Court Opinion

ID: 2971408
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:34:40.129078+00
Date Added: 2024-06-11T15:01:46.833369
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206                         2    Posante v. Cambridge                      No. 02-4383
        ELECTRONIC CITATION: 2004 FED App. 0301P (6th Cir.)                     Mutual Fire Ins. Co., et al.
                    File Name: 04a0301p.06
                                                                                              _________________
UNITED STATES COURT OF APPEALS                                                                     COUNSEL
                  FOR THE SIXTH CIRCUIT                                    ON BRIEF: James L. Deese, Cleveland, Ohio, Mark L.
                    _________________                                      Wakefield, LOWE, EKLUND, WAKEFIELD &
                                                                           MULVIHILL, Cleveland, Ohio, for Appellant. Ronald A.
 TONY POSANTE ,                    X                                       Risbo, Carol K. Metz, WESTON, HURD, FALLON,
          Plaintiff-Appellant,      -                                      PAISLEY & HOWLEY, Cleveland, Ohio, Timothy John
                                    -                                      Fitzgerald, GALLAGHER, SHARP, FULTON & NORMAN,
                                    -  No. 02-4383                         Cleveland, Ohio, for Appellees.
            v.                      -
                                     >                                                        _________________
                                    ,
 CAMBRIDGE MUTUAL FIRE              -
 INSURANCE COMPANY ;                                                                              OPINION
                                    -                                                         _________________
 LUMBERMENS MUTUAL                  -
 CASUALTY COMPANY ,                 -                                        BOYCE F. MARTIN, JR., Circuit Judge. This appeal
         Defendants-Appellees. -                                           concerns the availability of underinsured motorist coverage
                                    -                                      under Ohio law. The Ohio Supreme Court recently issued a
                                   N                                       landmark decision in Westfield Insurance Co. v. Galatis, 797
       Appeal from the United States District Court                        N.E.2d 1256 (Ohio 2003), which changed and clarified the
      for the Northern District of Ohio at Cleveland.                      law in a way that is dispositive of this case.
   No. 01-01617—Solomon Oliver, Jr., District Judge.
                                                                             Tony Posante, a former employee of Pepsico, Inc., seeks a
                     Submitted: June 8, 2004                               declaration that Pepsico’s insurer, Lumbermens Mutual
                                                                           Casualty Company, is liable for underinsured motorist
            Decided and Filed: September 8, 2004                           coverage in connection with an accident in which his
                                                                           daughter, Ashley Posante, was struck and killed by an
 Before: MARTIN and SUTTON, Circuit Judges; QUIST,                         automobile as she was crossing a street. Mr. Posante settled
                  District Judge.*                                         claims against the driver’s insurance carrier, State Farm
                                                                           Insurance Company, as well as with Mr. Posante’s own
                                                                           homeowner’s insurance carrier, Cambridge Mutual Insurance
                                                                           Company. The availability of underinsured motorist coverage
                                                                           under the Lumbermens policy is the sole subject of this
                                                                           lawsuit.
    *
     The Honorable Gordon J. Quist, United States District Judge for the
W estern D istrict of M ichigan, sitting by de signation.

                                   1
No. 02-4383                     Posante v. Cambridge          3    4    Posante v. Cambridge                       No. 02-4383
                             Mutual Fire Ins. Co., et al.               Mutual Fire Ins. Co., et al.

  Mr. Posante’s claim for underinsured motorist coverage is        differentiated between coverage under the Ohio Uninsured
based upon Scott-Pontzer v. Liberty Mutual Fire Insurance          Motorist Coverage Endorsement and coverage that is imposed
Co., 710 N.E.2d 1116 (Ohio 1999), and Ezawa v. Yasuda Fire         by operation of law. See In re Uninsured and Underinsured
& Marine Ins. Co. of America, 715 N.E.2d 1142 (Ohio 1999).         Motorist Coverage Cases, 798 N.E.2d 1077 (Ohio 2003). See
The Ohio Supreme Court’s recent decision in Galatis,               also Jones v. Fed. Ins. Co., No. 2003CA 00075, 2003 WL
however, significantly restricted the availability of              22961343 (Ohio App. Dec. 15, 2003) (denying coverage
underinsured motorist coverage under Scott-Pontzer, and            based upon Galatis and explaining that “[e]ven though
expressly overruled Ezawa. Galatis held as follows:                Galatis deals with the definition of an insured when there is
                                                                   express UM/UIM coverage, the reasoning was applied to
  Absent specific language to the contrary, a policy of            UM/UIM coverage which arises by operation of law”) (citing
  insurance that names a corporation as an insured for             In re Uninsured and Underinsured Motorist Coverage Cases,
  uninsured or underinsured motorist coverage covers a             798 N.E.2d 1077). Therefore, contrary to Mr. Posante’s
  loss sustained by an employee of the corporation only if         assertions, Galatis governs our analysis of his claim.
  the loss occurs within the course and scope of
  employment. Additionally, where a policy of insurance              Although Galatis was decided after the district court’s
  designates a corporation as a named insured, the                 judgment was entered, Lumbermen’s motion for summary
  designation of ‘family members’ of the named insured as          judgment was nevertheless granted on a different ground –
  ‘other insureds’ does not extend insurance coverage to a         namely, that Mr. Posante had breached a condition precedent
  family member of an employee of the corporation, unless          to coverage. While we pass no judgment on the rationale
  that employee is also a named insured.                           employed by the district court, we hold that summary
                                                                   judgment in favor of Lumbermens was proper because Mr.
Galatis, 797 N.E.2d at 1271 (emphasis added). See also             Posante’s claim for underinsured motorist coverage is
Masco Corp. v. Zurich Am. Ins. Co., ___ F.3d ___, 2004 WL          foreclosed by Galatis. Accordingly, the district court’s
1924045, n.1 (6th Cir. Aug. 31, 2004) (recognizing the             judgment is AFFIRMED.
restrictions that Galatis places upon the availability of Scott-
Pontzer uninsured and underinsured motorist coverage). It is
clear that Mr. Posante’s claim for underinsured motorist
coverage is not viable under Galatis.
  Mr. Posante argues, however, that we should not apply
Galatis in this case because: (1) the decision “represents a
substantive departure from established precedent;” and (2) it
“applies only to coverage under the ambiguous Ohio
Uninsured Motorist Coverage Endorsement . . . [and] not to
the coverage imposed by operation of law that [Mr. Posante]
has sought.” These arguments lack merit. The Ohio Supreme
Court has applied Galatis to bar coverage in cases that were
pending at the time the decision was issued, and has not