[Cite as Gilkey v. Grange Mut. Cas. Co., 2016-Ohio-7676.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
ATHENS COUNTY
MALISSA GILKEY, INDIVIDUALLY, : Case No. 16CA12
PERSONAL REPRESENTATIVE,
AND ADMINISTRATOR OF THE :
ESTATE OF SHANE GILKEY,
Plaintiff-Appellant, :
v. : DECISION AND
JUDGMENT ENTRY
GRANGE MUTUAL CASUALTY :
COMPANY, RELEASED: 11/01/16
Defendant-Appellee. :
APPEARANCES:
Andrew J. Mollica, Mollica, Gall, Sloan & Sillery Co., L.P.A., Athens, Ohio, for appellant.
James R. Gallagher, Gallagher, Gams, Pryor, Tallan & Littrell, L.L.P., Columbus, Ohio,
for appellee.
Harsha, J.
{¶1} Malissa Gilkey, individually and in her representative capacity for her
deceased husband, Shane Gilkey, filed an action for breach of contract against Grange
Mutual Casualty Company (“Grange Mutual”). Gilkey claimed that Grange Mutual
refused to pay for her underinsured motorist (“UIM”) claim under a farm umbrella policy
Grange Mutual issued to the Gilkeys.The Athens County Court of Common Pleas
granted summary judgment in favor of Grange Mutual finding the farm umbrella policy
did not provide UIM coverage to the Gilkeys.
{¶2} Gilkey asserts that the trial court erred because the declarations part of
the policy established that the farm umbrella policy incorporated the coverage of several
underlying insurance policies, including an automobile policy that contained UIM
Athens App. No. 16CA12 2
coverage. Gilkey misconstrues the nature of the umbrella policy, which provides a form
of excess coverage beyond an insured’s primary policies. Here the declarations page
does not incorporate the coverages of the underlying insurance policies into the
umbrella policy; it merely sets forth the underlying policies as a condition for issuing the
umbrella and as a underlying baseline reference to describe that coverage. The farm
umbrella policy’s terms specify that it does not cover bodily injury to any insured, (the
Gilkeys), so it unambiguously precluded additional UIM beyond that provided by their
automobile insurance policy. Moreover, the uncontroverted summary-judgment
evidence established that the Gilkeys’ application for the farm umbrella policy did not
request UIM coverage and none was provided. Finally, a 2001 amendment to R.C.
3937.18 eliminated the requirement that insurers offer UIM coverage, as well as the
possibility that this coverage could arise by operation of law.
{¶3} We reject Gilkey’s assignment of error and affirm the summary judgment
entered in favor of Grange Mutual.
I. FACTS
{¶4} Cynthia Wasson negligently operated a motor vehicle on State Route 681
in Athens County, Ohio, striking and killing pedestrian Shane Gilkey. Malissa Gilkey,
the surviving spouse, personal representative, and administrator of Shane Gilkey’s
estate, asserted a claim against Wasson for the bodily injury to and the wrongful death
of her husband. Wasson’s liability insurance policy had an “each person” limit of
$25,000. Gilkey settled her claims against Wasson for her liability insurance policy
limits.
Athens App. No. 16CA12 3
{¶5} At the time of the accident Shane Gilkey was an insured under a Grange
Mutual personal automobile insurance policy, which included uninsured/underinsured
(“UM/UIM”) motorist coverage with an “each person” limit of $500,000. After settling her
claims against Wasson, Gilkey asserted a claim for UIM coverage under her husband’s
Grange Mutual automobile insurance policy. The parties settled Gilkey’s claims under
this policy for $475,000 (the $500,000 limit of UIM coverage less the $25,000 already
recovered from Wasson’s insurance policy.
{¶6} At the time of the accident the Gilkeys were also insured by Grange
Mutual under a farm umbrella policy. Gilkey asserted a UIM claim under this policy, but
Grange Mutual rejected this claim. Gilkey filed a complaint in the common pleas court
alleging that Grange Mutual had breached its contract by rejecting her claim for UIM
coverage under the farm umbrella policy. In its pleadings Grange Mutual requested a
judgment declaring that the farm umbrella policy did not include any UM/UIM coverage.
{¶7} Both parties filed motions for summary judgment. The summary-judgment
evidence established the following additional relevant facts. In November 2013, Shane
Gilkey applied for a farm umbrella insurance policy, which Grange Mutual issued to the
Gilkeys as Farm Umbrella Policy No. FUP2058266-00. The Gilkeys did not request
UM/UIM coverage in the application, Grange Mutual did not issue an endorsement to
add UM/UIM coverage, and Grange Mutual did not charge the Gilkeys a premium for
UM/UIM coverage for the farm umbrella policy. When Shane Gilkey applied for the farm
umbrella policy, Grange Mutual did not have a duty to offer UM/UIM coverage or to
obtain a rejection of this coverage when issuing such a policy.
Athens App. No. 16CA12 4
{¶8} The declarations section of the farm umbrella policy stated an “each
occurrence” limit of $1,000,000, as well as an agreement to “provide the insurance
stated in this policy.” As the underwriting manager in Grange Mutual’s commercial
specialty lines department stated in her affidavit, the declarations section for the farm
umbrella policy did not list any UM/UIM coverage in the farm umbrella policy issued to
the Gilkeys.
{¶9} The second page of the declarations section specified that the Gilkeys
were required as a condition of the farm umbrella policy to “keep the underlying
insurance coverages and limits of insurance shown in this schedule in full effect
throughout the policy period,” and listed the underlying insurance policies, including the
automobile insurance policy issued by Grange Mutual. The declarations did not state
that the coverages of the underlying policies were incorporated into the new umbrella
policy and did not include any statement that the policy included UM/UIM coverage.
{¶10} Moreover, the farm umbrella policy stated in its exclusions that “[t]his
insurance does not apply to: * * * ‘Bodily injury’ to you or to any ‘insured’ * * *.” The
Gilkeys were insured persons under the policy.
{¶11} The trial court entered summary judgment in favor of Grange Mutual and
against Gilkey. The court determined that the farm umbrella policy “cannot reasonably
be interpreted to provide UM/UIM coverage,” declared that the policy did not provide
that coverage, and dismissed Gilkey’s breach-of-contract complaint.
II. ASSIGNMENT OF ERROR
{¶12} Gilkey assigns the following error for our review:
Athens App. No. 16CA12 5
THE TRIAL COURT ERRED IN DENYING SUMMARY JUDGMENT TO
APPELLANT MALISSA GILKEY AND GRANTING IT TO APPELLEE
GRANGE MUTUAL CASUALTY COMPANY.
III. STANDARD OF REVIEW
{¶13} Gilkey asserts that the trial court erred in granting summary judgment in
favor of Grange Mutual and in denying summary judgment for her.
{¶14} Generally, appellate courts apply a de novo standard of review to an
appeal from a summary judgment based on an insurance contract. Westfield Ins. Co. v.
Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931, ¶ 12; see also Willis v.
Gall, 2015-Ohio-1696, 31 N.E.3d 678, ¶ 10 (4th Dist.) (“[t]he interpretation of a written
contract, such as an insurance policy, is a matter of law that we review de novo”);
Hickory Grove 339, L.L.C. v. Cincinnati Ins. Co., 4th Dist. Washington No. 15CA38,
2016-Ohio-3408, ¶ 13.
{¶15} Summary judgment is appropriate if the party moving for summary
judgment establishes that (1) there is no genuine issue of material fact; (2) the moving
party is entitled to judgment as a matter of law; and (3) reasonable minds can come to
but one conclusion, which is adverse to the party against whom the motion is made.
Civ.R. 56(C); New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-
Ohio-2266, 950 N.E.2d 157, ¶ 24; Martin v. Jones, 2015-Ohio-3168, 41 N.E.3d 123, ¶
29 (4th Dist.). The moving party has the initial burden to inform the trial court of the
basis for the motion and to identify the parts of the record that demonstrate the absence
of a genuine issue of material fact on the pertinent claims. Dresher v. Burt, 75 Ohio
St.3d 280, 293, 662 N.E.2d 264 (1996). Once the moving party satisfies this initial
burden, the non-moving party has the reciprocal burden under Civ.R. 56(E) to set forth
Athens App. No. 16CA12 6
specific facts to show that genuine issues exist for trial. Id.; Schultheiss v. Heinrich
Ents., Inc., 2016-Ohio-121, ___ N.E.3d ___, ¶ 15 (4th Dist.).
IV. LAW AND ANALYSIS
{¶16} In order to address Gilkey’s assignment of error we must interpret the
contract that she claims provides coverage. “The fundamental goal when interpreting an
insurance policy is to ascertain the intent of the parties from a reading of the policy in its
entirety and to settle upon a reasonable interpretation of any disputed terms in a
manner designed to give the contract its intended effect.” Laboy v. Grange Indemn. Ins.
Co., 144 Ohio St.3d 234, 41 N.E.3d 1224, 2015-Ohio-3308, 41 N.E.3d 1224, ¶ 8. In the
absence of an express contractual definition or resultant manifest absurdity, we will
construe words and phrases contained in an insurance policy in accordance with their
plain and ordinary meaning. Id., citing Alexander v. Buckeye Pipe Line Co.,53 Ohio
St.2d 241, 374 N.E.2d 146 (1978), paragraph two of the syllabus; see also Wayne Mut.
Ins. Co. v. McNabb, 2016–Ohio–153, ___ N.E.3d ___, ¶ 20 (4th Dist.).
{¶17} If an insurance contract is plain and unambiguous, the court does not go
beyond the plain language of the policy to determine the parties' rights and obligations;
instead, it gives effect to these plain and unambiguous terms. See Wayne Mut. Ins. Co.
v. McNabb, 2016-Ohio-153, 45 N.E.3d 1081, ¶ 21 (4th Dist.); see also Scarberry v. W.
Res. Group, 4th Dist. Highland No. 14CA6, 2015-Ohio-240, ¶ 11, and cases cited
therein.
{¶18} Conversely, if provisions in an insurance contract are ambiguous, i.e.,
reasonably susceptible of more than one interpretation, they will be construed liberally
Athens App. No. 16CA12 7
in favor of the insured. Laboy at ¶ 9; Wayne Mut. Ins. Co., at ¶ 22. This rule, however,
will not be applied to create an unreasonable interpretation of the policy provisions. Id.
{¶19} In her sole assignment of error Gilkey contests the trial court’s entry of
summary judgment in favor of Grange Mutual and its denial of her motion for summary
judgment. She asserts that the Grange Mutual farm umbrella policy included UM/UIM
coverage in the amount of $1,000,000 per occurrence because the declarations section
of the policy incorporated the coverage for several underlying insurance policies,
including the automobile insurance policy containing UM/UIM coverage issued to Shane
Gilkey.
{¶20} We reject Gilkey’s contention. At the outset, Gilkey misconstrues the
nature of the umbrella policy, which “ ‘is a policy which provides excess coverage
beyond an insured’s primary policies.’ ” Granger v. Auto-Owners Ins., 144 Ohio St.3d
57, 2015-Ohio-3279, 40 N.E.3d 1110, ¶ 23, quoting Cincinnati Ins. Co. v. CPS Holdings,
Inc., 115 Ohio St.3d 306, 2007-Ohio-4917, 875 N.E.2d 31, ¶ 5. Umbrella policies are
different from standard excess (secondary) insurance policies because they provide
both excess (“vertical”) and primary (“horizontal”) coverage, with vertical coverage
providing additional coverage above the limits of the insured’s underlying primary
insurance and horizontal coverage “dropping down” to provide primary coverage for
cases where the underlying insurance provides no coverage at all, e.g. for losses not
typically covered by liability insurance. Id. In essence, umbrella liability coverage
“drops down” to cover an uninsured’s liability; it does not drop down to “cover”
underinsured motorist liability. Moreover, an umbrella policy need not provide the same
Athens App. No. 16CA12 8
coverage as an underlying insurance policy. See, e.g., Holliman v. Allstate Ins. Co., 86
Ohio St.3d 414, 417-418, 715 N.E.2d 532 (1999).
{¶21} Like anything else in a question of contractual interpretation, we are
guided by the language of the policy. Notwithstanding Gilkey’s claim to the contrary, the
declarations do not incorporate the coverages of the underlying insurance policies; they
merely identify the underlying policies as a condition for acquiring and maintaining
umbrella coverage. Moreover, the farm umbrella policy’s own terms specifically stated
that it did not cover bodily injury to any insured, i.e., the Gilkeys, so it unambiguously
precluded UM/UIM coverage. The uncontroverted summary-judgment evidence in
Grange Mutual’s underwriting manager’s affidavit established that Shane Gilkey did not
request UM/UIM coverage when he applied for the umbrella, none was provided by
Grange Mutual when it issued the policy, and none was paid for by the Gilkeys in their
premium for the policy.
{¶22} Nor could the coverage arise by operation of law. A 2001 amendment to
R.C. 3937.18 “eliminated the mandatory offer requirements for UM/UIM coverage, and,
consequently, the possibility that UM/UIM coverage could arise by operation of law.”
See State Farm Mut. Auto. Ins. Co. v. Grace, 123 Ohio St.3d 471, 2009-Ohio-5934, 918
N.E.2d 135, ¶ 23, citing the amended version of R.C. 3937.18(A) (the insurer “may, but
is not required to,” include UM/UIM coverage); S.B. 97, Sections 3(B)(1), (2), and (4),
149 Ohio Laws, Part I, 779, 788. Therefore, as Gilkey concedes, the trial court could
not hold that UM/UIM coverage arose by operation of law in the absence of a specific
provision for it in the farm umbrella policy.
Athens App. No. 16CA12 9
{¶23} Consequently, nothing in the plain language of the parties’ farm umbrella
insurance policy included UM/UIM coverage that would be in addition to the coverage
they sought and were granted by Grange Mutual in Shane Gilkey’s automobile
insurance policy. The trial court correctly declared that the farm umbrella policy did not
provide UM/UIM coverage and dismissed Gilkey’s complaint for breach of contract. We
overrule Gilkey’s assignment of error.
V. CONCLUSION
{¶24} After applying our de novo review of the summary-judgment evidence, we
agree with the trial court’s conclusion that there is no genuine issue of material fact,
reasonable minds can come to but one conclusion, which is adverse to Gilkey, and
Grange Mutual is entitled to judgment as a matter of law. Grange Mutual’s farm
umbrella policy did not provide UM/UIM coverage to the Gilkeys. Therefore, the trial
court properly entered summary judgment in favor of Grange Mutual and denied
Gilkey’s motion for summary judgment. We affirm the judgment of the trial court.
JUDGMENT AFFIRMED.
Athens App. No. 16CA12 10
JUDGMENT ENTRY
It is ordered that the JUDGMENT IS AFFIRMED and that Appellant shall pay the
costs.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Athens
County Court of Common Pleas to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of
this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
Abele, J. & Hoover, J.: Concur in Judgment and Opinion.
For the Court
BY: ________________________________
William H. Harsha, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing
with the clerk.