Tony Posante v. Cambridge Mutual Fire Insurance Company; Lumbermens Mutual Casualty Company

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

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No. 02-4383 Posante v. Cambridge
Mutual Fire Ins. Co., et al.
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Mr. Posante’s claim for underinsured motorist coverage is
based upon Scott-Pontzer v. Liberty Mutual Fire Insurance
Co., 710 N.E.2d 1116 (Ohio 1999), and Ezawa v. Yasuda Fire
& Marine Ins. Co. of America, 715 N.E.2d 1142 (Ohio 1999).
The Ohio Supreme Court’s recent decision in Galatis,
however, significantly restricted the availability of
underinsured motorist coverage under Scott-Pontzer, and
expressly overruled Ezawa. Galatis held as follows:
Absent specific language to the contrary, a policy of
insurance that names a corporation as an insured for
uninsured or underinsured motorist coverage covers a
loss sustained by an employee of the corporation only if
the loss occurs within the course and scope of
employment. Additionally, where a policy of insurance
designates a corporation as a named insured, the
designation of ‘family members’ of the named insured as
‘other insureds’ does not extend insurance coverage to a
family member of an employee of the corporation, unless
that employee is also a named insured.
Galatis, 797 N.E.2d at 1271 (emphasis added). See also
Masco Corp. v. Zurich Am. Ins. Co., ___ F.3d ___, 2004 WL
1924045, n.1 (6th Cir. Aug. 31, 2004) (recognizing the
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
4 Posante v. Cambridge
Mutual Fire Ins. Co., et al.
No. 02-4383
differentiated between coverage under the Ohio Uninsured
Motorist Coverage Endorsement and coverage that is imposed
by operation of law. See In re Uninsured and Underinsured
Motorist Coverage Cases, 798 N.E.2d 1077 (Ohio 2003). See
also Jones v. Fed. Ins. Co., No. 2003CA 00075, 2003 WL
22961343 (Ohio App. Dec. 15, 2003) (denying coverage
based upon Galatis and explaining that “[e]ven though
Galatis deals with the definition of an insured when there is
express UM/UIM coverage, the reasoning was applied to
UM/UIM coverage which arises by operation of law”) (citing
In re Uninsured and Underinsured Motorist Coverage Cases,
798 N.E.2d 1077). Therefore, contrary to Mr. Posante’s
assertions, Galatis governs our analysis of his claim.
Although Galatis was decided after the district court’s
judgment was entered, Lumbermen’s motion for summary
judgment was nevertheless granted on a different ground –
namely, that Mr. Posante had breached a condition precedent
to coverage. While we pass no judgment on the rationale
employed by the district court, we hold that summary
judgment in favor of Lumbermens was proper because Mr.
Posante’s claim for underinsured motorist coverage is
foreclosed by Galatis. Accordingly, the district court’s
judgment is AFFIRMED.

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