Court Opinion

ID: 2706565
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:50:17.930134+00
Date Added: 2024-06-11T12:33:26.257866
License: Public Domain

[Cite as Roberts v. Reyes, 2011-Ohio-2608.]

STATE OF OHIO                     )                   IN THE COURT OF APPEALS
                                  )ss:                NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN                  )

CRYSTAL ROBERTS, et al.                               C.A. No.      10CA009821

        Appellants

        v.                                            APPEAL FROM JUDGMENT
                                                      ENTERED IN THE
DAVID C. REYES, et al.                                COURT OF COMMON PLEAS
                                                      COUNTY OF LORAIN, OHIO
        Appellees                                     CASE No.   03CV134243

                                 DECISION AND JOURNAL ENTRY

Dated: May 31, 2011

        CARR, Presiding Judge.

        {¶1}     Appellants, Chrystal Roberts and her mother (collectively “Roberts”), appeal

from a judgment of the Lorain County Court of Common Pleas that granted summary judgment

to State Farm Insurance Company, finding that State Farm had no obligation to defend or

indemnify David or Iris Reyes against Roberts’ claims against them. This Court affirms.

                                                 I.

        {¶2}     On July 18, 2001, sixteen-year-old Chrystal Roberts sustained physical injuries

when she was struck by a pick-up truck negligently operated by David Reyes. Reyes was

driving a vehicle that was owned by his wife, Iris Reyes. Iris Reyes insured the pick-up truck

and was the named insured under an automobile insurance policy with State Farm Insurance

Company.

        {¶3}     Roberts, through her mother, filed this action, seeking recovery for the injuries

she had sustained in the accident. This case has had a lengthy history, involving other parties
                                                 2

and a prior appeal to this Court, much of which is not relevant to this appeal. See Roberts v.

Reyes, 9th Dist. No. 09CA009576, 2010-Ohio-1086. Roberts filed a claim against David Reyes

for negligently operating a vehicle and against Iris Reyes for negligently entrusting her vehicle to

David.

         {¶4}   State Farm filed a separate declaratory judgment action that was later

consolidated with Roberts’ case. State Farm sought a declaration that it had no duty to defend or

indemnify Iris or David Reyes against Roberts’ claims against them. It maintained that the

policy held by Iris Reyes included a Driver Exclusion Endorsement that explicitly excluded any

coverage for damages caused if a vehicle was operated by David Reyes and, therefore, it

excluded any coverage for David’s negligent operation of the vehicle and Iris’s alleged negligent

entrustment of the vehicle to him.

         {¶5}   State Farm moved for summary judgment on its declaratory judgment action,

maintaining that, pursuant to the policy’s Driver Exclusion Endorsement, it had no duty to

defend or indemnify either of the Reyeses against Roberts’ claims. Although the trial court

initially denied State Farm’s motion, it eventually granted State Farm summary judgment upon

reconsideration. After this Court dismissed Roberts’ prior appeal for lack of a final, appealable

order because Roberts’ claims against the Reyeses were still pending, the trial court issued a new

ruling on the summary judgment motion that included a finding that “there is no just reason for

delay pursuant to Civil Rule 54(B)[.]” Roberts appeals and raises two assignments of error,

which will be addressed together for ease of discussion.

                                                II.

                                 ASSIGNMENT OF ERROR I

         “THE INCOMPLETE AND DEFICIENT ‘DRIVER EXCLUSION
         AGREEMENT’ DEMONSTRATES THAT A GENUINE DISPUTE EXISTS
                                                3

        OVER A MATERIAL FACT AS TO THE VALIDITY OF THE PUTATIVE
        ‘DRIVER EXCLUSION AGREEMENT[.]’”

                                ASSIGNMENT OF ERROR II

        “THE TRIAL COURT ERRED IN RULING THAT APPELLEE IRIS REYES’
        NEGLIGENT ENTRUSTMENT OF HER CHEVROLET PICK-UP TRUCK
        WAS NOT COVERED UNDER THE LIABILITY PORTION OF THE
        APPELLEE IRIS REYES’ STATE FARM POLICY[.]”

        {¶6}    Roberts argues that the trial court erred in granting summary judgment to State

Farm and declaring that it had no duty to defend or indemnify Iris or David Reyes in this action.

This Court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co. (1996),

77 Ohio St.3d 102, 105. This Court applies the same standard as the trial court, viewing the facts

in the case in the light most favorable to the non-moving party and resolving any doubt in favor

of the non-moving party. Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 12. Pursuant

to Civ.R. 56(C), summary judgment is proper if:

        “(1) [N]o 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
        the evidence that reasonable minds can come to but one conclusion, and viewing
        the evidence most strongly in favor of the nonmoving party, that conclusion is
        adverse to the nonmoving party.” State ex. rel. Howard v. Ferreri (1994), 70
        Ohio St.3d 587, 589.

        {¶7}    Through its motion for summary judgment, State Farm pointed to the

endorsement in Iris Reyes’s policy that explicitly excluded all coverage under the policy if the

loss was caused by David Reyes driving any vehicle and argued that the exclusion relieved it of

any duty to defend or indemnify David or Iris Reyes. In opposition, Roberts did not specifically

address the applicability of the exclusion, but instead pointed to the broad coverage language of

Iris’ policy.

        {¶8}    On appeal, Roberts raises one argument that is not relevant, that Iris Reyes was

negligent in allowing David Reyes to drive her car, and another that she did not raise in
                                                   4

opposition to State Farm’s motion for summary judgment, that there were disputed facts about

whether Iris and David agreed to a driver exclusion that explicitly excluded David Reyes and/or

whether they understood its effect. In opposition to summary judgment, Roberts failed to raise

any arguments to dispute that Iris and David Reyes agreed to the Driver Exclusion Endorsement.

She did not dispute State Farm’s evidence that Iris Reyes testified that she was aware of the

exclusion in the State Farm policy and understood its effect: “Well, the exclusion, I know that

[David] couldn’t drive the truck.”

       {¶9}    Although both parties now dispute whether there was evidence before the trial

court about the Driver Exclusion Agreement signed by David and Iris Reyes and the significance

of that evidence, because Roberts failed to raise that issue in opposition to summary judgment,

this Court need not address it now. “Although this Court conducts a de novo review of summary

judgment, it is nonetheless a review that is confined to the trial court record. The parties are not

given a second chance to raise arguments that they should have raised below.” (Emphasis in

original.) Owens v. French Village Co. (Aug. 18, 1999), 9th Dist. No. 98CA0038.

       {¶10} Roberts has never disputed State Farm’s summary judgment evidence that Iris

Reyes’s State Farm policy did, in fact, include a Driver Exclusion Endorsement.                The

construction of an insurance policy is a matter of law and it is presumed that the intent of the

parties is reflected in the language of the insurance policy. Westfield Ins. Co. v. Galatis, 100

Ohio St.3d 216, 2003-Ohio-5849, at ¶11; Long Beach Assn., Inc. v. Jones (1998), 82 Ohio St.3d

574, 576. “When the language of a written contract is clear, a court may look no further than the

writing itself to find the intent of the parties.” Galatis at ¶11.

       {¶11} Even if extrinsic evidence of the Reyeses’ intent had been before the trial court on

summary judgment, the court had no need to look beyond the language of the insurance policy
                                                   5

unless it found it to be ambiguous on this coverage issue. Therefore, this Court must first

determine whether the trial court correctly concluded that the Driver Exclusion Endorsement in

Iris Reyes’s State Farm insurance policy unambiguously precluded State Farm’s duty to defend

or indemnify Iris or David Reyes in this action.

       {¶12} The Driver Exclusion Endorsement in this policy provided:

       “IN CONSIDERATION OF THE PREMIUM CHARGED FOR YOUR POLICY
       ITS IS AGREED WE SHALL NOT BE LIABLE AND NO LIABILITY OR
       OBLIGATION OF ANY KIND SHALL ATTACH TO US FOR BODILY
       INJURY, LOSS OR DAMAGE UNDER ANY OF THE COVERAGES OF THE
       POLICY WHILE ANY MOTOR VEHICLE IS OPERATED BY

       “DAVID REYES”

       {¶13} State Farm argued to the trial court that, because David Reyes, the excluded

driver, was operating the motor vehicle that injured Roberts, it had no liability for bodily injury,

loss or damage under any provision of the policy. State Farm cited Ohio case law to support its

argument that, given the language of the exclusion, it had no obligation to defend or indemnify

either David Reyes for his negligent operation of the vehicle or Iris Reyes for her alleged

negligent entrustment of the vehicle to him. See Brunner v. State Farm Mut. (May 20, 1994),

6th Dist. No. S-93-41; Childers v. Motorists Mut. Ins. Co. (Aug. 24, 1990), 11th Dist. No. 89-L-

14-030. Although Brunner and Childers include little reasoning to support their decisions, this

Court’s research revealed numerous cases from other jurisdictions that did.

       {¶14} Courts in other states have consistently held that similar driver exclusions in

automobile insurance policies preclude any coverage for the excluded driver’s negligent

operation of the insured vehicle as well as coverage for the vehicle owner’s negligent

entrustment of the vehicle to the excluded driver. The Maryland Court of Appeals began its

analysis with a focus on the purpose behind the driver exclusion provision:
                                                 6

       “The purpose of the provision is to allow a family automobile to remain insured,
       instead of having the insurance policy cancelled, by excluding from the insurance
       policy a member of the household whose driving record would have warranted a
       cancellation of the policy. Allowing a driver to be specifically excluded avoids
       cancellation or non-renewal of policies and permits the other family members to
       retain the required security on the family car.” Neale v. Wright (1991), 585 A.2d
       196, 202.

Maryland’s highest court concluded that “[i]f the insurer of the family car were still liable under

the policy if the excluded driver operates the vehicle, on a theory of negligent entrustment by the

non-excluded insured spouse, the purpose of the named driver exclusion provision would be

defeated.” Id.

       {¶15} The Oklahoma Supreme Court followed the reasoning of Neale and several other

decisions that “to permit liability for negligent entrustment of a vehicle to the driver named in the

exclusion would be forcing an insurer to accept a risk not bargained for and for which no

additional premium had been paid.” Pierce v. Oklahoma Property and Cas. Ins. Co. (1995), 901

P.2d 819, 824. Likewise, a Louisiana appellate court reasoned that whether the claim is one for

the excluded driver’s negligence in operating the vehicle or for the owner’s negligent

entrustment of the vehicle to him, “the alleged liability arose while [the excluded driver] was

operating a covered auto and was thus excluded from coverage under the policy.”                Natl.

Automotive Ins. Co. v. Castleman (2007), 968 So.2d 819, 823. To conclude otherwise “would

unjustly deprive the insurer of the benefit of its bargain to allow an insured to purchase a vehicle

liability policy with an excluded driver endorsement, proceed to permit the excluded driver to

drive the insured vehicle, and then reap the benefits of the policy.” Id.

       {¶16} This Court was unable to find any legal authority that has construed insurance

policy driver exclusions to the contrary, i.e. that, despite the exclusion, the insurer has a duty to

defend or indemnify either the excluded driver or the vehicle owner for negligent entrustment of
                                                 7

the vehicle to him. Consequently, the trial court correctly concluded that State Farm had no duty

to defend or indemnify Iris or David Reyes and was entitled to summary judgment on its

complaint for declaratory judgment. The assignments of error are overruled.

                                                III.

       {¶17} The assignments of error are overruled. The judgment of the Lorain County

Court of Common Pleas is affirmed.

                                                                              Judgment affirmed.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of

this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellants.

                                                       DONNA J. CARR
                                                       FOR THE COURT

WHITMORE, J.
MOORE, J.
CONCUR
                                           8

APPEARANCES:

MICHAEL J. DUFF, Attorney at Law, for Appellants.

WALTER H. KROHNGOLD, Attorney at Law, for Appellee.

CLARK D. RICE, Attorney at Law, for Appellee.

DAVID C. REYES, pro se, Appellee.