E.2d 48, 
paragraph one of the syllabus. 
{¶ 9} Appellees contend that the meaning of the word “hire” cannot be 
determined without recourse to federal circuit court cases, which define “hire” in 
terms of control and possession.  United States Fid. & Guar. Co. v. Heritage Mut. 
Ins. Co. (C.A.7, 2000), 230 F.3d 331, 333.  Appellees posit the following factors 
to determine whether a party has possession and control over an auto:  whether the 
policy holder (1) maintained the vehicle, (2) required the vehicle to be a certain 
size or have certain specifications, (3) selected the driver, (4) had the authority to 
fire the driver, (5) was “ ‘interested in only the results’ ” of the transportation, and 
(6) assumed control of the vehicle by directing loading operations.  Toops v. Gulf 
Coast Marine Inc. (C.A.5, 1996), 72 F.3d 483, 487-488.  We are not persuaded 
that these cases should be the law of Ohio.  First, they are factually inapposite in 
that they involve the loading and hauling of construction equipment and materials, 
not the transportation of people.  Second, even under this test, we would conclude 
that Bluffton hired the bus. 
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{¶ 10} When Grandey requested a bus from Executive, he had certain size 
and leisure requirements.  He specifically requested a bus large enough to hold the 
entire team and that had a DVD player.  Executive sought and received Bluffton’s 
express permission to allow Niemeyer, a driver with whom Grandey had had 
experience, to drive the bus.  Grandey testified at deposition that he had the 
authority to direct Niemeyer to stop driving if he was driving dangerously. 
Grandey could also request that Niemeyer stop the bus for any reason, including 
whenever the players needed a break or a meal.  The Bluffton players loaded their 
equipment and luggage onto the charter bus.  Finally, when Grandey discovered 
that a DVD player was not working properly, he had the driver stop the bus, and 
Grandey fixed it.  We consider these facts to collectively establish the requisite 
level of control and possession to meet the test posited by appellees, even though 
we do not adopt that test. 
{¶ 11} Appellees also rely on Combs v. Black, 10th Dist. No. 05 AP-1177, 
2006-Ohio-2439.  We consider this reliance misplaced, as the case provides more 
support to appellants.  The insurance policy in Combs contains an exception to its 
omnibus clause that is similar to the second exception in this case, except that, in 
addition to excluding from coverage the owner of an auto that is hired or 
borrowed, it also excepts agents and employees of the owner.  Id. at ¶ 19.  If that 
exception had been in the Hartford policy, Niemeyer could not be an "insured."  
But there is no such exception in the Hartford policy, and we will not create one.  
The existence of the exception in Combs is compelling evidence that Niemeyer is 
not an unforeseen third party. 
{¶ 12} Two key terms, "hire" and "permission," are used in the omnibus 
clause and have common and ordinary definitions.  The term "hire" means to 
“procure the temporary use of property, usu. at a set price.”  Black’s Law 
Dictionary (9th Ed.2009) 799; see also Merriam-Webster’s Collegiate Dictionary 
January Term, 2010 
7 
 
(11th Ed.2006) 589.  The term "permission" is defined as authorization.  Black’s 
Law Dictionary at 1255; see also Merriam-Webster’s Collegiate Dictionary at 
923. 
{¶ 13} We conclude that the lower courts erred when they determined that 
Niemeyer was not an "insured."  Based on the facts of this case, we conclude that 
Bluffton hired the bus when Grandey procured the use of the bus in exchange for 
payment to Executive.  We also conclude that Niemeyer was driving the bus hired 
by Bluffton with Bluffton's permission because Executive had sought and 
Grandey had granted a request to allow Niemeyer to drive the bus.  Accordingly, 
we conclude that Niemeyer is an "insured" pursuant to the omnibus clause. 
Conclusion 
{¶ 14} We reverse the judgment of the court of appeals and remand the 
cause to the trial court for further proceedings. 
Judgment reversed 
and cause remanded. 
BROWN, C.J., and O’CONNOR and CANNON, JJ., concur. 
LANZINGER, J., concurs in judgment only. 
LUNDBERG STRATTON and O’DONNELL, JJ., dissent. 
TIMOTHY P. CANNON, J., of the Eleventh Appellate District, sitting for 
CUPP, J. 
__________________ 
LUNDBERG STRATTON, J., dissenting. 
{¶ 15} I respectfully dissent.  In order to insure a third party, the omnibus 
clause requires that the policyholder own, hire, or borrow a covered “auto.”  Both 
courts below agreed that reasonable minds could not differ in concluding that 
Bluffton did not “hire” the Executive Coach bus.  I agree. 
SUPREME COURT OF OHIO 
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{¶ 16} The omnibus clause of the Hartford policy does not apply to the 
facts of this case because Bluffton did not “hire” a bus or give “permission” to 
Jerome Niemeyer to drive.  Instead, as the trial court found, the evidence 
demonstrates that Bluffton contracted with Executive Coach for transportation 
services – and a bus and driver were incidental to the contract.  Executive chose a 
bus to provide Bluffton with transportation, and Executive hired Niemeyer to 
drive.  Although Executive worked to accommodate the requests of its client, 
ultimately, Executive was responsible for assigning a bus and a driver to provide 
transportation services to Bluffton.  Thus, Niemeyer was not an insured under the 
omnibus clause. 
{¶ 17} As the trial court concluded:  “Bluffton University’s use of the 
motor coach and any authority Bluffton had over the motor coach driver was 
always subject to the permission Executive Coach gave its driver and its customer 
Bluffton University to use the motor coach.”  Additionally, the court found that 
Bluffton could not use the bus in any manner that Executive Coach did not allow. 
{¶ 18} The majority’s narrow interpretation expands the scope of 
coverage beyond what the parties to the insurance policy intended.  Although the 
majority considers the parties’ intent immaterial, 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 
effect.” Burris v. Grange Mut. Cos. (1989), 46 Ohio St.3d 84, 89, 545 N.E.2d 83.  
We have held that provisions in an insurance contract that are reasonably 
susceptible of more than one interpretation will be construed liberally in favor of 
the insured, King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208, 519 N.E.2d 
1380, syllabus.  See also Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-
Ohio-5849, 797 N.E.2d 1256, ¶ 13.  But this “ ‘rule will not be applied so as to 
January Term, 2010 
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provide an unreasonable interpretation of the words of the policy.’ ” Id. at ¶ 14, 
quoting Morfoot v. Stake (1963), 174 Ohio St. 506, 23 O.O.2d 144, 190 N.E.2d 
573, paragraph one of the syllabus. 
{¶ 19} Today’s opinion unreasonably extends coverage to a third party 
and effectively opens the door for similar claims under other scenarios because the 
omnibus clause is standard in many insurance policies.  For example, in its brief, 
appellee American Alternative Insurance Corporation applies the majority’s 
interpretation to the following scenarios:  An attorney hails a taxi and asks the 
driver to drive her to the airport.  On the way, the driver loses control of the taxi 
and negligently causes an accident that injures numerous people.  Or a bride and 
groom climb into a waiting limousine to get to their reception.  The chauffer falls 
asleep at the wheel and causes an accident.  Finally, a church contracts with a bus 
company to transport its members to a social event.  The bus driver causes an 
accident on the way. 
{¶ 20} Based on the majority’s interpretation of the omnibus clause, the 
taxi company, limousine company, bus company, and their drivers could rely on 
the customer’s liability insurance to supplement their own coverage because there 
is little to distinguish these examples from the facts in this case.  But the drivers in 
these situations are not intended to be insured under the omnibus clause of a 
customer’s liability policy. 
{¶ 21} I believe that the trial court properly interpreted the omnibus clause 
in the Hartford policy and concluded that Niemeyer was not an insured at the time 
of the accident:  “Bluffton had contracted with Executive Coach for services and 
the bus was only incident to said contract.  Bluffton therefore hired Executive 
Coach to provide charter service.”  Therefore, “Bluffton College could not be 
found to have owned, hired, or borrowed the vehicle at the time of the accident.” 
SUPREME COURT OF OHIO 
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{¶ 22} Consequently, I respectfully dissent and would affirm the judgment 
of the court of appeals. 
O’DONNELL, J., concurs in the foregoing opinion. 
__________________ 
Gallagher Sharp, D. John Travis,  and Gary L. Nicholson, for appellee 
Federal Insurance Company. 
Crabbe, Brown & James, Steven B. Ayers, and Robert C. Buchbinder; and 
Bates & Carey, L.L.P. and Daniel I. Graham Jr., for appellee American 
Alternative Insurance Corp. 
Cubbon & Associates Co., L.P.A., and James E. Yavorcik, for appellant 
Timothy E. Berta. 
Connelly, Jackson & Collier, L.L.P., Steven R. Smith, Steven P. Collier, 
Janine T. Avila, and Adam S. Nightingale, for appellant Feroen J. Betts. 
Transportation Injury Law Group, P.L.L.C., and Douglas Desjardins, for 
appellant Geneva Williams. 
Dyer, Garofalo, Mann & Schultz and John Smalley, for appellants Kim 
Askins and Jeffrey E. Holp. 
Robison, Curphey & O'Connell and David W. Stuckey, for appellant 
Caroline Arend. 
______________________