Ohio Supreme Court Ruling Favors Bus Wreck Survivors

January 10, 2011

The Ohio Supreme Court said a university’s insurance coverage extended to a charter bus that crashed, killing five student baseball players and two others in 2007.

The 5-2 ruling issued Dec. 28, 2010, is a victory for families and crash survivors that have tried to bring claims against Bluffton University’s insurance policies. The Associated Press reported the ruling provides up to $16 million more in insurance money to pay claims.

At the time of the crash, the university was covered by a primary auto insurance policy issued by the Hartford Insurance Co., an “umbrella” policy issued by American Alternative Insurance Co. and an additional excess liability policy issued by the Federal Insurance Co., according to the Ohio Supreme Court.

The Hartford policy included in its definition of an insured person, anyone “while using with (the university’s) permission” a covered vehicle that the university “owned, hired or borrowed.” The terms and conditions of coverage under the umbrella and excess liability policies were the same terms and conditions of Bluffton’s primary auto insurance policy with Hartford.

American Alternative and Federal Insurance, however, sought declaratory judgments that their policies did not provide coverage for the injuries suffered by the accident victims. The insurers had argued they could not be liable because the university in northwest Ohio did not own the bus. They claimed the bus company was responsible for the driver.

In March 2007, five baseball players from Bluffton University, the bus driver and the bus driver’s wife were killed and others were injured when a chartered bus in which they were traveling to a Florida tournament crashed in Atlanta, the court explained. The university’s baseball coach had made arrangements to charter the bus from Executive Coach Luxury Travel Inc. and had agreed to Executive Coach’s suggestion that one of its drivers known to the coach, Jerome Niemeyer, be assigned as the driver for the Florida trip.

The Allen County Court of Common Pleas had granted summary judgment in favor of the insurers, holding that neither Niemeyer nor Executive Coach qualified as “insureds” under the university’s insurance policies because the university did not own and had not “hired” or “borrowed” the bus, but rather had contracted with Executive Coach to provide transportation services in a vehicle owned by Executive Coach and driven by one of its employees.

The appellate court agreed.

However, the state Supreme Court found the driver was covered under the school’s insurance because the university in northwest Ohio hired the bus and had granted permission to the driver.

“Based on the facts of this case,” Justice Pfeifer wrote, “we conclude that Bluffton hired the bus when (baseball coach James) Grandey procured the use of the bus in exchange for payment to Executive. We also conclude that Niemeyer was driving the bus hired by Bluffton with Bluffton’s permission because Executive had sought and Grandey had granted a request to allow Niemeyer to drive the bus. Accordingly, we conclude that Niemeyer is an Ă”insured’ pursuant to the omnibus clause.”

The court’s decision was authored by Justice Paul E. Pfeifer.

Justice Evelyn Lundberg Stratton wrote the dissenting opinion, joined by Justice Terrence O’Donnell. Stratton agreed with the lower courts that found Bluffton did not “hire” the Executive Coach bus because Executive selected the bus and hired the driver.

“The majority’s narrow interpretation expands the scope of coverage beyond what the parties to the insurance policy intended,” Justice Stratton wrote. “Today’s opinion unreasonably extends coverage to a third party and effectively opens the door for similar claims under other scenarios because the omnibus clause is standard in many insurance policies.”

The Associated Press reports contributed to this story.

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