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Collins v. Grange Mut. Cas. Co.12/29/1997
WILLIAM W. YOUNG, Presiding Judge.
Appellant, Grange Mutual Casualty Co., appeals a declaratory judgment in favor of Appellee, Bush Auto Place, Inc. The trial court found that Grange waived its right to assert policy exceptions under its insurance contract with Bush Auto Place, and was estopped from denying coverage for the settlement of a personal injury complaint against Bush Auto.
On May 24, 1990, Angelo Collins was seriously injured while operating a hydraulic lift as an employee at Bush Auto. At the time, Bush Auto had two commercial liability policies with Grange, a "primary" policy and an "umbrella" policy. Both policies contained exclusion clauses denying coverage for an employee's personal or bodily injury "arising out of and in the course of his employment."
On May 24, 1991, Collins filed an action for damages against Bush Auto in the Clinton County Court of Common Pleas. The president of Bush Auto, George Bush, notified Grange of the lawsuit. Bush also brought the complaint to attorney James Miller. Miller had represented both Bush and Grange in the past. On June 21, 1991, Grange retained Miller to defend Bush Auto against Collins's complaint. A Grange regional claims supervisor initially assigned a $10,000 reserve to Collins's complaint. One of Collins's claims asserted an intentional tort, and Miller recommended retention of a specialist, attorney Dan Buckley, a partner with Vorys, Sater, Seymour & Pease ("Vorys"). Bush agreed to Buckley's representation, and Buckley began working on the case in July 1991. Charles Eugene West, Grange's Claims/Legal Administrator, subsequently approved Buckley's retention.
At some point, West took over direct supervision of Bush Auto's claim file. In his position with Grange, West had authority to determine the existence of coverage and to authorize settlement in any given case up to policy limits. OsNovember 15, 1991, West sent Miller a letter expressing doubt about Grange's coverage liability, but West also wrote that "any opinion that there is no liability coverage or duty to defend Claims I and Claims II may be subject to attack" in light of Physicians Ins. Co. of Ohio v. Swanson (1991), 58 Ohio St.3d 189, 569 N.E.2d 906. To avoid the coverage issue, West suggested that Bush sign a "non-waiver agreement" stipulating that Grange had not waived its light to deny coverage by proceeding with a defense. Bush, however, did not learn of the proposed non-waiver agreement until sometime in 1993, and never signed the document.
On June 22, 1992, Bush, Buckley, Miller, and West met at Grange's headquarters to discuss defense strategy and the possibility of settlement. Bush later recalled West saying something to the effect that there was up to $1,000,000 in coverage available under Bush Auto's insurance policies with Grange. West did not recall making that statement, although he did recall telling Bush that Grange wanted to aggressively pursue Bush Auto's defense. Buckley, however, corroborated Bush's recollection that West suggested that there was coverage. Buckley specifically recalled that West explained that there might be coverage based on the Physicians Ins. case.
After the June 22 meeting, both Bush and Buckley believed Bush Auto had up to $1,000,000 in coverage from Grange. Thereafter, Bush did not actively participate in the litigation, or offer the attorneys any guidance or suggestions on how to settle Collins's claims. West, however, supervised all aspects of the litigation. He requested and received frequent and detailed reports on discovery. He was also responsible for approving major activity in the case, including discovery depositions and independent medic
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