Darrel Henry v. Wausau Business Insurance Co.

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0430P (6th Cir.)
File Name: 03a0430p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
DARREL HENRY,
Plaintiff-Appellee/
Cross-Appellant,
v.
WAUSAU BUSINESS
INSURANCE CO.,
Defendant-Appellant/
Cross-Appellee.
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Nos. 01-4105/4223
Appeal from the United States District Court
for the Southern District of Ohio at Cincinnati.
No. 00-00642—Herman J. Weber, District Judge.
Argued: August 1, 2003
Decided and Filed: December 8, 2003
Before: KENNEDY, GILMAN, and GIBBONS, Circuit
Judges.
_________________
COUNSEL
ARGUED: Brian L. Wildermuth, LAW OFFICES OF
NICHOLAS E. SUBASHI, Dayton, Ohio, for Appellant.
2 Henry v. Wausau
Business Ins. Co.
Nos. 01-4105/4223
Michael Robert Thomas, PRATT, SINGER & THOMAS,
Middleton, Ohio, for Appellee. ON BRIEF: David J. Arens,
LAW OFFICES OF NICHOLAS E. SUBASHI, Dayton,
Ohio, for Appellant. Michael Robert Thomas, PRATT,
SINGER & THOMAS, Middleton, Ohio, for Appellee.
_________________
OPINION
_________________
JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-
appellee/cross appellant Darrel Henry’s wife, Carol Henry,
was killed in an automobile accident. At the time of her
death, Carol Henry was an employee of the Madison Local
School District (Madison). Henry filed insurance claims
pursuant to the uninsured and underinsured (UM/UIM)
motorist provisions in a business automobile liability
insurance policy and an education liability insurance policy
issued to Madison by defendant-appellant/cross-appellee
Wausau Business Insurance Company (Wausau). Wausau
denied coverage and Henry sued seeking a declaratory
judgment that Carol Henry was covered by the Wausau
policies at the time of her accident. The parties filed cross-
motions for summary judgment. The district court denied
Wausau’s motion with respect to Henry’s claims under the
business automobile policy and granted summary judgment
in favor of Henry. The district court granted Wausau’s
motion for summary judgment with respect to Henry’s
claims under the education liability policy on the grounds that
the policy was not subject to Ohio Revised Code (O.R.C.)
§ 3937.18's requirement that the insurer offer UM/UIM
coverage. For the reasons set forth below, we reverse in part,
affirm in part, and remand the case for further proceedings
consistent with this opinion.

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Nos. 01-4105/4223 Henry v. Wausau
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I.
On September 21, 1998, Carol Henry was killed when an
automobile driven by Todd J. Hyde, Sr. collided with the
vehicle she was operating. The sole cause of the accident was
Hyde’s negligence. Hyde did not have automobile liability
insurance covering him for the operation of the vehicle
involved in the collision. At the time of the accident, Carol
Henry was an employee of the Madison Local School
District. Wausau had issued a business automobile policy of
insurance to Madison that was in full force and effect on the
date of the accident. The policy was issued for the period of
September 1, 1998, to September 1, 1999. Madison also had
an education liability policy of insurance with Wausau that
was in full force and effect on the date of the accident.
At the time of the accident, Carol Henry maintained an
automobile insurance policy with Westfield Insurance
Company that included both liability coverage and uninsured
motorist coverage. Darrel Henry settled with Westfield for
$100,000.00, the uninsured motorist coverage limit.
Although Carol Henry was not acting in the scope of her
employment and was driving her own vehicle when the
accident occurred, Darrel Henry also sought UM/UIM
coverage under both of Wausau’s policies. Wausau denied
coverage under the policies.
On June 27, 2000, Darrel Henry sued Wausau in the Butler
County, Ohio Court of Common Pleas. Henry sought a
declaratory judgment against Wausau seeking recovery of
uninsured motorist benefits under the business automobile
liability policy and the education liability policy. Wausau
removed the case to the United States District Court for the
Southern District of Ohio on the basis of diversity
jurisdiction.
The parties filed stipulations of fact and then filed cross-
motions for summary judgment. On September 27, 2001, the
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Nos. 01-4105/4223
district court granted summary judgment in favor of Wausau
as to Henry’s claims under the education liability policy on
the grounds that the policy was not subject to O.R.C.
§ 3937.18’s requirement that the insurer offer UM/UIM
coverage, but denied Wausau’s request for summary
judgment on Henry’s claims under the business automobile
policy. The district court granted summary judgment in favor
of Henry on the business automobile policy and referred the
case to binding arbitration on the issue of damages under that
policy.
On October 4, 2001, Henry filed a motion for certification
of questions of law to the Ohio Supreme Court. On
October 12, 2001, Wausau filed a timely notice of appeal
regarding the district court’s summary judgment rulings. The
district court denied Henry’s motion to certify on October 24,
2001. On October 29, 2001, Henry filed a notice of appeal.
II.
This court reviews de novo a district court’s grant of a
motion for summary judgment. Braithwaite v. Timken Co.,
258 F.3d 488, 492-93 (6th Cir. 2001). This court reviews for
an abuse of discretion an order denying summary judgment
on the grounds that there is a genuine issue of material fact;
however, if the denial is based on purely legal grounds, then
review of the denial is de novo. Garner v. Memphis Police
Dep’t., 8 F.3d 358, 363 (6th Cir. 1993)). When reviewing the
record, all inferences are to be drawn in the light most
favorable to the non-moving party. Braithwaite, 258 F.3d at
493 (citing Woythal v. Tex-Tenn Corp., 112 F.3d 243, 245-46
(6th Cir. 1997)). However, a party opposing a motion for
summary judgment “may not rest upon mere allegations or
denials of his pleading, but . . . must set forth specific facts
showing that there is a genuine issue for trial.” Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
The party opposing the motion must “do more than simply

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show that there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). “If after reviewing the record as a
whole a rational factfinder could not find for the nonmoving
party, summary judgment is appropriate.” Braithwaite, 258
F.3d at 493 (quoting Ercegovich v. Goodyear Tire & Rubber
Co., 154 F.3d 344, 349 (6th Cir. 1998)) (citation omitted).
III.
The district court had jurisdiction over this action pursuant
to 28 U.S.C. § 1332. Lee-Lipstreu v. Chubb Group Ins. Cos.,
329 F.3d 898, 899-900 (6th Cir. 2003) (holding that federal
courts have jurisdiction over actions by an insured against his
or her own insurance company if the two parties are diverse
because such actions are not direct actions within the meaning
of 28 U.S.C. § 1332(c)(1)). This court has appellate
jurisdiction to review the district court’s order granting
summary judgment pursuant to 28 U.S.C. § 1291.
Because the court is exercising its diversity jurisdiction in
the present case, the substantive law of Ohio is controlling.
Talley v. State Farm Fire & Cas. Co., 223 F.3d 323, 326 (6th
Cir. 2000) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64
(1938)). In determining questions of Ohio state law, the court
must follow the controlling decisions of the Ohio Supreme
Court. Id.
A. Business Automobile Liability Policy
Henry claims that his wife was an insured covered under
the Wausau business automobile policy pursuant to Scott-
Pontzer v. Liberty Mutual Fire Insurance Co., 710 N.E.2d
1116 (Ohio 1999), and therefore is entitled to UM/UIM
motorist coverage pursuant to Ohio law. Wausau contends
that Scott-Pontzer is not applicable because this case involves
a policy of insurance issued to a public school district, not a
private corporation.
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Business Ins. Co.
Nos. 01-4105/4223
Coverage under the UM/UIM provision at issue is limited
to an “insured,” a term defined in the provision as follows:
B. WHO IS AN INSURED
1. You.
2. If you are an individual, any “family member.”
3. Anyone else “occupying” a covered “auto” or a
temporary substitute for a covered “auto.” The covered
“auto” must be out of service because of its breakdown,
repair, servicing, loss or destruction.
4. Anyone for damages he or she is entitled to
recover because of “bodily injury” sustained by another
“insured.”
This definition is identical to the definition of “insured” in the
policy that was at issue in Scott-Pontzer.
In Scott-Pontzer, the Ohio Supreme Court ruled that a
corporation’s employees, even though they are not named
insureds, are considered insureds entitled to UM/UIM
coverage under a commercial automobile liability policy. 710
N.E.2d at 1119. According to the court, where the definition
of “insured” in a UM/UIM provision includes the term “You”
and the named insured is a corporation, the term “You” is
ambiguous. Applying the legal principle that ambiguous
provisions in an insurance contract will be “strictly construed
against the insurer,” the court held that the term “You” could
be construed to include the corporation’s employees because
a corporation can act only by and through live persons. Id. at
1119 (quoting King v. Nationwide Ins. Co., 519 N.E.2d 1380
(1988)). Moreover, the court concluded that, unless the
UM/UIM provision contained a specific limitation or
exclusion, the corporation’s employees were entitled to
UM/UIM coverage even when acting outside the scope of
their employment. Id. at 1120.
Henry argues that his wife was covered by the UM/UIM
provisions in Wausau’s business automobile liability policy

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even though she was not acting within the scope of her
employment at the time of her accident because the rationale
in Scott-Pontzer should be extended to business automobile
liability policies issued to public school districts. We find it
unnecessary to address this argument due to the Ohio
Supreme Court’s recent decision in Westfield Insurance
Company v. Galatis, et al., No. 2002-0932, 2003 WL
22461833, *13 (Ohio Nov. 5, 2003). Westfield limits the
holding of Scott-Pontzer so that it now applies only in those
situations where an employee is acting within the course and
scope of her employment at the time of the accident. Id. The
parties in this case agree that Carol Henry was not acting
within the course and scope of her employment at the time of
her accident. Under Westfield, she is not covered by the
UM/UIM provision in Wausau’s business automobile liability
policy regardless of whether Scott-Pontzer applies to public
school districts.
B. Education Liability Policy
In his cross-appeal, Henry challenges the district court’s
decision granting summary judgment in favor of Wausau with
respect to his claims under the education liability policy. He
argues that the policy is subject to the provisions in O.R.C.
§ 3937.18(A), which provides that no automobile liability or
motor vehicle liability policy of insurance shall be delivered
or issued for delivery unless both uninsured and underinsured
motorist coverages are offered to persons insured under the
policy for loss due to bodily injury or death suffered by such
insureds. Therefore, under the statute, an insurer must offer
UM/UIM coverage whenever an automobile liability or motor
vehicle liability policy is offered. If UM/UIM coverage is not
offered, then it becomes part of the policy by operation of
law. See Davidson v. Motorists Mut. Ins. Co., 744 N.E.2d
713, 715 (Ohio 2001). The parties do not dispute that the
education liability policy does not contain UM/UIM coverage
and that such coverage was not offered. The relevant
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Nos. 01-4105/4223
1The parties dispute whether or not the amended version of O.R.C.
§ 3937.18 , effective September 3, 1997, is applicable. We need not reach
this issue, however, because we find that under either version of the
statute, the education liability policy contains only incidental autom obile
coverage which is insufficient to require Wausau to offer UM/UIM
coverage.
question thus becomes whether the policy at issue is an
automobile liability or motor vehicle liability policy.1
The education liability policy at issue provides the
following automobile liability exclusion and exceptions to the
exclusion:
This insurance does not apply:
2. To any liability arising from the ownership,
operation, maintenance or use of any owned or non-
owned “automobile,” watercraft or aircraft. Operation of
an “automobile” shall be considered to include
(1) “loading or unloading,” (2) the operation of any
“automobile” in Driver’s Education classes,
(3) “occupying” any “automobile,” (4) the training or
supervision of drivers and their aides and (5) the
activities of drivers or their aides in supervising people
“occupying” any vehicle, and (6) [t]he training or
supervision of employees who are “loading and
unloading” an “automobile.” This exclusion shall not
apply to:
a. On premises activities which are necessary or
incidental to an “automobile” vocational technical class
forming a regular part of the school’s instructional
program.
b. On premises or between premises use of golf carts
or tractors.

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***
e. On premises activities involving the use of
stationary “automobile” or aircraft in a training or
instructional program.
f. Items 2.(4), (5) and (6) above, if excluded under the
“named insured’s” automobile or fleet liability policy.
Henry asserts that this policy provision is sufficient to provide
motor vehicle liability coverage, pursuant to Selander v. Erie
Ins. Group, 709 N.E.2d 1161 (Ohio 1999), thereby entitling
him to UM/UIM coverage under the policy.
In Selander, the insured was covered by a general business
liability policy that generally excluded coverage for liability
arising out of the use of motor vehicles, but provided limited
coverage for claims arising out of the use of hired or “non-
owned automobiles” used in the insured’s business. Id. at
1162. There was no dispute that automobile liability existed
in certain circumstances. Id. at 1163. The Selander court
determined that “where motor vehicle coverage is provided,
even in limited form, uninsured/underinsured coverage must
be provided.” Id.
The Ohio Supreme Court clarified its Selander decision in
Davidson. According to the Davidson court:
In Selander, we were construing a general business
liability policy that expressly provided insurance against
liability arising out of the use of automobiles that were
used and operated on public roads. Since there was
express automobile liability coverage arising out of the
use of these automobiles, we reasoned that UM/UIM
coverage was required. That holding comports with the
requirement under R.C. 3937.18 that UM/UIM coverage
must be offered where the policy is an automobile or
motor vehicle liability policy. In contrast, the policy at
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Business Ins. Co.
Nos. 01-4105/4223
issue in this case is a homeowner’s policy that does not
include coverage for liability arising out of the use of
motor vehicles generally. Instead, the homeowner’s
policy provides incidental coverage to a narrow class of
motorized vehicles that are not subject to motor vehicle
registration and are designed for off-road use or are used
around the insured’s property.
These distinctions are significant. Clearly, the policy
in Selander was deemed an automobile or motor vehicle
policy precisely because there was express liability
coverage arising from the use of the automobiles.
744 N.E.2d at 717. The Davidson court distinguished
Selander primarily on the basis that the vehicles at issue in
Davidson were “neither subject to motor vehicle registration
nor designed to be used on a public highway.” Id.
Several Ohio courts have addressed the issue of whether an
education liability policy is an automobile policy subject to
§ 3937.18. Where an education liability policy contains a
motor vehicle exclusion, Ohio courts have held that the cases
are analogous to Davidson and have concluded that § 3937.18
is not applicable. See Attenson v. Nationwide Mut. Ins. Co.,
No. 00 M 00850 (Geauga Cty. Ohio Apr. 5, 2002) (holding
that education liability policies do not qualify as automobile
liability policies); Hummel v. Hamilton, No. CV00-01-0170
(Butler Cty. Ohio Feb. 19, 2002) (applying Davidson in
finding that UM/UIM coverage is not imputed by operation
of law to an education liability policy containing motor
vehicle exclusion with an exception for on premises or
between premises use of golf carts and tractors); Bartlett v.
Nationwide Mut. Ins. Co., No. 2000-CV-338, at 2-3
(Ashtabula Cty. Ohio Oct. 29, 2001) (applying Davidson and
concluding that plaintiffs were not entitled to UM/UIM
coverage under the education liability policy when the policy
contained a motor vehicle exclusion). But see Zirger v.
Ferkel, 2002 WL 1300769, at *8 (Ohio App. Ct. June 6,
2002) (holding that the education liability policy at issue was

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an automobile liability policy under § 3937.18(L)(2), which
covers umbrella policies, where the policy provided direct
coverage for liability arising out of various driver’s education
activities if the commercial auto policy excludes coverage for
that liability).
The Ohio Supreme Court has also declined to extend
Selander with regard to homeowner’s insurance policies
containing residence-employee exceptions. In Hillyer v. State
Farm Fire and Casualty Co., 780 N.E.2d 262 (Ohio 2002),
the Ohio Supreme Court held that a “residence-employee
clause” in a homeowner’s insurance policy does not convert
the policy into an automobile policy that requires insurers to
offer UM/UIM coverage. The Hillyer court noted that the
homeowner’s policies at issue expressly insure against
property damage to the personal property owned by the
insured and, under certain circumstances, against personal
liability for bodily injury or property damages, but the
policies expressly exclude automobile coverage. Id. at 265-
66. The exclusions, however, do not apply to residence-
employees injured in the scope of their employment. Id. at
266. The insureds argued that, as in Selander, the policies
should be considered automobile policies because they could
cover injuries to a residence-employee suffered while driving
an automobile. Id. The court rejected that argument and
extended the reasoning in Davidson to the policies at issue.
Id. at 267. The court noted that the motor vehicle coverage in
the policies is incidental because coverage of the motor
vehicles was “remote from and insignificant to the type of
overall coverage the policy provided.” Id. See also
Zabukovec v. GRE Ins. Group, 2002 WL 1964777 (Ohio Ct.
App. Aug. 23, 2002) (finding that a policy that excluded
automobile liability coverage generally, but provided
coverage for use of motor vehicle by a residence employee
was not an automobile liability policy and, thus, not subject
to O.R.C. § 3937.18); Davis v. Shelby Ins. Co., No. 78610
(Ohio Ct. App. June 14, 2001) (holding that a “resident
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Business Ins. Co.
Nos. 01-4105/4223
employee exception” does not convert a homeowner’s policy
into an automobile policy).
The education liability policy in question expressly insures
against liability for damages resulting from claims made
against the school district. The policy, however, expressly
excludes claims relating to motor vehicles. The policy makes
very limited exceptions to the motor vehicle exclusion for “on
premises” use of certain vehicles including golf carts, tractors,
and vehicles used in vocational technical classes. An
exception is also made for training and supervision activities
relating to drivers and driver’s aides and for employees who
are “loading and unloading” an “automobile.” In Davidson,
the Ohio Supreme Court recognized the need to give effect to
the intent of the parties when determining whether a policy is
a motor vehicle policy. 744 N.E.2d at 718. According to
Davidson, “[c]ommon sense alone dictates that neither the
insurer or the insured bargained for or contemplated that
homeowner’s insurance would cover personal injuries arising
out of an automobile accident that occurred on a highway
away from the insured’s premises.” Id. at 719 (quoting
Cincinnati Indemn. Co. v. Martin, 710 N.E.2d 677, 680 (Ohio
1999)). Here, the coverage involving motor vehicles, or of
activities relating to motor vehicles, is remote from and
insignificant to the type of overall coverage provided by the
policy. “The mere fact that a policy provides coverage for
[some] motorized vehicles does not convert the policy into a
motor vehicle liability policy.” Id. at 718. Accordingly, we
find that the education liability policy at issue is not an
automobile liability policy for the purpose of O.R.C.
§ 3937.18.
IV.
For the foregoing reasons, we affirm the district court’s
decision granting summary judgment in favor of Wausau
under the education liability policy. We reverse the district
court’s decision granting summary judgment in favor of

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Business Ins. Co.
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Henry under the business automobile liability policy, and we
remand the case with instructions to grant summary judgment
in favor of Wausau on that issue.

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