Title: Hacker v. Dickman

State: ohio

Issuer: Ohio Supreme Court

Document:

Hacker et al., Appellees, v. Dickman et al.; State Auto Insurance Companies et 
al., Appellants. 
[Cite as Hacker v. Dickman (1996),  ________ Ohio St.3d ________.] 
Insurance -- Contract language using pronouns “you” and “your” not 
ambiguous when definitions section of policy defines the terms. 
 
-- 
 
(No. 94-2400 -- Submitted November 14, 1995 -- Decided March 4, 
1996.) 
 
CERTIFIED by the Court of Appeals for Erie County, No E-93-65. 
 
This appeal stems from Charles and Dianne Hacker’s (“Hackers”) 
supplemental petition filed under R.C. 3929.06 against Southern Home 
Insurance Company and State Auto Insurance Companies (collectively “State 
Auto”).  With their petition, the Hackers sought to have the insurance provided 
under Gary L. Dickman's (“Gary”) automobile liability insurance contract with 
State Auto applied to the satisfaction of a judgment in their favor against Judith 
Dickman (“Judith”), Gary’s wife. 
 
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The underlying liability suit involved a 1973 Chevrolet pickup truck 
jointly owned by Gary and his neighbor, Walter Swiger.  In December 1985, 
Gary was driving the truck when it collided with Charles Hacker’s vehicle.  At 
the time of the accident, Judith was a passenger in the truck.   
 
The Hackers sued, among others, Gary and Judith Dickman for the 
bodily injuries Charles Hacker sustained and for Dianne Hacker’s loss of 
consortium.  During discovery, Judith admitted that at the time of the collision, 
Gary was serving as her agent.  The case proceeded to trial and the jury 
returned verdicts in the aggregate amount of $820,000 against Gary and Judith, 
jointly. 
 
The Hackers focused on obtaining satisfaction of the judgment from 
State Auto. State Auto and Gary were parties to an automobile liability 
insurance contract, in which Gary was the “named insured,” but in which the 
1973 truck was not a “covered auto.”  The insurance policy provided a 
maximum of five hundred thousand dollars bodily injury coverage.  In a 
separate declaratory judgment action, the trial court had declared that the  
 
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policy did not provide Gary with liability coverage for his use of the 1973  
truck. 
 
Seeking to recover on the State Auto policy for the liability of Judith, the 
Hackers filed this case, a supplemental petition pursuant to R.C. 3929.06. Both 
State Auto and the Hackers moved for summary judgment. The Hackers 
claimed that even though Gary was not covered under the insurance policy, the 
policy extended liability coverage to Judith for the judgment rendered against 
her.  State Auto contended that Judith was excluded from coverage under the 
same policy exclusion which denied coverage to Gary.   The exclusion reads, in 
pertinent part: 
“B.  We do not provide Liability Coverage for the ownership, 
maintenance  or use of: 
“ *** 
“2.  Any vehicle, other than your covered auto, which is: 
“a.  owned by you ***.”   
 
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The trial court granted the Hackers’ motion for summary judgment and State 
Auto appealed. 
 
The court of appeals affirmed.  Its opinion was limited to a determination 
that State Auto’s interpretation of the policy required a strained and 
unreasonable interpretation and that “given the common and ordinary meaning 
of the insurance policy, the exclusionary clause” did not apply to Judith 
Dickman.  Finding that its decision was in conflict with that pronounced by the 
Seventh Appellate District in Webster v. Royal Ins. Co. of Am. (Apr. 9, 1990), 
Mahoning App. No. 89 C.A. 13, unreported, the court of appeals entered an 
order certifying a conflict.  This cause us now before this court upon our 
determination that a conflict exists. 
 
Murray & Murray Co., L.P.A., W. Patrick Murray and Steven C. Bechtel, 
for appellees. 
 
Flynn, Py & Kruse, L.P.A., John A. Coppeler and Randolph E. Digges, 
III, for appellants. 
 
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COOK, J.  In this case we consider the argument that a clause in an 
insurance policy which employs the pronoun “you” may have different 
meanings, depending on the perspective and circumstances of the particular 
“covered person” reading it. We reject such a proposition in favor of according 
to pronouns in a contract applicable to more than one person, a uniform  
meaning consistent with policy definitions. 
 
It is well-settled law in Ohio that “[w]here provisions of a contract of 
insurance are reasonably susceptible of more than one interpretation, they will 
be construed strictly against the insurer and liberally in favor of the insured.”  
(Emphasis added.) King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208,    
519 N.E.2d 1380, syllabus; see, also, Buckeye Union Ins. Co. v. Price (1974), 
39 Ohio St.2d 95, 68 O.O.2d 56, 313 N.E.2d 844.  It is axiomatic that this rule 
can not be employed to create ambiguity where there is none.  It is only when a 
provision in a policy is susceptible to more than one reasonable interpretation 
that an ambiguity exists in which the provision must be resolved in favor of the 
insured. 
 
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In the present case, both State Auto and the Hackers acknowledge that 
Judith Dickman was a “covered person” under Gary’s automobile insurance 
policy and that the Chevrolet truck was not a “covered auto.”  State Auto, 
therefore, maintains that Judith’s use of the 1973 truck was unambiguously 
excluded from coverage by the  clause in its contract with Gary, denying 
coverage for the use of a vehicle unlisted in the declaration section of the 
policy as a “covered auto” which is “owned by you.” 
 
The pronouns “you” and “your” are defined in the policy. 
“Throughout this policy, ‘you’ and ‘your’ refer to: 
“1.  The ‘named insured’ shown in the Declarations; and 
“2.  The spouse if a resident of the same household.”  
In urging this court find the (B)(2) exclusion ambiguous, the Hackers 
argue that the words “you” and “your” should be given their ordinary and 
commonly understood meaning and that each covered person under the policy 
has a right to read the contract and assume that the word “you” applies in a 
particularized way to that person.  Thus, the Hackers argue that when Judith 
 
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read this exclusion, she would have reasonably concluded that, the phrase 
“owned by you” did not exclude her from coverage because Gary and the 
neighbor owned the truck, and she did not.   
 
The Hackers’ argument, however, would obviate the policy’s definition 
of “you.”  The policy definition requires that “you” references both Gary as the 
named insured and Judith as the resident spouse. Judith, therefore, can not 
reasonably claim that “owned by you,” when she reads it, does not encompass 
the circumstance of Gary’s ownership as the named insured which triggers the 
exclusion.  The only reasonable interpretation of the exclusion language with 
the  policy’s definition of “you” is that, State Auto does not cover the use of a 
vehicle not listed in the declarations which is owned by the named insured, and 
State Auto does not cover the use of a vehicle not listed in the declarations 
which is owned by a resident spouse.   Judith’s liability arises from the use of a 
vehicle not declared in the policy but which was owned by Gary, one of the 
two alternatives listed in the definition of “you.”  Inasmuch as one of the 
 
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alternatives of the definition of “you” avails to implicate the exclusion, 
coverage is not provided for this incident for Judith.     
 
The derivative nature of Judith’s coverage supports this analysis;  that is, 
she is covered as a consequence of being a resident spouse, and likewise, the 
application of the exclusion is derivative from Gary as the named insured. 
 
The Hacker’s put forth an alternative basis for claiming that this court 
must interpret the exclusion in her favor.  The Hackers argue that under the 
policy’s definition of “you,” the named insured and the resident spouse are one 
entity.  In other words, “you” means Gary and Judith Dickman jointly or 
collectively.  According to that reading, unless the 1973 truck was owned by 
both Judith and Gary, the exclusion is inapplicable. 
 
A reasonable reading of the definitions section of the policy  belies this 
interpretation.  Instead, in defining “you,” the policy specifically uses the 
words “Throughout this policy ‘you’ and ‘your’ refer to ***” which allows for 
the reading of the alternatives that follow, as being just that, alternatives.  If 
either alternative is applicable, the exclusion must be applied.  The Hackers’ 
 
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argument would result in excluding liability coverage for the named insured 
alone or for the resident spouse alone.  Stretching the policy’s use of “and” to 
that extreme would not be a reasonable interpretation of the policy.   
 
Given that the policy language of the (B)(2) exclusion is susceptible to 
only one meaning when read with the policy’s definitions, we must reverse the 
judgment of the court of appeals and find that no coverage is afforded Judith 
Dickman under Gary’s State Auto contract for the accident with Charles 
Hacker.   
 
 
 
 
 
 
 
Judgment reversed. 
 
MOYER, C.J., WRIGHT and FARMER, JJ., concur. 
 
DOUGLAS and PFEIFER, JJ., dissent. 
 
F.E. SWEENEY, J., dissents and would affirm the court of appeals in toto. 
 
SHEILA G. FARMER, J., of the Fifth Appellate District, sitting for RESNICK, 
J.