An Ohio appellate court reversed an award of summary judgment favoring an insurer after finding an ambiguity in the policy at issue. The case is Westfall v. Estate of Dlesk, 46 N.E.3d 124 (Ohio Ct. App. 2015).
Donald Dlesk was killed in a single-auto accident after his vehicle went off the road and struck a tree. The law enforcement officers who responded to the accident called on Russell Westfall and his company, Westfall Towing (collectively, Westfall), to remove Dlesk's van from the scene. At the time of the accident, Dlesk had coverage under an auto policy issued by Ohio Mutual Insurance Group.
Westfall later sought reimbursement for the costs of towing and storing the vehicle from Dlesk's estate. The towing company argued it was entitled to payment based on the coverage provided by Dlesk's auto policy and because state law required insurers to cover towing and storage costs as expenses that "arise out of the ordinary use of a motor vehicle." The estate and Ohio Mutual (collectively, Ohio Mutual) argued the opposite: No such coverage requirement existed in the Ohio statutes, and Dlesk had not actually purchased collision coverage. The trial court ruled in favor of the insurer and estate after finding Dlesk had neither purchased nor paid premium for collision coverage, and his policy provided only comprehensive coverage. Westfall appealed.
The court examined the Declarations page in Dlesk's policy. It listed "PHYSICAL DAMAGE COMPREHENSIVE" and "PHYSICAL DAMAGE COLLISION" as two of the 12 types of coverage provided. The auto symbol for "a specifically described auto" was found next to physical damage coverage for both collision and comprehensive. However, the list of coverages provided was immediately preceded by the statement that coverage only applied to "those coverages where a charge is shown in the premium column below." (emphasis original). The section describing the premiums paid under the policy included a deductible and premium for physical damage comprehensive coverage, but did not provide a deductible or a premium for physical damage collision coverage.
Ohio Mutual argued the lack of a premium and deductible for collision coverage meant the policy did not provide collision coverage to Dlesk. The judges, on the other hand, said the policy was ambiguous. Though collision coverage was included on the list of coverages provided and had the symbol for "a specifically described auto" next to it, no premium or deductible was listed for collision coverage on the list of premiums and deductibles in the Declarations.
In looking at the case the court saw that both sides had a valid point. Ohio Mutual argued collision coverage did not apply since no premium was listed, while Westfall claimed the coverage was listed on the declarations and was therefore available.
Given this apparent ambiguity, the court adhered to one of the basic principles of insurance law: an ambiguous policy must be interpreted against the insurer because the insurer wrote the policy. Therefore, the court found that Dlesk's policy included collision coverage. Westfall argued it was entitled to payment for towing and storing Dlesk's vehicle because Westfall's services had been necessitated by Dlesk's collision with a tree. The court agreed, pointing to the policy language of the collision coverage, which stated Ohio Mutual would cover damages resulting from the covered auto's collision with another object or if the vehicle flipped over.
The trial court's grant of summary judgment to Ohio Mutual was reversed, and the appellate court entered judgment in favor of Westfall.
Editor's Note: Insurance policies are contracts of adhesion. Since the insurers draft the policies, when language in those policies is ambiguous, any ambiguity is found in favor of the insured. In this case, the symbol for a vehicle specifically described was shown next to both comprehensive and collision coverage. While there was no premium or deductible showing for the collision coverage, the display of the symbol made it confusing, and therefore ambiguous. The policy could reasonably be interpreted two ways by the insured's estate and an organization such as Westfall. Because of this ambiguity, the judges correctly found in favor of the insured and the claimant.
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